webMethods, Inc.: Global Sales Strategy

CEO Phillip Merrick was proud of webMethods’ success in growing its international business. International revenues comprised 27 percent of total revenues in 2001, compared to a standing start in November 1999, when webMethods opened its first office in Europe. Now the company had operations in 27 countries, and had successfully integrated its acquisition of Active Software, another integration software vendor with a significant international presence. However, in 2001 webMethods faced a global economic slowdown and a weak software market with lengthening sales cycles. In July, the company was forced to lay off 15 percent of its workforce and to lower earnings expectations for F1Q 2002 (June). The downturn had impacted the entire industry, and several of its competitors had already exited certain foreign markets completely. Merrick and his team needed to create a sales and marketing plan to succeed in this difficult market environment. How could webMethods leverage its relationships with key technology and services partners? What was the right balance of direct and indirect sales? Ultimately, the team needed to determine where and how webMethods should deploy its marketing resources in 2002.