Aladdin Knowledge Systems.

1) Why did Aladdin buy FAST? Was it a good move?

Because Aladdin needed to consolidate its market position in the software security business. The acquisition of FAST was intended to help achieve this goal. Almost 95% of Aladdin's revenues were from sales of software security products, however, sales growth in this area was slowing. So acquiring FAST was a good move. The company expanded its market share, selling to different clients.

2) Who are the customers for each product? How do they buy? What are the implications for customer acquisition and retention?

The customers are very diverse. The purchasers of software security products were developers of expensive software packages and publishers, ranging to all sizes of companies. Main buyers were from small companies developing specialist to Microsoft, vertical industry software, which together accounted for 70% of sales; vertical market software developers accounted for 15%; and multinational corporations, which packaged software with hardware, also accounted for 15%.

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Most purchasers looked at no more than two software security product lines before settling the deal with a single manufacturer. The customers rarely mixed security technologies from several vendors, because once installed, the dongles (a component which encode a program that can be decoded only in the presence of a particular software program code) could not easily be retrofitted to fit alternative programs.

For smaller firms, Presidents and sales managers decide or not to invest in software security protection, whose own bonuses were vulnerable to the impact of piracy. In smaller firms, technical specialists who make the decision to invest in software security protection.

Customers protected their software acquiring Aladdin's products. Aladdin selling the dongle was just beginning a long-term relationship with these customers. Aladdin provided free software upgrades for its customers. The company offered free technical support for its product. He clients...