News and Events
ServiceSource European Executive Summit Addresses Emerging Trends in Growing and Valuing Maintenance and Services Revenue
21 October 2009, (DUBLIN, Ireland) - ServiceSource, a global leader in Service Performance Management for the high-tech and healthcare industries, recently concluded its 3rd Annual European Executive Summit outside of London, England. The only event of its kind, the Summit brought together more than 30 senior services executives representing over $20 billion in maintenance revenue from leading public and private technology-based hardware, software, and healthcare companies.
"A critical learning from the Summit was that both technology companies and financial analysts are placing services and maintenance revenue in the spotlight more than ever before. The investment community understands the importance of maintenance revenue, and valuations are now directly impacted by the services annuity stream," said Mike Smerklo, CEO and Chairman of ServiceSource. "This year's Summit was especially valuable as global services leaders shared best practices and discussed strategies to maximize their services revenue stream in what is still expected to be a challenging economic environment heading into 2010."
"We were honored to be recognized as a 10-year ServiceSource client at this year's European Executive Summit. As a long-standing client, we see the Summit as a truly unique forum which brings leading service revenue executives together with 3rd party analysts and consultants. Because of its unique position in the marketplace, ServiceSource has the ability to bring insights to this event based on its perspective of driving service sales and renewals with 50 technology-related clients." said Stuart Cooper, Executive Vice President Enterprise Global Services, Alcatel-Lucent.
The Summit addressed the evolving forces, emerging trends and strategic importance of developing and growing world class services businesses. Key industry insights were shared by prominent speakers including Nathan Marston, Partner and Principal of European Technology Practice for McKinsey and the Executive Director and Head of European Software and Services from a leading financial services firm.
Key findings and observations shared by the speakers during the event include:
- IT spend reduction is 4-7 times greater than GDP decline - but the return could be similarly fast. (Source: Nathan Marston, McKinsey & Company)
- Investors and the strategic markets value maintenance revenue as a source of predictable, recurring revenue and profits as well as an indicator of customer satisfaction (Source: "Services Revenue Streams: The Financial View" session)
- Preserving maintenance revenue may be increasingly challenging, but these streams have been key to obtaining premium valuations and minimizing volatility (Source: "Services Revenue Streams: The Financial View" session)
- Bookings and revenue from maintenance & support renewals have been under pressure since Q3 2008. (Source: Eric Hall, ServiceSource Benchmarking Database)
- These are due a multitude of factors including aggressive customer negotiations and techniques, a competitive channel environment, and the emergence of 3rd party support providers.
- However, the environment is yielding winners and losers. Those companies who have taken advantage of the difficult economic climate to emphasize the value of their services are seeing their businesses grow despite the pressure. Others have simply chosen to cannibalize the services revenue stream in favor of selling new product at steep discounts. (Source: Service Performance Management Industry Report: Service Share Index, Q2 2009)
- Selling the value of maintenance has never been more critical, but this starts with having a strong data set for understanding your contracts and customers that you need to renew and a strong channel program that enables partners with the right resources, training, tools and incentives to drive renewals in region. (Source: Managing a World Class Services Business client panelists)
For further information:
Kim Hughes, The Blueshirt Group Tel: +415-516-6187
Email: kim@blueshirtgroup.com
About ServiceSource
ServiceSource is the service revenue performance company. We partner with technology, healthcare, and life sciences companies to maximize maintenance, support, and subscription revenue while optimizing customer loyalty. We increase contract renewal rates for clients on average by 10–25 percentage points — and in some cases by up to 40 points. These dramatic results are achieved via a purpose-built service revenue solution, including a suite of cloud applications and managed services built on a proprietary technology platform, which combines the industry's most robust data management engine and a unique service revenue master, leveraging our deep knowledgebase of benchmarks and best practices. Our solution delivers proven results through a 100% pay-for-performance business model that enables a success–driven, shared–risk partnership. Headquartered in San Francisco, ServiceSource has $5 billion in service revenue under management.
For more information on ServiceSource, visit www.servicesource.com or call: 415.901.6030.