BGL’s objective is to invest in the development and ownership of its IP in the BOS Products. The board of directors of BGL believe that this represents an optimal means of generating income and increasing asset values. BGL’s management has identified three core outcomes as criteria for product investment:
1. identification of a large-scale market opportunity, as established through due diligence and market understanding;
2. equal or whole ownership of the IP; and
3. identification of qualified partners to support and distribute its products through its ‘Special Purpose’ licensing program.
BGL has developed an operating model which employs outsourcing to minimise the operating and capital expenditure of the business enabling it to be run on a low cost basis whilst ensuring that IP can be developed, protected and effectively commercialised by BGL.
The BGL business model aims to retain key strategic and high value activities whilst outsourcing low value activities. This model is intended to enable BGL to maintain a low employment headcount even once significant growth in the business has been delivered. BGL will seek to retain control of strategic decision making, such as decisions regarding the development of and specifications for new products, controlling the software methodologies used in product development and identifying and targeting key potential customers.
BGL’s core operations are based in Eastern Australia. The Directors and senior management team are predominantly based in Sydney. Program delivery and finance functions are provided by BGL executives in Melbourne and certain operational support is based in Brisbane. The BGL management team will consider relocating to London shortly after the completion of the Acquisition in order to enable them to better leverage their international client relationships, whilst retaining the Eastern Australia based operations for product design, support and Asia Pacific product sales.
For BOS-360 'Work Patterns', software strategy and architecture decision making is controlled by BGL and managed by BOS employees located in Sydney, Australia, London, United Kingdom and in the Silicon Valley, United States. BGL undertakes select outsourcing of non-core development activities with business partners located in Melbourne, Australia, and Chennai, India.
The Directors intend and believe that the BOS Products will be sold via a variety of channels: direct sales via the internet, direct sales to large corporate clients and organisations, and sales via resellers to smaller corporate clients.
The initial route to market is via the internet, with Kronologica and Meetingly available for purchase online to subscribers. Subscribers to Kronologica can purchase licenses on a per person basis that include up to five devices per person. Subscribers to Meetingly can purchase a bundle of meetings, with reduced cost incentives for bulk purchasing. In both cases an enterprise licence can be entered into for larger organisations (as outlined in paragraph 6.3.2 below).
DIRECT SALES – ENTERPRISE CLIENTS
BGL has identified a number of target customers with greater than 250 full time employees (medium & enterprise clients). The Directors and the Proposed Directors believe that these clients are likely to require a more comprehensive consultation and on-boarding process from which BGL will generate additional revenues according to the scope of the individual client specifications.
The Directors intend and believe that resellers of the BOS Products will be technology companies, professional services organisations, accountants and other software vendors seeking to augment their existing product offering. The scale of a reseller can range from professional services (e.g. medium to large business consulting practices), technology products and services organisations (e.g. medium to large integrators) and non-competitive software vendors looking to augment their offering to their clients. Under the reseller channel, the Directors and the Proposed Directors believe that subscribers for the BOS-360 product will be gathered from the resellers’ existing client base with the reseller providing their own product marketing and customer support. A corporate marketing and referral system will be provided by BGL which the Directors and the Proposed Directors believe will generate additional service revenues. The Directors intend and believe that product revenue will flow to BGL and commissions will be paid to the reseller. BGL will also be the licensee of its products to enable a white labelling solution for multinationals and for its ‘Special Purpose’ license partners.
LICENSING FOR ROYALTIES
BGL invests in patent and copyright protection of its IP. BGL’s longer term strategy is to enter into special purpose license agreements with global enterprises that invest in products with equally large multi-national client bases. In such circumstances, BGL may elect to license its IP in return for royalty fee income over a five to fifteen year horizon. Under a license agreement, it is intended that the licensee of BGL’s software would be responsible for the development, commercialization and support services for the end product.
Product support is currently provided by Redgum Ventures and BGL staff. BGL is intending to assess alternative offshore low-cost support providers in order to meet its international business growth requirements. Other clients will be supported by online help or through proposed resellers of the BOS Product.