ict-product-company-business-plan

name	ict-product-company-business-plan
description	Generate or audit the business plan for an ICT product company (non-SaaS) — licensed software, embedded systems, hardware-plus-software, on-premise enterprise software. Different unit economics from SaaS (one-time fee + maintenance vs recurring subscription). Use when the product is sold under perpetual licence, as a unit, or with a hardware component.

ICT Product Company Business Plan Skill

Overview

Not every ICT plan is SaaS. Licensed-software, embedded-systems, hardware-plus-software, and on-premise enterprise-software companies have a fundamentally different economic model. This skill produces the plan for that company profile, with explicit guidance on the SaaS-transition path that most of these companies should plan over time.

Use When

• Product is sold as a one-time licence (perpetual or term)
• Product has a hardware component (M-KOPA, BasiGo, Sun King, Helium)
• Product is on-premise enterprise software
• Hybrid (one-time licence + recurring maintenance + optional SaaS layer)

Do Not Use When

• Pure SaaS (use SaaS skills)
• Pure services (use ict-services-firm-business-plan)

Required Inputs

• Product description and revenue model (licence + maintenance / hardware + service)
• Unit pricing and cost
• Sales cycle and channels
• Manufacturing / supply-chain (if hardware)
• Maintenance / support cost profile

Workflow

1. Define the revenue model:
   • Perpetual licence + annual maintenance (15-25% of licence fee)
   • Term licence (1-3 years)
   • Hardware-plus-software bundle (one-time + recurring service)
   • PAYG / financed (M-KOPA model)
2. Compute the unit economics:
   • Revenue per unit (one-time + recurring components)
   • Cost per unit (hardware BOM if applicable; software COGS; install/onboarding)
   • Gross margin (typically 40-65% for hardware-inclusive; 50-75% for pure licensed-software)
   • Maintenance attach rate (target 90%+)
   • Maintenance renewal rate
3. Plan the SaaS-transition path (most of these companies should plan one):
   • Phase 1: Pure perpetual + maintenance (current)
   • Phase 2: SaaS offering for new customers (some cannibalisation acceptable)
   • Phase 3: Migrate existing customers to SaaS
   • Mersch's perpetual-vs-SaaS chapter is the source
4. Compute the financial profile:
   • Higher one-time revenue per customer than SaaS
   • Lumpier cash flow (large up-front + smaller recurring)
   • Different working-capital pattern (no Working Capital Trough but unit costs)
   • Inventory if hardware
5. Hardware-specific considerations:
   • BOM (Bill of Materials) cost
   • Manufacturing partner / EMS
   • Supply-chain (Africa: shipping, customs, FX-on-import)
   • Inventory management
   • Field-service / repair operation
6. Design the sales motion — typically channel + direct, longer cycles, RFP-friendly.
7. Plan the productivity moat — how does the product avoid commoditisation?

Quality Bar

• Unit economics computed per unit, not aggregate
• Maintenance attach + renewal rate explicit
• SaaS-transition path planned (or explicit reason not to)
• Hardware supply-chain modelled (if applicable)
• Sales cycle and channel structure designed
• Cash flow recognises lumpy nature

Anti-Patterns

• Treating one-time licence as if it were ARR (it isn't)
• Hardware product without supply-chain plan
• No maintenance / support contract structure
• "We'll convert to SaaS later" without roadmap
• Underestimating field-service / repair cost
• Ignoring FX on imported hardware

Outputs

• Unit-economic model per product
• Revenue model (licence + maintenance / PAYG / etc.)
• SaaS-transition roadmap (or rationale for not transitioning)
• Hardware supply-chain plan (if applicable)
• Sales motion and channel structure
• Financial profile distinct from SaaS

References

• book-extractions/mersch-hacking-saas-extraction.md — perpetual vs SaaS comparison (ch. 1)
• book-extractions/tod-building-multi-tenant-saas-architectures-extraction.md — MSP vs SaaS clarity
• book-extractions/haines-how-to-create-a-business-case-extraction.md — business-case discipline for product investments
• skills/ict-services-firm-business-plan/SKILL.md — sister skill
• skills/saas-unit-economics-and-cohort-model/SKILL.md — for SaaS-transition modelling

Africa / Uganda Application Notes

• Hardware-inclusive plans are a major African opportunity (energy access M-KOPA / Sun King / Zola; e-mobility BasiGo / Ampersand; agritech tools Hello Tractor).
• PAYG financing is a powerful African model — combines hardware + software + financing.
• Customs duty, VAT, and shipping costs are material — model explicitly.
• Local assembly often required for tax / local-content reasons — plan partner relationships.
• Field-service network is a real capability (M-KOPA built ~3,000 field agents in Kenya).
• Mobile-money integration is standard for PAYG.
• Public-sector procurement of on-premise software has specific compliance (data localisation, security certification) — plan early.
• The transition from licensed-software to SaaS is harder in African enterprise markets where data-residency concerns and unreliable connectivity favour on-premise.