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Arck

Systems
Sunny Kujur (PGP08126)
Tadepalli Sai Ravi Teja (PGP08127)
Varsha Sharma (PGP08129)
Vineeth Harikumar (PGP08130)
Vivek Arya (PGP08131)
Situation Analysis
Arck Systems was a medium-sized manufacturer of enterprise servers, which are powerful network
computers used in corporations to manage data

They developed UNIX-based OS with its servers, the software applications were developed by third
party software houses

Rob Chatterji, CEO of Arck, made a major strategic decision to grow Arck’s software business by
acquiring Lux Software Inc

Enterprise software market was growing more quickly than the hardware market

Software gross margins were more than double that of hardware


Situational Analysis (contd.. )
Lux Software was a leading provider of middleware which is software that acts as
an intermediary between software applications so that they can exchange data
Arck made an all-stock offer which valued the company at 50% above its market
capitalization value

The deal included a delayed bonus provision

Core members of Lux Software’s engineering staff were given large stock option
grants that vested if they stayed at the company for three years

After the merger the sales team was different for both the companies
Major Actors

Rob Chatterji: The Chairman and CEO of Arck

Bryan Mynor: EVP for Worldwide Sales of Arck Systems

Evan Hong: The CEO of Lux Software Inc.

Chris Snyder: Lux Software’s EVP of Sales

Sharon Esteves: The head of U.S. Sales of Lux Software Inc.


Options

Continue the current compensation plan which would keep the


employees motivated

Setting a limit of the discounts offered on sales

Keeping a cap on the compensation offered since that would lead to huge
discounts
Recommendation
Thank you

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