Bidding on Competitor's Trademarked Terms in AdWords

The trademarks, company name, brand names and product names bring more traffic to our website. It is good that we can bid for our own terms so that we will be shown both in organic and paid search if anyone search the terms.

At the same time, we can bid for the competitors trademarks and brand names as long as we are not using those terms in our Ad text. This policy changes from country to country. We can bid for competitors trademarks in US, UK, CA, JP...

There are few exception countries where we can not bid for the competitors trademarked terms.

Ad campaigns targeting Australia, Brazil, China, Hong Kong, Macau, New Zealand, North Korea, South Korea, or Taiwan are restricted in using trademarks in keywords (except for accounts that have been authorized to use that specific term). 

The trademark terms can be used in the Ads with the companies acceptance. This will allow the partners of a company to bid and use the terms in the Ad text.

If the competitor complain to Google, Google will not take action on any of those complains as long as we are not using it in the Ad text.

It doesn't mean that the competitors will not go for legal action. They may take steps and we have to be ready to face it. Similarly, our competition also will bid on our trademarks and we have to be prepared for that.

The various types of terms that we can consider are

• Competitor Company Name
• Brand Name
• Trademarks
• Product Name
• Product model names / numbers, Part Numbers
• Website name

The usage of trademark terms in the display URL is allowed. Google will not restrict the URLs. If we are using the trademarks in the Ad text, it will be blocked and a notification will be sent to the advertiser. In the case usage of trademarks in the Ad images, a review will happen before the image goes live and if there is any usage of trademarks, it will be rejected.

Saravanan

Atlassian 2012 Revenue Projection

Atlassian an Australian based tech. company, which is selling products like, Project and bug tracking software, Collaboration software and version control system software. They are doing on-premise and on-demand business.

The company was started in 2002.  They have reached their 100 M + revenue in 2011 from $17 M in 2007. This year the prediction is 47% growth that is they will do around 148 M in revenue. This is one of the biggest growths in the software industry in 2012. 

They achieved this without a sales person in their company. The products are selling on their own. The number of active customers is more than 23,000.

There is a rumor that they will go for IPO in 2012. The valuation of this company is between $700 M to $ 1 Billion.

Atlassian, which makes software for programmers to collaborate on projects, has added three new board members to prep itself for an initial public offering. 

Joining as Atlassian’s board chairman is Doug Burgum, former board chair at SuccessFactors and CEO of Great Plains Software. Also joining the company’s board is Murray Demo, former CFO of Adobe Systems, Dolby Laboratories and LiveOps, and  Kirk Bowman, venture partner at Accel Partners and former executive vice president at EqualLogic and VMWare.

Saravanan

Innovation and Acquisition - The Growth Driver for Trimble

Trimble an engineering products, navigation and surveying company, growing continuously for the past few decade steadily. From 100+ M in early 1990s to 1.6 billion in 2011. The growth is not an exponential one as they have concentrated on their core business of engineering products, surveying and complementing business.

They are doing business on surveying, navigation and construction instrument production. Later they introduced the Global Positioning Systems (GPS) into their surveying and navigation. They are the first company to introduce the GPS technology into commercial and traditional products. They were investing more on this technology.

In 1990 they went on public the first GPS company to go on public and started growing gradually. Their growth during 90s was vey slow and in 2000s it had ups and downs with the world economic fluctuations.

Their growth rate started increasing from 2000 onwards due to more concentration on investing on innovation of new technology and acquisition of complementing companies.

As per their CEO Steve Berglund,

“Continued innovation is a primary driver for us”

In addition he says acquisition also contributed for their growth.

" Acquisitions have played a role in our strategy, principally as mechanisms to establish beachheads in new market spaces, fill in product line gaps, or add new technologies to our solutions portfolio."

Their current IP portfolio has 850 US and international patent and they have acquired more than 35 companies. They are investing continuously on R&D that is 10-15% of their revenue is spent on their R&D every year. 

They were concentrating on the below to grow 

• Investing on R&D and do more Innovation
• introducing the latest technology into their existing products 
• Acquiring companies that are complementing their products
• Joint venture with companies to provide solution to enterprise 

Their major acquisitions are

• Spectra Precision Group - Offers Global Navigation Satellite Systems (GNSS), Global Positioning Systems (GPS), optical total stations, data collection hardware, field and office software
• Applanix Corporation - products for mapping and positioning from mobile platforms (air, land and sea).
• GeoNav GmbH of Wunstorf, Germany - A provider of customized field data collection solutions for the cadastral survey.
• Apache Technologies, Inc. of Dayton, Ohio. Apache designs, manufactures, and distributes professional laser products for construction leveling and alignment applications.
• Tekla Corporation - a leading provider of Building Information Modeling ("BIM") software
• Yamei Electronics Technology, Co. Ltd, PeopleNet, GEOTrac Systems Inc....

Many of their acquisitions happened in the last few years and that is one f the reasons for the growth.

Their joint venture is with the following companies

• Catterpiller Inc.
• Nikon corporation
• China Aerospace Science & Industry Academy of Information Technology (CASIC-IT)
• China Railway Eryuan Engineering Group Co. Ltd. (CREEC)

By providing enhancements to the existing products and adding complementing products (by direct R&D or Acquisition or by joint venture) any company can have a steady growth for decades. Of course the execution is one of the factors. Trimble is the best example for that under Steve Berglund (President and CEO from 2000 to till now).

Saravanan 

Oracle Acquiring more Cloud Based Companies - Acquires Instantis

Oracle has invested more on acquiring cloud based companies in the recent past. Lats week they announced acquisition of cloud based Project & Portfolio Management company Instatntis for an undisclosed amount.

Instantis has EPPM product that provides a single-system solution for managing multiple project portfolio types.

Oracle acquired Primavera one of a major project and portfolio management softwares in 2007. Now this acquisition shows their concentration on cloud business.


In the last one year Oracle has acquired the following cloud companies

• RightNow Technologies for $1.5 billion- Cloud based CRM
• Collective Intellect - Social Media Analytics and CRM 
• SelectMinds - Social talent souring and alumini management solution 
• ClearTrial - Clinical trial operations and analytical products

The cloud business has now started to consolidate. Many big companies are acquiring related cloud companies and started providing solution for enterprise. 

Oracle's previous big acquisition includes

• PeopleSoft for $10 billion
• BEA Systems for $8.5 billion
• Sun Microsystems for $7.4 billion
• Siebel Systems $5.8 billion
• Hyperion Corporation for $3.3 billion
• Taleo for $1.9 billion
• Primavera

In the next couple of years cloud business is going to be hot and all the early entrants who are able to provide end to end solution for enterprise will see a exponential growth. 

Saravanan

Google is Aggressive in Marketing

In the recent past every company is very aggressive in their sales and marketing activities. Google is not the exception. They were sending direct mailer for the users last year. In the recent past they have aggressively showing Ads in the AdWords especially Display network.

After their drop in Q3 revenue growth y-o-y, these are the approaches they are working on increasing the new customer base. The drop in CPC makes them to concentrate more on the increase in the number of new customers.

In the content network, they are showing the Ads just before the starting of the content. In that they have started showing Ads for AdWords. In addition, they have stared promoting free credit of  Rs. 2000 on Sign Up. This is the traditional marketing approach that they are trying.

On he other hand showing Ads in the content area will confuse the reader and it may have negative impact.

Saravanan.

Increasing New Customer Base - Companies Approach

Today it is great challenge for the companies to increase their new customer base. Different companies follow different system to achieve this.

Yesterday, I was talking to one vendor for decorating a hall (it is a theme based decoration), he was ready to do it for Rs. 5000. I was wondering, the same decoration that we have made some times back on our own costs Rs.2500 (materials alone) and nearly seven of our friends worked on it one whole night. Then I asked the vendor, whether he has any set already? He said, that he doesn’t have one. 

I asked him about his profit, he responded that as I am a new customer he wants only very less profit but he wants appreciation from us and our guests on the quality of decoration, so that he will get more orders latter.

This is how normal businesses will work. First time companies will give discounts/offers to increase their customer base. 

In the recent past companies like Google, BMC, Salesforce, and Solarwinds etc. acquire companies and increase their customer base. They do the acquisition by identifying companies that are doing business on products related to theirs. If they do acquire right products and project the right story, then they can cross sell the products and they can see the growth.

There is another approach in the cloud business. Many companies are integrating their product with other third party products so that they can provide a solution. So if you make your product highly extensible, many vendors will integrate their product with yours. This way you will get more exposure and you can increase your new customer base. 

Many vendors like Zendesk, BaseCamp, GetSatisfaction etc. integrated their product with JIRA a bug tracking software.

The third approach is product companies can develop new products that are related to the existing products and integrating it and provide it as solution. For this JIRA is an example. They have integrated their own products like Confluence, BitBucket etc with JIRA. 

In all the above cases, if we do a wrong approach, we will not succeed. In my view integration of salesforce with JIRA is not a big value addition compared to JIRA Zendesk integration. Some time even the acquisition of products will be a failure due to many reasons like integration problem, wrong identification of solution, culture problem etc. 

Saravanan.

Solarwinds Q3 Result Analysis

Solarwinds Q3 result was announced couple of days back. They made 71.7 M in third quarter that is couple of millions more than the analysts prediction.

The third quarter growth is 33% y-o-y. Both new licenses as well as the maintenance has grown on same percentage. Their maintenance growth is more than 30% for the past 19 quarters.

EMEA growth is 65% y-o-y. UK, Germany, France and middle east growth is 60% y-o-y. North America growth is 34%. US Federal gov. growth is 17%. It is lower than the last year growth of 24%. Australia, Japan, growth rate is 35%y-o-y.

During this period they acquired two small companies one is Athena Securities which on the Firewall log analyser front. On Network management domain the new license growth was 15%. Their international revenue drop is from 25 % to 22% from Q2 to Q3 2012

As per Kevin Thompson,

• Their focus is mainly on developing the relationship with the IT Pros
• Provide a product that are simple to implement, use and maintain
• Provide the products at the lowest cost

The main reason for their increased growth rate is increase in the awareness of the products.

Kevin also states that Solarwinds is the only choice for US federal IT management challenges.

Our focus as we move into the U.S. Federal government's fiscal 2013 will be to leverage our large and growing Federal install base to spread the story of how easy SolarWinds' products are to deploy and use. And that in periods of tightening Federal budgets, SolarWinds is the only choice to solve the U.S. Federal government's IT management challenges.

Their revenue per customer is $8800 which is almost maintained for the oast couple of years. This is not inclusive of the Kiwi and Dameware products that are lower cost products.

On responding to a question on investment on Japan market, Kevin was saying Internet is the main reach for them and that too organic traffic is to be increased. He was not for Paid search the CPC approach. He said it is kind of throwing the money in the well if we don't do it properly. And so they are concentrating on organic traffic. He expects there will be a good market in Japan next few years and they are in right direction.

To answer a question on best bundling module of Solarwinds, he said net flow analyser module is the best bundling with the network performance. Next to that is the applications performance monitor. These two are the major contributor on bundling.

On European growth, Kevin was saying, they are eating their competitor's food. They are hurting their competitor in many ways. They concentrate on the localized websites and localized email campaigns and news letter. They are facing tough time on NPM area. They are working on the product.

Saravanan

Stock Fluctuation for Software Companies

In the last few days there is big fluctuation in the stock value of big companies like Google, Apple and Microsoft. This is mainly after the announcement of Google's Q3 2012 result.

Google result shows drop in the net profit for the third quarter compared to last year. In addition the result was announced in advance due to manual error. The same day the Google price dropped drastically and the day's transaction was stopped.

Due to this drop the stock value of Apple went down. In addition after the release of the IPad Mini pricing, the drop continued.

Last week Friday Microsoft announced their result and there also the profit gone down compared to last year. The stock value has gone down around 8%.

In the last one month, Splunk value gone down by 18%. CA Inc. has got big growth in Jan 2012 also had small impact this month.

Solarwinds was doing well in this year due to more acquisition, gone down by 8%. The Q3 Result will be announced today. This may give some improvement in the value if the result is good.

Cisco had a big drop in May 2012 after their Q4 results, picked up in August 2012 after their Q1 2013 results. Their value also got affected after the Google & Microsoft results this month. In general, the PC or device market is getting affected and that is reflected in the Microsoft and Google results. The same is expected companies like Cisco.

As the Smart phones and tablets usage are increasing, the IOS and Android application development is hot. This will create a new space in the market.

Saravanan

Solarwinds on Cloud Business

Solarwinds took its first step on cloud business. It ties up with Copper Egg a Cloud monitoring and Analytics company to provide free tools for monitoring Cloud Performance on real time. It is free to monitor up to two servers in private and public clouds.

Enterprises who are using cloud computing can use the Solarwinds Cloud Performance Monitor for getting alerts on server, system and operating system  issues in public cloud environments like Amazon EC2, Rack Space, Microsoft Azure or private cloud environments.

SolarWinds Cloud Performance Monitor capabilities include:

• Windows, Linux, MacOS, and FreeBSD monitoring
• Configurable alerts and multi-user access
• 5-second monitoring resolution
• No system polling, push-only
• Delivered as a SaaS service
• Simple and easy installation in 10-seconds

Saravanan

Atlassian - SWOT Analysis

Scott Farquhar and Mike Cannon-Brookes start the Atlassian in 2002 with a basic product JIRA - Bug Tracker.

Today they have 400 employees and there are no sales people. They have products under the following category

• Project and Issue Management
• Collaboration and Content Sharing
• Distributed Version Control &
• Code Quality

Recently they have reduced the starting price of the their flagship product JIRA to $10 per month for Ten users. They are concentrating on the customer satisfaction. After the reduction of the pricing, there is an increase in the customers count by 3000.

They have done 102 M in 2011. This is 35% increase compared to 2010 revenue (75 M in 2010). In that 50% of the revenue is from JIRA the Bug Tracking tool.

Strengths:

Their product is highly configurable. They have rest API that helps users to integrate it with any other third party product.

Their business model is a big strength for them. They have both open source as well as low pricing for the product.

They have both on-premise and on-demand products. 85% of their customers are using on-premise products.

The market place strategy is a major success. We are able to see a maximum downloads of paid plugins both directly from Atlassian and from the other vendors.

As many companies are releasing plugin for JIRA, their customer base will increase and in turn the revenue will grow.

The product is sold on its own due to the quality of the products and the brand name. They have a complete PDLC solution at an affordable price. They will replace Microsoft Projects in many enterprises during the downturn.

Their enterprise customer count alone is more than 21,000.

The current count as at 24-May-2012 is 20,113 customers in 129 countries.

21,000 companies have purchased our enterprise licenses, and tens of thousands more own $10 Starter Licenses  

They count the customers as companies that have currently paid for subscription or licenses. That means their ave. revenue per customer is around 5k.

Their pricing model (user based license) is one of the reasons for the big revenue. Even the plugin cost is very high.

They have released the JIRA 5 in Feb-2012. Their revenue has gone more than 10M on the same month. May be 10M rev. in Feb is due to Enterprise release.

The revenue from Confluence & JIRA combination is selling considerably. In the market place the max. plugin sold through Atlassian is "Team Calendars for Confluence". For this JIRA integration is mandatory. At the same time there is a contribution from confluence as a standalone product.

They are going to increase the confluence on premise pricing from Nov 3rd 2012. The reason could be

• To increase the monthly subscription sale more (or)
• Product adds more value and users are ready to pay and so increase in the pricing

Weakness:

There is no vision in the future. They are doing the same set of products for the past Ten Years. They are all technical people and they don't have exposure on growing to the next level. 

They don't believe in Sales people. 

Opportunity:

As they have good tech talent and perfect issue management framework, they can integrate more collaboration tools such as Chat, etc and this will bring them more revenue.

They have raised fund with VCs. They will help them in moving the company to the next level.

Treats:

Not having good UI. They never give importance to it but in the social world it is going to be a big challenge for them.

The breadth of products they have are very less which may be a big concern for them. More companies are coming with the complete story like Atlassian. 

Saravanan

Google Q3 2012 result analysis

Google has announced its Q3 results. It shows 45% growth y-o-y in Q3 and 14b in total revenue. This includes the Motorola revenue of 2.4b.

On the high level if we see it, this is a big revenue, but the in general, there is a drop in its growth %.  The revenue growth % in Q2 & Q3 2011 compared to previous year was 32.0% & 33.5% respectively where as in 2012 it came down to 21% and 18,5% (after removing the revenue from Motorola). This is the lowest growth % in Google's history (after going public). 

The Revenue growth is mainly due to the Motorola Acquisition.

In addition this is a consecutive second quarter Google closed the quarter with a drop in net profit (due to Motorola investment). The total cost and expenses are increased in Q3 2012. The increase is very high compared to Q3 2011. It increased from 6.662M in Q3 2011 to 11.365 M in Q3 2012. In percentage the increase is from 69% in Q3 2011 to 89% in Q3 2012.

The TAC (traffic acquisition cost) is increasing in the recent past. This has gone up by 1.8% y-o-y. Google has paid a big amount to keep the google.com as default search in IOS 6.

If the growth is in the same pace, the fourth quarter revenue is going to be 15b (12.4b+2.6b).

For the first time in Google's history, US revenue has reached 50% of the total revenue. This is mainly due to slow down in Europe. 

As per the Google CFO Mr. Patrick, there is a drop in the aggregate CPC. So customers are bidding lower in the third quarter compared to last year but the number of clicks is increased.

Our aggregate CPC or cost-per-click was down 15% and down 3% quarter-over-quarter.

In contrast to the above, we are facing increase in the CPC as the competitors are bidding high. May be this is in B2B market. As we enter into the fourth quarter, the CPC still increases as our competitors are desperate in acquiring more contact to get the max. revenue in the final quarter.

ServiceNow Revenue growth analysis

ServiceNow has announced its Q2 2012 revenue growth in Aug. They showed 93%growth y-o-y and 20% q-o-q. They did 57 M in Q2.

They are expecting 61 M - 63 M in Q3 which is around 90%+ growth y-o-y. This year they will be doing around 230M. The growth is very high.

This year they conducted user conference and there were 2000 participants. This is double of last year. There is a big growth in their revenue. At the same time their spending is drastically increasing.

Compared to last year second quarter, they have doubled their spending. Last year their spending on sales and marketing was around 15 M and this year it is 33 M. In addition their net income has become negative.

They have gone public this year. The biggest advantage for them is this. When you become public, you have to see the growth rate mainly. The net income is going to be secondary for public listed companies.

Once they show the growth, the company value get increased. This is the major difference between a privately held company and a public listed company.

Saravanan

Solarwinds announced Q2 2012 results

Solarwinds released their Q2 results. They have grown 40% in total revenue and 43% growth in net income year over year. Their Q-o-Q growth is 7% in total revenue and 13% in net income.

Their selling cost has gone up only by 36% y-o-y and 3.8% q-o-q. This is also a great sign for their spending control.

They have done one more acquisition now. They acquired  webhelpdesk.com a help desk company (installable) for $20M. They are increasing their breadth of IT products by acquisition. They have acquired Seven companies in the last couple of years.

1. webhelpdesk.com - July 2012 - Help Desk - $20M
2. Eminentware   -  Feb 2012 - Patch Management - $ M
3. Dameware - Dec. 2011  -  Remote control tools - $40M
4. DNSstuff.com - Dec 2011 - DNS Management - $11M
5. TriGeo - July 2011 - Log Management - $35M
6. Hyper9 - Jan 2011 - Virtualization - $23M
7. Tek Tools - Jan 2010 - Storage Management -  $42M

I was expecting SWI will acquire a help desk company in Q1 2012, but it happend now in early Q3.

http://vpsaran.blogspot.in/2012/01/solarwinds-acquicition-continues.html

Solarwinds was expecting a revenue of around $245M - $255M, a 24% - 29% growth in 2012. The present growth rate shows they will be doing between $265M and $270M which is more than 33% growth. Their strategy of acquire and grow works very well.

Solarwinds CEO Kevin Thompson said that "SolarWinds feels comfortable with an acquisition a quarter".

Now they have few more areas where they can invest - Customer Support, Project Management and CRM. Soon they will move from IT to collaborative business applications.

One big draw back they have is that they are not investing on the cloud applications. They may miss that market now. As their approach is acquire and grow, it is very easy for them to acquire cloud companies and establish them self on cloud any time. Now cloud business is started growing, they will get good established companies when it matures. Then their growth rate will be fast and good.

Saravanan

Google Q2 2012 report - a Review

Google has announced its Q2 results $12.2 billion. It is 35% growth y-o-y and 15% growth compared to Q1 2012.

The major revenue contribution is from Advertising and other category (90%). Also the growth rate is high in non-us region (53%).

The employee count has increased from 33k last year to 55k. The increase is due to the motorola acquisition. 23k  employees were moved under Google from Motorola. 1000 employees were recruited by Google directly in Q2 2012 alone.

The Cost-Per-Click has gone down by 16% in Q2 2012 compared to Q1 2012. But this has gone up by 1% compared to Q1 2012.

The growth differentiator is the revenue from Motorola. Otherwise the revenue growth is same trend of previous quarters. The standalone growth is 21%.

Google registers consistent increase in revenue from non-US region. The Europe region growth was limited due to the economic turmoil in Countries like Spain, Greece, Italy. UK had a growth of 20% y-o-y.

Why Companies are Acquiring Social Media Start-ups

Recent days, acquisition of social media start-ups by the public listed companies are increasing. This trend started early 2012.

Microsoft is acquiring the social media company "Yammer" that has tool for the easy collaboration among employees and increase the productivity.  This is one of the biggest acquisitions in social media start-ups. Microsoft pays around $1 billion as it is looking for a major change to come out of its stagnation.

Facebook acquires Instagram a photo sharing mobile app company for around $1 billion is cash and shares.

Salesforce.com acquires Buddy media a social marketing company that has facility to publish content, provide marketing Ads and measure the effectiveness of its marketing activities. This acquisition also involves major money i.e. around $700 millions.

Oracle has acquired Virtue a social marketing company for $300M. 

How are these social media acquisition helps the companies? Will it improve their business or this is also one kind of .com bubble?

Today, the social media sites are getting more users and very frequent visitors. After the gaming sites, these sites are getting more traction from all groups/ages. So users are familiar with the usage. By bringing in similar approach in the business apps and bringing in the collaboration as a part of the business applications, the productivity will be increased. Also the traditional marketing is not bringing enough business and conversion tracking is an issue, by moving to social media these difficulties are eliminated. 

Why do companies going for acquisition instead of using their services? Is it adding value to these companies?

As the CRM, Social Media and Marketing getting more traction, all the businesses wants social media marketing and monitoring the marketing activities. If the business applications like salesforce.com etc. integrates their services with the social marketing and monitoring tools, the value addition to their customers will increase and the growth of their customers will increase. This will be one more marketing value addition they can propose.

We have to wait and watch how this strategy works for these companies. 

Saravanan

Apple starts 2012 with big Q1 Growth

Apple announced financial results for its first quarter of the fiscal year 2012, ended December 31,2011. The company reported a record net profit of $13.06 billion, a major increase compared to last quarter’s profits of $6.62 billion, but a growth of 117.6% compared to profits of $6 billion, in the year-ago quarter.

The company’s quarterly revenue rose to $46.33 billion in the quarter, an increase of 73.26% compared to $26.74 billion that it reported in the same quarter, last year. International sales accounted for 58 percent of the quarter’s revenue.

The results include an additional 14th week that Apple added to the quarter

• iPhones:  37.04 million sold during the quarter, up 128% year on year. Previous quarter, Apple had sold 17.07 million iPhone
• iPads:  15.43 million  sold during the quarter, a 111% increase year on year. Last quarter, Apple had sold 11.12 million iPads.
• iPods:  15.4 million sold during the quarter, down 21% year on year. 6.62 million iPods were sold in the last quarter. - Macs: 5.2 million sold during the quarter, a 26% unit increase over the year-ago quarter. This is an improvement over the previous quarter, when Apple had sold 4.89 million Macs
• Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter.

The company CEO Tim Cook said, the revenue growth in India has gone up three times. 

Though some industry watchers had predicted that Amazon's Kindle Fire, which came out in November, would affect sales of the iPad, Apple executives said there had been no "obvious effect" of the device on sales of its own tablet.

 Some points on this quarter report

• Apple has paid $4 billion to the app developers. In the last quarter alone they paid $700 million to the developers.
• Apple Cloud service iCloud has 80 million customers
• The company has $97.6 billion in cash at end of December, compared to $81.6 billion at end of the last quarter, an increase in $16 billion.

Solarwinds' Acquicition Continues

Solarwinds continuing its strategy of acquiring and growing continues. In Dec 2011, they acquire DameWare Development for $40 M in cash.

This acquisitions makes them to add their product line to serve the system administrator to remotely manage their systems. They are able to succeed by acquisitions. This is one of the major strategies for Solarwinds and they are growing tremendously.

In future they will target the companies that has products in the following domain

1. Helpdesk / Service Desk
2. Customer Management Software
3. Project Management Software

One thing that surprise everyone is they have not yet entered into the Cloud market. May be that will be their main strategy for 2012!!!!!

Merchants with High Level Fraud Transaction

Doing credit card transaction in any website is a major challenge. The servers are to be secured and the applications are to be PCI compliant. Over and above we have to have proper fraud transaction checks.

If we miss a little, hackers will use the phished credit cards to do the transaction in our website. The card owner will not know that his credit card is compromised until he see his bill. Once he see that there were fraud transaction, he will go for charge back. This is where the merchant's head ache starts. He has to defend but there are limits in the number of fraud transactions.

Master card will allow max of 50 charge backs and Visa card will allow 100 transactions a month. if it crosses that then the % of fraud transaction will be checked by the Mater Card. If it exceeds 1% then the merchant will be entered into a watch list.

The Credit Card Associations of Visa and MasterCard maintain the Global Merchant Audit Program (GMAP) to monitor merchants processing an excessive number of fraudulent transactions. GMAP is a rolling six-month database that identifies merchants that for any one calendar month have:

• At least three fraudulent transactions.
• A cumulative total of at least $2,000 in fraudulent transactions.
• A minimum fraud-to-sales volume ratio of 1%.

Merchants identified under the GMAP program are divided into the following three tiers based on their fraud-to-sales volume ratio in any one month:

• Tier 1 – fraud-to-sales volume ratio minimum of 1% and not exceeding 3.99%.
• Tier 2 – fraud-to-sales volume ratio minimum of 4% and not exceeding 6.99%.
• Tier 3 – fraud-to-sales volume ratio of at least 7%.

If a merchant is identified in Tiers 1 or 2 more than one time in a 12-month period, it will be automatically escalates into the next higher tier. If a merchant is escalated into Tier 2, the processor is required to provide it with additional training on fraud control. If a merchant is escalated into Tier 3, the processor is required to decide whether to accept liability for fraud related chargebacks or to terminate the merchant account.

If a merchant is identified in any one of these tiers, it should expect certain actions from its processor. Some of these actions are required by Visa and MasterCard, for others the processor will follow its own policies.

• Tier 1 merchants. When a processor is notified that one of its merchants is placed into Tier 1, there is no requirement that the processor respond formally to the notice. A Tier 1 notice is provided for information only. The merchant should expect, however, that the processor will implement a fraud control program or enhance an existing one.
• Tier 2 merchants. When a processor is notified that one of its merchants is placed into Tier 2, it is required to conduct training on credit card acceptance and fraud control procedures at the merchant location. The Credit Card Associations (Visa and MasterCard) do not require processors to terminate the merchant account, although the processor can do it, if that is its policy. The more likely scenario is that the processor will implement a rigorous fraud control program.
• Tier 3 merchants. When a processor is notified that one of its merchants is placed into Tier 3, the Associations require that it must either terminate the merchant account or accept liability for chargebacks for all reported fraudulent transactions (except fraudulent application and account takeover fraud) during the applicable chargeback period. The chargeback period will be determined to be a minimum of six months or a maximum of 12 months. Most likely, the processor will terminate the merchant account.