Phurnace Software Case Study
Phurnace Software, LLC: According to the business plan set forth in the case, assuming the purported software capabilities were real, I would invest in Phurnace Software due to four primary reasons, including solid market validation, niche market, favorable business model and huge potential market and conservative projection.
Solid Market Validation: the market validation included both primary research and secondary data collection. The team conducted several face-to-face interviews with the actual J2EE application users and posted a request to fill out the online survey on more than a dozen Java application related news groups. After the number one pain point and market interest level were determined, the team supported the statements by using numbers, scales, and percentages. In addition, the same market pain conclusion was drawn through a secondary market validation method, an independent study. Strong market validation from a variety of sources presented convincing pain points and interests.
Niche Market/Industry: The software, J2Install, enables fast and reliable server deployment while eliminating configuration errors and accelerating the enterprise application development life-cycle. The dominant vendors of J2EE application servers were IBM, BEA Systems and JBoss. J2Install fell in a niche between 2 existing industries, the J2EE management software industry and the installation software industry, which simple deployment and maintenance were not their core competences then. Phurnace Software, not stepping on major players’ toes and, had less possibility to encounter direct competition in a short period of time. They just needed to develop the product at the fastest pace possible, making J2Install to reach the market before other companies developing similar products.
Favorable Business Model: Phurnace’s business model followed the traditional “license-for-use” software paradigm, which was no stranger to the software industry. Customers would pay a
Solid Market Validation: the market validation included both primary research and secondary data collection. The team conducted several face-to-face interviews with the actual J2EE application users and posted a request to fill out the online survey on more than a dozen Java application related news groups. After the number one pain point and market interest level were determined, the team supported the statements by using numbers, scales, and percentages. In addition, the same market pain conclusion was drawn through a secondary market validation method, an independent study. Strong market validation from a variety of sources presented convincing pain points and interests.
Niche Market/Industry: The software, J2Install, enables fast and reliable server deployment while eliminating configuration errors and accelerating the enterprise application development life-cycle. The dominant vendors of J2EE application servers were IBM, BEA Systems and JBoss. J2Install fell in a niche between 2 existing industries, the J2EE management software industry and the installation software industry, which simple deployment and maintenance were not their core competences then. Phurnace Software, not stepping on major players’ toes and, had less possibility to encounter direct competition in a short period of time. They just needed to develop the product at the fastest pace possible, making J2Install to reach the market before other companies developing similar products.
Favorable Business Model: Phurnace’s business model followed the traditional “license-for-use” software paradigm, which was no stranger to the software industry. Customers would pay a