As a NASBA registered CPE sponsor, Tensoft is required to run polling questions during our webcasts for participants who want CPE credit. Polling questions provide great feedback that helps us ensure valuable content for the attendees. Often the polling questions are interesting and informative on their own.
One of our webcasts “Structuring Software Sales Transactions for Optimal Revenue Recognition,” resulted in over 100 attendees responding to our polling questions. (There are always a good percentage of non-responses to polling questions, since not everyone wishes to receive CPE credit.) The attendee responses to our four polling questions were interesting enough to share here.
When we asked attendees “Does your company have separate and independent revenue and billing processes?” the majority of the responses clearly fall in the “Yes” category. Based on this presentation sample – most technology companies supporting complex revenue recognition requirements have separated their revenue and billing processes to meet the separate business requirements for each process.
In response to the question “How does your company record revenue?” 45% of companies are deferring all revenue, while 33% of companies are manually reviewing each transaction as they occur. The percentage of people reviewing each transaction would indicate a high percentage of companies concerns about the sales transaction impact on revenue have large sales. In total almost 90% of companies are deferring and analyzing revenue – either through manual processes or revenue management systems.
How companies go to market – how they position the value created with the payment models from customers – varies significantly between technology companies. Software can be delivered as a service, embedded into hardware devices, and sold through traditional software plus maintenance licenses. There are also multiple indirect sales models. This webinar focused on managing how you sell to the revenue recognition process. The webinar participants indicate multiple revenue models are operational in Silicon Valley.
Finally, when we asked the attendees “What type of software licenses does your company have?” a majority of responses were “Perpetual.” Only a handful of responses were “Term,” “Subscription” and “SaaS” respectively. A few number of attendees responded that this question was not applicable since they are not a software company. It would be over-simplifying to say all transaction complexity belongs to companies outside the SaaS world (40% of the companies have some type of subscription or SaaS model) – however you can see there is still a substantial base of companies selling perpetual software licenses.
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