Business model of Opera Software

Customer Segments

Opera provides a range of software products in the form of mobile and desktop browsers, and applications, primarily to the general consumer population. The Company serves a range of consumer demographics through its browsers, with its apps catering to consumers that value privacy and anonymity when browsing the internet.

It additionally serves users of connected TVs with its television streaming service, which it integrates into the products of its original equipment manufacturer customers. Opera additionally provides a range of cloud-based mobile services and digital advertising solutions to telecommunications operators, publishers and advertisers.

Opera controls only a small portion of the mobile and desktop browser markets, with larger, more developed markets favouring more established browsers such as Google Chrome. Opera, however, is more lightweight and offers a turbo feature, which makes it popular choice among consumers who have limited storage space on their devices, limited data availability, or slow connections.

Opera’s software products are available to consumers around the world, with the Company serving customers across the Americas, Asia Pacific, Europe, and Africa. Due to its small size and turbo features it is particularly popular in emerging and lower income markets where internet speeds are slower and consumers are less able to afford expensive devices.

Value Propositions

Opera provides value to its customers in the following ways:

• Its reputation and brand name, with the Company established as a reliable provider of software products and services, with the Company controlling a small portion of the global web browser market but remaining a popular choice in many international markets;
• The security and functionality of its products, with the Company’s products offering a range of features and functionality – including private browsing, power saver modes, turbo modes, and a range of extensions – all supported by security features;
• The accessibility and ease of use of its products, with customers able to download the Company’s products directly from its website free of charge, with the products themselves requiring no expertise or technical experience to use effectively;
• Its proprietary technologies, with the Company utilising a range of proprietary technologies and intellectual properties in the development and implementation of its various software products, enabling it to provide unique service offerings; and
• Its technical expertise and experience, with the Company employing specialist technical personnel across its enterprise, as well as an experienced team of executives, enabling it to provide ongoing technical support;

Channels

Opera operates a website at www.opera.com, through which it provides information on its various consumer-focused products. Customers are able to download the Company software products directly through the Company’s website free of charge, following which they are able to access the full functionality of these product on their relevant devices.

Opera separately operates a website for its business to business operations at www.operasoftware.com, through which it details its commercial activities. The Company sells its business to business services through a dedicated in-house sales force, which deals directly with clients and is organised by product and service line.

The Company’s sales personnel operate out of its head office in Norway, as well as out if its network of 11 satellite offices across Sweden, Russia, the US, Poland, China, South Korea, Taiwan, Ukraine, Japan, Iceland, and Singapore. The Company operates an online mobile advertising and marketing platform named Opera MediaWorks (now branded as AdColony), through which its advertising solutions are managed.

Additionally, Opera serves customers through third party electronics manufacturers, with its TV streaming platform integrated into a range of connected televisions and devices produced by partners such as Sony, Samsung, Tivo, and Hisense.

Customer Relationships

Opera provides a range of products to consumers on a self-service basis, including its desktop and mobile browsers and privacy apps. Customers are able to download these products via the Company’s website without interacting directly with sales personnel. Customers can also access Opera’s TV streaming service on a self-service basis via a range of connected devices.

Opera makes its business to business sales via a dedicated direct sales force. The Company’s sales personnel consult directly with clients in order to establish the needs and circumstances of each individual client, seeking to provide tailored solutions where possible. Advertising and marketing customers are able to manage their mobile advertising operations through the Company’s mobile marketing platform.

Opera provides ongoing support to its consumer and commercial customers, with the Company hosting a Help and Support portal which can be access via both its consumer and business to business websites. This portal includes a range of online resources, such as tutorials, user guides, FAQs, and documentation that can be accessed independently. Alternatively, customers can contact the Company across its office network by post of over the phone.

Additionally, Opera operates a user forum, through which customers can discuss the Company’s products, share ideas, and collaborate on problems. Customers can also follow Opera’s activities and interact with the Company directly through its social media accounts, including with Facebook, Twitter, YouTube, LinkedIn, and Instagram.

Key Activities

Opera is a Norwegian software developer and provider of internet services. The Company notably develops and sells a range of mobile and desktop internet browser applications, as well as privacy and data management tools.

It also provides cloud-based mobile services and solutions to operators, publishers and advertisers, primarily through its Opera MediaWorks platform, which is branded as AdColony, and mobile advertising network AdVine. Opera offers products to consumers worldwide, controlling a small share of the global web browser market with its flagship Opera Browser.

The Company’s software products are particularly popular in emerging markets and among users with limited data allowance and storage space.

Key Partners

Opera works closely with a network of partners, cultivating relationships with a range of service providers in order to effectively serve its clients. These partnerships can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of services, equipment, and technologies that are utilised in the development and distribution of the Company’s various products and services;
• Software and Technology Partners, comprising a range of software developers, technology companies, and systems integrators that assist in developing and marinating the Company’s platforms and products and develop and integrate third-party applications at can be made available via the Opera app marketplace;
• Channel and Distribution Partners, comprising a range of distributors, sales agents, and resellers who assist in extending the Company’s own sales and marketing reach, as well as various electronics manufacturers that integrate the Company’s Opera TV functionality into their connected products; and
• Strategic and Alliance Partners, comprising a range of well-placed industry partners that collaborate with the Company in various projects, including branding, marketing, and other projects.

Opera has launched a number of partnerships in recent years. This includes a partnership with MTN and Naij to provide free internet access to consumers in Nigeria, a distribution partnership with Telenor Digital, and a partnership with Gameloft to distribute mobile games to consumers in emerging markets.

Key Resources

Opera’s key resources are its technologies and intellectual properties, its online platforms and software products, its IT and communications infrastructure, its sales and distribution networks, its partnerships, and its personnel.

Opera utilises a range of proprietary technologies in the development of its products and solutions. Searches of records published by the US Patent and Trademark Office identified several patent applications filed in the name of Opera, including applications entitled ‘Web access performance enhancement’, ‘Method and apparatus for adjusting the brightness of a display and a display system’ and ‘Real-time network monitoring and subscriber identification with an on-demand appliance’.

Opera additionally owns and or leases a number of physical properties around the world, namely its head office in Norway and its network of satellite offices across the US, Europe, and Asia.

Cost Structure

Opera incurs costs in relation to the development of its products and technologies, the maintenance of its IT and communications infrastructure, the procurement of services, the sharing of revenue, the implementation of advertising and marketing campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 Opera recorded total operating costs in the amount of $570.9 million, including publisher and revenue share costs totalling $248 million, payroll and related expenses totalling $155.8 million, and other operating expenses totalling $104.1 million.

Revenue Streams

Opera generates revenue through the development and sale of software products and the provision of various mobile advertising and original equipment manufacturer solutions. The Company principally derives revenue under service contracts agreed with its commercial clients, and to a lesser extent through the commercial licensing of its technologies.

In 2015 Opera generated total revenue for the year in the amount of $615.9 million, up considerably on the $480.8 million recorded by the Company in 2014. The bulk of this revenue, around 68%, was derived from the Company’s mobile advertising clients. The Company generated around 21% of its revenue from its consumer-focused properties and 11% form technology licensing activities.