1. (C) Dr. Karl Popp 2010 1 http://www.drkarlpopp.com
Chances and risks of software
business models during mergers
and acquisitions
Dr. Karl Popp
Corporate Development
SAP AG
karl.michael.popp@sap.com
http://www.drkarlpopp.com

2. (C) Dr. Karl Popp 2010 2 http://www.drkarlpopp.com
Business Models
Typeof Goods/Servicesoffered
Financial Physical Digital
goods
Human
Creator Entrepreneur Manufacturer Inventor n/a
Distributor Financial
trader
Wholesaler,
Retailer
Intangible
s
distributor
n/a
Lessor Financial
lessor
Physical
lessor
Intangible
s
lessor
Contracto
r
Broker Financial
broker
Physical
broker
Intangibles
broker
HR broker
Based on source: Weill et al., Do Some Business Models Perform Better than Others? A Study
of the 1000 Largest US Firms, MIT Center for Coordination Science Working Paper No. 226,
2005.

3. (C) Dr. Karl Popp 2010 3 http://www.drkarlpopp.com
Specifics of the software
industry
–Software as digital good – marginal cost of
production very low
–International company structures even in
small companies
–Intellectual property is in the focus of all
companies
–Companies use similar Business Models
for intellectual property

4. (C) Dr. Karl Popp 2010 4 http://www.drkarlpopp.com
Chances and risks of software
business models
Business Model Chances Risks
Inventor Monetizing
intellectual
property
Safeguarding and
defending IP
Lessor Growing license
revenues
Revenue does not
scale
Services Growing service
revenues
Cost too high,
quality issues

5. (C) Dr. Karl Popp 2010 5 http://www.drkarlpopp.com
Management of acquisition risk
Business
Model
Risks Risk Mitigation
Inventor Safeguarding and
defending IP
IP Management
Lessor Revenue does not
scale
Early, detailed revenue
planning and revenue
commitments
Services Cost too high,
quality issues
Detailed planning and
early implementation of
scalable model for
services

6. (C) Dr. Karl Popp 2010 6 http://www.drkarlpopp.com
Background information
Business Models
in the software industry
http://www.drkarlpopp.com/BusinessModelsintheSo
ftwareindustry.html
Profit from Software
Ecosystems
ISBN-13: 978-3842300514
Business Models, partnership
models and ecosystems in the
software industry
Examples from over 50 software
companies