The long tail - Was: Change management systems

[John Earl <john.earl@xxxxxxxxxxxxxx>]

On Mar 9, 2010, at 6:43 AM, Paul Nelson wrote:

> Too many 30 and 40 something MBA's running around. Don't get me  
> started.



Paul,

If an MBA looks at a software company solely through the lens of a  
spreadsheet, they sometimes see a cash-cow that can be purchased for  
roughly 2x maintenance revenue.  The MBA brain may decide that the  
financially astute thing to is to dismiss 80-90% of the company  
personnel (to reduce costs), keep a few sales people (to grow the  
install base), keep a couple of harried support staff (to maintain the  
all important customer base), and hope that existing customers will  
still pay maintenance for the next 5-10 years.

If that plan works (and it often does) the MBA's can make a boat load  
of money with near zero risk.  This is sometimes referred to as "the  
long tail".  And if that software company's customers are not paying  
attention and the customer just keep paying maintenance (well, for at  
least 3 years after the acquisition), the MBA's clean up - at the  
expense of the customer.

Moral: Know who owns your software provider.  Know what their current  
and future software development plans are.  If they are not actively  
investing in the products that you purchased, you should ask yourself  
why you are investing in them.

jte