Specialist
Former senior director at LogMeIn
Agenda
- TeamViewer's market share dynamics and competitive win-rate vs LogMeIn (NASDAQ: LOGM) and Bomgar in enterprise and mid-market deals
- Pricing environment to land an enterprise and mid-market customer and ability to up-sell
- TeamViewer Tensor technology vs rivals 4. Core decision-making criteria for customers, purchasing patterns and ease of switching vendors
Questions
1.
How would you estimate market share between players including TeamViewer, LogMeIn and Bomgar? Do you think there have been any shifts in customer or industry verticals?
2.
Would you say those players are taking market share from one another, or has the market remained fairly static over the past couple of years? How could it evolve over the next 1-2 years?
3.
How would you segment a mid-market customer relative to an enterprise customer, and how might TeamViewer and LogMeIn do the same? What is the difference in the number of seats these two client types purchase?
4.
Would you say mid-market vendors experience scalability issues if the companies they sell to increase to the employee size of an enterprise customer? Would you expect them to transition to packages from companies such as LogMeIn or TeamViewer? You mentioned that the mid-market was more fragmented.
5.
Who would you say are the usual vendors competing in enterprise segment RFPs [requests for proposals]? Are LogMeIn, TeamViewer and Bomgar part of this group, and are there others?
6.
How often do you think customers purchase software from two vendors? In the enterprise segment, is it companies with 1,500-plus employees, or is it only those with 5,000-plus or 10,000-plus?
7.
How do you think two vendors share a customer’s wallet spend, when one is the main solution and one is the back-up? Is it that the main provider takes 60-70% of the budget and the secondary provider around 30%, or will the split be almost equal?
8.
Would you say that, in multinational corporations where there is more of a 50/50 split between two vendors, the European units are more likely to choose TeamViewer given it’s Europe-based, and the North American units are more likely to choose LogMeIn? Or is it more ad-hoc?
9.
Do you think enterprise customers will trend towards having a dominant and back-up solution? Or would you describe the trend as more towards an even investment split between two providers?
10.
How often would you say mid-market customers use one provider? Is this more prevalent in the mid- market than the enterprise segment?
11.
Do you think it makes sense to discuss companies’ competitive win rates in the enterprise segment, given that it seems most companies, at least those with 1,500-plus employees, are unlikely to allocate their spend to only one vendor? Does it make sense to refer to win rates between LogMeIn and TeamViewer?
12.
How would you say the win rates for TeamViewer and LogMeIn differ in the mid-market, given the more fragmented market and greater numbers of vendors in the RFPs?
13.
Could any of the mid-market vendors enter the enterprise segment? Or would you say the quality of their offerings or scalability does not approach TeamViewer and LogMeIn’s, and that it would take significant investment from these companies to challenge LogMeIn or TeamViewer on an enterprise deal?
14.
Do you think it is unlikely that TeamViewer and LogMeIn would want to expand into the mid-market, given its volatility, and that they are sensible to focus on the enterprise segment? You said you thought mid- market providers are content not to enter the enterprise segment.
15.
How would you estimate LogMeIn and TeamViewer’s revenue splits between the mid-market and enterprise segments?
16.
Would you expect mid-market deals to contribute a greater portion of LogMeIn’s revenue than enterprise deals, even if the average deal size for the mid-market segment is smaller?
17.
How would you describe past and current trends in average deal sizes? Clearly this will differ between enterprise and mid-market, but could we highlight both, and any different scales within each which you would like to draw attention to?
18.
Do you think LogMeIn and TeamViewer’s mid-market pricing in the USD 600 per seat range is defensible, or do you think they could have to reduce it further? You mentioned that their pricing in this segment was stabilising.
19.
How do you think the average price per seat in the enterprise segment differs from the mid-market? As we discussed for the mid-market, are you aware of any increase in discounting, and if so, which company is driving that?
20.
Would you say TeamViewer and LogMeIn are always competitive on price in the enterprise segment?
21.
What do you expect is the typical margin for enterprise deals, given the competition and discounting we have discussed? Could vendors go as low as almost zero margin to gain a customer on an initial deal, or will there always be a margin baseline which TeamViewer or LogMeIn will not fall below?
22.
On what timeframe do you think LogMeIn and TeamViewer could start scaling up an enterprise customer from its initial deal, if for example it initially bought 30 seats? Is it in the first couple of weeks, quarter, half- year or year?
23.
Would you say TeamViewer and LogMeIn are successful in starting to cross-sell within the 30-60-day timeframe you mentioned? How often do you think LogMeIn or TeamViewer have a customer review its existing 30 seats in that period and decide to hold spend?
24.
What do you think is the customer preference on contract length? You mentioned that one-year contracts are more common, but two years is these companies’ preference for large customers. How often do customers typically get their preferred length of contract?
25.
Would you say customers typically opt to add another 30 seats, when they have initially bought 30 seats and 60 days later are looking to purchase more, or are they more incremental? Do they add two, five or 10 seats?
26.
How competitive would you say are customer deal renewals, given that most are on one-year contracts? Will virtually every customer on renewal put out a competitive tender, or go to its current vendor first?
27.
How competitive do you think renewal pricing is between companies such as LogMeIn and TeamViewer? How hard will customers negotiate if they have not been up-sold additional products within an annual contract? Does this factor make a difference?
28.
Would you describe it as a win for TeamViewer or LogMeIn to maintain flat pricing in the mid-market? Given the segment’s challenges, is it common that they must cut prices slightly?
29.
How sticky would you say customers are in this market? It sounds as if changing solutions is unchallenging, and you mentioned that 30% of customers renewing their contracts each year might put out a competitive tender.
30.
How do you think TeamViewer’s sales team balances its personnel between maintaining existing customers through contract renewals and gaining new customers? It has 53 full-time employees dedicated to enterprise sales and, from its most recent results, it has 590 customers with an annual contract worth over EUR 10,000.
31.
Do you expect ancillary products from across this industry, such as the TeamViewer IoT solution you mentioned earlier, to drive a greater average price per seat for providers?
32.
Do you have an estimate of the pricing uplift customers would be willing to pay for IoT-type products, or is it too early in their development phase to have the data for that?
33.
Would you say there are certain sizes of customer, or customers in particular industry verticals, which are more likely to be attracted to an IoT offering?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited