Cash Flow favors your larger vendors

I see people asking why some products seem to be on the demise, after having solid performing years. It really all comes down to one factor, Cash Flow. Vendors can only maintain and grow, based on the amount of money they have coming in. That has become very difficult to project on a long term basis due to many factors. The global economy does play a part but I am more incline to think the vast new numbers of competing new products effects it more.

New upstarts obviously have the initial capital to get started with all the bells and whistles but, have no clue as to the long term projection of where they may be in one to three years. It literally comes down to blind luck. A few have been able to find the elusive lottery number that allows them to propel themselves beyond their initial investment into a growth period. Two good examples are Hitman Pro and Prevx. It can only be sustained with continued yearly renewals or new customers.

The majority will fold in time, but the negative effect they have on the long term vendors is measurable. We start to see quick end fixes in the likes of toolbars and search engines being added to paid software. This is reality is the tale-tale sign of a vendor having positive cash flow problems and also, in reality, is not the long term fix for the product.

What is the answer you may ask. I honestly don't know. Big vendors like Norton, Kaspersky, Panda and a few others, have resources they can draw from, but only for a short time. Some cut staff, others venture out, outsourcing their product to other vendors, but all of these have inherent risks. None can be projected as a sustainable long term investment guarantees.

The smaller vendors with basically no staff, will survive just based on their love for their creation. Defensewall would be a good example. Small staff. little overhead and the ability to adapt to the ever changing market environment. Even 64 bit.

What we will see in the future, is the opposite of what we have seen for the last 3 years. Up-starts will find that raising the capital to start a venture will have dried up. Smaller vendors will survive if they want to continue to evolve their creations but with minimal profits. The ones that will ride the storm will be the larger vendors. The smaller the competition, the more influx of new customers and renewals and thus a longer positive cash flow infusion.

 

You heard it here first folks. Please remember, the value of your investment and the income from it can go down as well as up and isn't guaranteed. Just in case

 

Smaller vendors can help themselves by eliminating unsustainable business models like life time licences and free versions that have no time limit.

 

So not true. avast!'s entire business model is built around free version. And they are doing just fine. Especially because they hardly need any marketing from their end, because users do all the advertisement with free version.

 

... and buy it for their businesses. The simple fact is that avast! has already got the ball rolling.

 

True, but its too hard for a small vendor to charge £30 per year if nobody's heard of them. You charge more as demand increases... although I agree, no idea how the small vendors do it, especially as constant R&D is required.

Perhaps the idea is to wait to be bought out.

 

Why are you using such products then?

 

Well, in regard of Avast, they have another major advantage over they (freeware) competition: they develop everything in-house, for comparison

AVG: bought Ewido for malware,Linkscanner for web defense, Primary Responde Safe Connect for behavioral module

Avast: bought ?

 

Didn't avast incorporated GMER into their product? So technically, avast brought GMER's code.

 

Develop in-house, merge, acquire, purchase, licence... all have their advantages and disadvantages - totally depends on the situation.

 

Lifetime licenses for home users are only an issue if you stop making advancements and have no alternate pricing model for corporations.

 

You mean MBAM of course and why not? I didn't say it was evil just not always a good business practice in many cirumstances.

 

maybe true the most of cases

not all vendors buy or share anti-malware technologies

 

I prefer smallish companies sometimes, just big enough.
Usually they try to be more competitive
But that doesn't means i won't use big vendors software! If they're good and they have some awesome discounts, count me in