Everything Charlie Fritsch said on any show that made the record, most notable first. Each card names its show and opens the statement there.
Fritsch: OEM partners capture 70-80% revenue splits versus 40-50% for VARs
“Typical VAR split is fifty-fifty up to that. It actually, a value-added reseller may only get 40% of the revenue. Whereas original equipment manufacturer can get, oh 70 to 80% depending on volumes.”
Fritsch: Build accounting platforms on existing ERPs rather than from scratch
“An accounting platform is, is, ah, daunting to build from scratch, so look at building on top of an existing ERP.”
Fritsch: ERP OEMs own code and keep higher splits despite minimum royalties
“So, with an OA, being an OEM, you own your own code, you own what you create, but obviously you don't own the ERP platform Product. Ah, a value added reseller provides configuration and training, ah, and support on an ERP, but they don't generally write any or…”
Fritsch: Negotiate flat minimum royalty commitments with your ERP vendors
“You want to avoid escalating minimum royalties and have a flat minimum royalty of course and as minimal, as low as you can go”
Fritsch: Investors do not discount valuations for software built on OEM ERPs
“Ah, so far all of the investor companies I've spoken to, that hasn't been a factor.”
Fritsch: Building software on top of an ERP enables leaner engineering
“Ah, and again, we can operate a little bit leaner, because we are built on top of an ERP, and then we host on AWS.”
Standalone hotel accounting software lacks the broad integrations of ERP platforms
“So in our world, in the hotel space, we compete with hotel-specific accounting programs, but they're not ERPs, and so they don't have a broad integration with lots of other software that you can take advantage of on an ERP.”
Fritsch: Negotiate development time before ERP minimum royalty payments begin
“When you're starting, it's going to take more time than you think. So try to get as much time prior to starting minimum royalty payments.”
Hotel Investor Apps pays ERP royalties on SaaS fees, not implementation
“We don't pay, ah, any revenue to the ERP, ah, from our implementation and training fees. We only pay on the monthly SAS fee.”
Hotel Investor Apps expects upselling BI tools to triple hotel customer ACV
“So we have some business intelligence tools that we're now just beginning to sell to our same customer base to double, potentially triple, The annual contract value that we have from each, ah, hotel that we sell.”
Fritsch predicts BI revenue will surpass accounting software revenue by 2024
“Next year and the year after, the revenue from our business intelligence applications are gonna equal or exceed the, ah, the accounting piece.”
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