Release cycle

Software is developed and tested, after which a release to manufacturing (RTM) version is produced. This version is sent to Digital Stream for production. Two versions of software are created—media and download.

Media versions

Media versions are sent to the Software Program distribution centre where they are placed into the finished goods inventory. Software Program performs all sales and distribution of media from inventory and either invoices the customers directly or accepts credit card payments. Media sales revenue represents 15 percent of sales.

Download versions

Digital Stream maintains the download version on its web site. Customers may buy a copy and download it. As these are credit card transactions, Digital Stream will process the payments, obtain the remittance from the credit card processor, and remit sales figures and payments to Software Program on a monthly basis. Download sales revenue represents 10 percent of sales.

Site Licenses

Software Program sells site licences to its customers using in-house, direct-sales staff. R&D has developed a complex licencing mechanism to ensure that site licence customers do not exceed their licences. Site licence revenue represents 40 percent of sales.

Support

Software Program provides support either as a fee-per-incident or via support contracts.

• Per-incident support is infrequent and not material.
• Support contracts can be for one, two or three years and include future upgrades. Support contract revenue represents 35 percent of sales.