Portes Case
The Portes Case
Boston-based Portes, Inc. is a software company that has been in operations for 10 years in the United States. Its flagship product is systems recovery software (called
RecoverTM) that enables firms to recover data from damaged hard drives. The product has to be customized to client needs and the value of each product unit is high. The firm was founded by its current CEO, Diane Mullins, who is a software expert with a entrepreneurial bent. She studied computer science as an undergraduate, worked for four years in a reputable U.S. software firm, then went on to do an MBA at INSEAD in
France. Immediately upon completing her MBA, Diane moved back to the United
States and started her own company, Portes, Inc. The company now employs 60 people, most of whom are trained programmers.
A few years ago, Diane started to suspect that Portes, Inc. had reached a plateau with its systems recovery product. The rapid growth of the early years had waned, although the product was still quite profitable. Diane felt that one problem with Recover was that since it had to be customized to client needs it could not be mass marketed or sold in great volume. Therefore, even though some of Portes’ distributors advertise their product on the web, almost none of the sales take place on the Internet. Even though it means loss of customization service revenues, Diane thought that Portes needed to step up its R&D activity to come up with mass-appeal software that did not need any customization. As a result of directing energy and resources in this direction, Portes,
Inc. now has a portfolio of standardized high-end data recovery software. One advantage with these products is that they can be sold over the Internet. Although Portes was using its existing distribution channels to sell these products on the Web, the commission charged by the distributors was considered to be too high compared with the price of the product. Not having their own Internet
Boston-based Portes, Inc. is a software company that has been in operations for 10 years in the United States. Its flagship product is systems recovery software (called
RecoverTM) that enables firms to recover data from damaged hard drives. The product has to be customized to client needs and the value of each product unit is high. The firm was founded by its current CEO, Diane Mullins, who is a software expert with a entrepreneurial bent. She studied computer science as an undergraduate, worked for four years in a reputable U.S. software firm, then went on to do an MBA at INSEAD in
France. Immediately upon completing her MBA, Diane moved back to the United
States and started her own company, Portes, Inc. The company now employs 60 people, most of whom are trained programmers.
A few years ago, Diane started to suspect that Portes, Inc. had reached a plateau with its systems recovery product. The rapid growth of the early years had waned, although the product was still quite profitable. Diane felt that one problem with Recover was that since it had to be customized to client needs it could not be mass marketed or sold in great volume. Therefore, even though some of Portes’ distributors advertise their product on the web, almost none of the sales take place on the Internet. Even though it means loss of customization service revenues, Diane thought that Portes needed to step up its R&D activity to come up with mass-appeal software that did not need any customization. As a result of directing energy and resources in this direction, Portes,
Inc. now has a portfolio of standardized high-end data recovery software. One advantage with these products is that they can be sold over the Internet. Although Portes was using its existing distribution channels to sell these products on the Web, the commission charged by the distributors was considered to be too high compared with the price of the product. Not having their own Internet