Businessmodel of Micro Focus

Customer Segments

Micro Focus has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at firms of all industries and sizes.

Value Proposition

Micro Focus offers two primary value propositions: accessibility and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired several firms since its founding, including software firms NetManage, Serena Software, and the Attachmate Group, Borland (a provider of application lifecycle management tools), Quality Solutions (a provider of automation toos), Authasas (a provider of authentication middleware), and the Orbix, Artix, and Orbacus software product lines of Progress Software. This strategy has enabled it to significantly expand its capabilities and diversify its portfolio.

The company has established a strong brand due to its success. It has over 20,000 clients, including 91 members of the *Fortune *Global 100. It has over 4,500 employees in more than 80 locations worldwide and generated annual revenues of $1.4 billion in 2016. Lastly, it has won a number of honors, including the 2016 Webaward for Outstanding Achievement in Web Development.

Channels

Micro Focus’s main channels are its sales and business development teams. The company promotes its offerings through its website, social media pages, and participation in webinars, summits, exhibitions, road shows, and conferences.

Customer Relationships

Micro Focus’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services - Micro Focus offers the following premium support options:

• Premium Support Engineer – A highly experienced expert who helps clients maintain their business systems.
• Service Account Manager – A person who gains an in-depth knowledge of clients’ technical support needs and coordinates the efforts of support personnel. Service Account Managers also host regular meetings and conference calls to review customers’ support history.
• Advantage Incident Packs – An option that enables clients with serious or complicated issues to obtain access to a senior support engineer who can provide a higher level of service. These staff members respond to client’s inquiries within the space of an hour. Training Services - Micro Focus offers on-demand and instructor-led (online or at client’s site) training options for clients. They can also receive certifications in specified subject matter.

Consulting Services – Micro Focus provides a team of experts that help clients design, plan, and implement business solutions in order to meet their business goals.

Key Activities

Micro Focus’s business model entails designing and developing products and delivering related services to customers.

Key Partners

Micro Focus has over 5,000 partners in over 30 countries; they fall into the following categories:

• Independent Software Vendors – Firms that sell the company’s software to extend its reach.
• Application Rehosting Solution Providers – Firms that help the company’s customers optimize the value of their Mainframe COBOL and PL/I systems, through rehosting and modernization services. Specific partners include Alebra, Canam Software, Datatek, GSF Software, and Metaware.
• System Integrators – Firms that use Micro Focus’s offerings to deliver various solutions, including application consulting services, application management services, and integration services. Specific partners include Accenture, Capgemini, Cognizant, Fujitsu, Infosys, Microsoft, Tata, and Wipro. Partner benefits include around the clock support services and volume and maintenance discounts. They also receive access to the Micro Focus Partner Portal, which offers product and technical information as well as sales and training resources.

Beyond business partners, Micro Focus maintains an “Academic Program” through which it works with universities and teaching institutions to promote education on the COBOL language. It also operates the Technical Transfer Partners (TTP), whose members advise customers and others on the usage of Micro Focus’s solutions in academic environments.

Key Resources

Micro Focus’s main resources are its human resources, who include the engineers that design and develop its software, the sales employees that promote it, the training employees that provide instruction, the consulting employees that offer advisory services, and the customer service personnel that provide support.

Cost Structure

Micro Focus has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is sales/marketing, a fixed cost. Other major drivers are research/development, a fixed cost, and cost of goods sold, a variable expense.

Revenue Streams

Micro Focus has four revenue streams:  License, Maintenance, Subscription, and Consultancy revenues.