Technology Archives - Ventana Systems, Inc.

Software Licensing Policy

ventnew_admin — Sun, 15 Dec 2013 13:45:37 +0000

For a major computer company, Ventana developed a model to evaluate software licensing policies. The specific project objectives were to predict the financial results and side effects of alternative licensing policies, provide policy insights, optimize strategies, quantify risk and identify the best ways to reduce it. Through the use of policy simulation, Ventana discovered a fatal weakness in the policy proposed by management. The analysis showed that the proposed policy would cut down on the illegal copies of software at customer sites (a policy goal), but it also create deleterious side effects and logistics problems.

At the time, most software vendors considered variations on the proposed scheme. Although Ventana’s client had identified the key factors involved in changing this policy, its intuitive quantification of them was wrong. It also had badly underestimated the time required to change from one policy to another. Market testing soon confirmed Ventana’s assessment. The new policy would have greatly increased customer inconvenience. Consequently, it would have resulted in high customer dissatisfaction. So unlike other companies that introduced and then abandoned copy-protection schemes, Ventana’s client was able to avoid what everyone in the industry was later to recognize as a serious marketing mistake.

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Computer Peripherals

ventnew_admin — Sun, 15 Dec 2013 13:04:07 +0000

For a worldwide supplier of computer peripherals, Ventana predicted the effects of alternative price-package options on costs and sales. Starting with a detailed understanding of dozens of ways consumers use the products, the model was used to find the optimal product design and pricing, to meet market share and profitability targets.

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Chemical Testing

ventnew_admin — Sun, 15 Dec 2013 13:00:37 +0000

For a business unit of a large chemical company, Ventana built a model-based decision support system to help managers and scientists decide what integrated testing to perform. Testing issues were particularly important because testing represented over half of the business unit’s controllable costs. The initial Ventana decision-support system coupled business and scientific issues, and it allowed Ventana to identify several gaps in the company’s understanding of why its chemistry worked. Working with the company, Ventana developed an R&D test program to fill in some of the most important gaps. This test program produced results that allowed Ventana to create a new understanding of both product chemistry and the physics involved in its application.

With this better understanding of the basic science, Ventana designed a stochastic decision support system that permitted managers to design optimal test strategies for individual sales campaigns. The system permitted users to determine the business impact of different testing programs and to assess testing uncertainties in both graphical and rigorous statistical terms. Users could update the test evaluation as they received new data and review graphical displays that helped them understand whether test results were behaving consistently or spuriously.

The decision support system permitted the business unit to gain several new insights into traditional testing tactics and strategy. Ventana was able to show that the business unit’s recent emphasis on cost cutting in the area of sales testing was counterproductive. The company’s business situation called for more sales testing, rather than less. Ventana also showed how the business unit could decrease the cost of individual tests by 35% with almost no negative impact. Implementation of this single cost saving idea paid back the expense of the Ventana modeling in less than a year.

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