SINGAPORE - To build IT solutions from scratch is often a time consuming and costly affair. Particularly for startups who are often short on both manpower and cash.
An alternative would be to rely on building blocks provided by software vendors. By writing applications on top of those building blocks, a startup saves time and money from making those developments themselves.
ILOG is a European software company that has been in the business of delivering software components since 1987.
Its engines have been used by SAP, Oracle, Siebel, and in process optimization and automation of manufacturers such as Daimler-Chrysler, Posco Steel and the Port of Singapore Authority.
Smart software adds the 'e' to business
Transforming a business into an e-business, places extraordinary demands on the software to be dramatically smarter.
In e-business, customers and prospective customers often "self-service", interacting directly with a company's web site software.
No longer is there a salesperson or customer service representative answering questions, understanding a customer's requirements and helping the customer select the best product or service offering to meet their needs. In this context, software must be much smarter.
Software building blocks significantly shorten development time allowing developers to keep pace with rapidly changing requirements in e-business.
Working the program
The company will now offer its software components at a discounted rate to startups. The plan is to earn the revenue back later on, when the engines are deployed with the startup's solutions.
With software building blocks, like what ILOG is offering, revenues can be generated either at the developmental phase - when the product is sold to a developer who will develop solutions based on the engines; or at the deployment phase-when the developer deploys the solutions for businesses.
"The idea is to forego some of the development revenue stream and get it back in the deployment stream," said Albert Antoine, ILOG's director of partner marketing.
A Worldwide Startup Program launched by ILOG in Singapore this week plans to deliver those building blocks to startups at a discounted price.
All of ILOG's products will be offered under the program, including components that enable process automation and optimization, business rule authoring and system management visualization.
The program, however, is not offered to everyone. The qualification for this Worldwide Start-up Program is based on:
· The age of the start-up
· The financial background and funding situation
· A good business plan
Only startups that have three or less years of history, funding of less than US$1.5 million and a sound business plan will be included in the program.
The plan is to target small startups who may be successful in the future but lacks the cash right now to employ ILOG's solutions.
"We have worked with a lot of young companies before," said William Scull, company Vice President of worldwide marketing, "but we feel that companies that have less than a million and a half in funding probably wouldn't be able to afford our products. That's really the segment that we are targeting at."
Pricing for success
Right now, the going rate of ILOG's individual components ranges from US$2500 to US$50000.
ILOG estimates there to be about 2000 startups in Singapore alone. The company plans to sign up about 20% of the 2000 in the first year.
"If out of these, only 50 are successful startups," noted Antoine, "our revenue stream (from this program) will be very significant."