Blue Port Technologies - Investors

Software margins are, and will remain, well-above average when compared to other industries.

Software companies historically have produced pre-tax profits of 18% to 40% after research and development costs. These margins are well above average when compared to many other industries, and are not coming down as the industry matures. These kinds of margins can be harnessed to provide excellent return on investment for financiers, as well as exciting business opportunities for company managers and employees. These opportunities are enhanced in Canada where Scientific Research and Development tax incentives are available to Canadian controlled private companies.

The software industry has changed from a product based industry to a relationship based industry founded on perceived abilities in product development and enhancement, customer training, and service and maintenance, and a payment structure more consistent with that business model.

Customers are looking for software products that are proven and effective, that are delivered through a business model based on “train-the-user” or “train-the-trainer”, with minimal customer provided technology expertise and management, continuous product improvement and upgrades, service and customization available on request as needed, and a software supplier which is a long-term and continuous partner-supplier to the customer. License fees as a percentage of a deal are falling, and long-term service and maintenance contracts or software leasing arrangements are becoming the most attractive way for a customer to acquire software technology. Combined with opportunity i), this creates the opportunity for a high margin business with sustainable and predictable revenues, as well as a serious growth opportunity

The majority of privately-owned software companies fail to achieve their potential because management lacks the resources or ability to properly market their products

Software companies tend to be established and run by software engineers and developers. By their very nature they are not sales and marketing people. They also tend to build their companies around one or two key products and often strategize on very competitive prices to attract market share. The result is companies with viable and exploitable products which lack the vision or ability to properly penetrate their chosen markets. They do not have the funding or personnel to prepare and execute realistic marketing programs, and are faced with significant customer acquisition costs

As baby-boomers get closer to retirement, there will be an increasing demand for cash-flow based investments

Cash flow is back, not only as an investment goal in and of itself, but as the basis by which equities should be valued. High margin industries with sustainable and predictable revenues with growth opportunity are, and always have been, the dream investment

The Industry opportunities identified above can be exploited by a software company which brings sales and marketing vision, experience, ability and funding to the table for existing and proven technologies and markets, but which prioritizes building and sustaining cash flow in the long haul over a “grow it and flip it” mentality.

As such a company Blue Port will:

• Find financiers and investors seeking cash flow based investments to hold indefinitely.
• Source software management teams with proven technologies for a ready-to-buy marketplace which are strong on technology but low on sales and marketing capability (personnel and money).
• Make investments in such software opportunities where, as part of the investment, it provides strategic executive management, financial management, and sales and marketing management, expertise and personnel, combined with financial investment weighted in favour of immediate sales and marketing activities over research and development or infrastructure.
• Focus on cash-on-cash return on investment in a business model which rewards the investor (dividends) and the management team (bonus, funding for product development, funding for growth, job security) when an investment is successful and achieves profitability thresholds.
• Build a portfolio of business to business software products which give the sales and marketing team the multiple SKUs they need to make the most out of each and every sales opportunity through enhanced credibility, shared marketing supports, and lower overall cost of customer acquisition.
• Free the software companies from the strain of customer acquisition so they can focus on what customers really want – continuous product development, ongoing training and customer service - and free up the cumulative creative minds in the acquired companies to develop new Intellectual Property for Blue Port.

That is our vision for Blue Port Technologies Inc.