Tuesday, January 27, 2009

Aggressive SaaS deployments in 2009

According to IDC SaaS will grow by more than 40 percent in the current year.

Hardware and software will continue its commodization spiral which will lead to service commodization. The idea is not becoming the low price leader but to be perceived as value for money moving forward in this economy. Today companies are looking closely are the values of their internal staff, aligning current costs with business goals, and evaluating risk ownership. More organizations are willing to evaluate SaaS as an alternative to reduce overall cost via opex versus the traditional capex. As quoted by IDC "right-sized, zero-CAPEX alternatives to on-premise applications."

According to IDC, by the end of 2009, 76% of US organizations will use at least one SaaS-delivered application for business use revised from previous SaaS growth projection which has 73% in 2010 (see below).

All the data points to our partner program approach to SaaS enablement allowing partners to reduce barrier to offer more products, insulate from ongoing changes in IT and position for rapid growth during this economy.

Thursday, January 22, 2009

Brand Power: Apple Blowout Quarter Microsoft Earning Plunges

Following yesterday's blowout quarter by Apple, Microsoft announced 5,000 job cuts and decreased earnings today (by 11%). It came in no surprise that EVERYONE should be doing bad; as a matter of fact, high-end brands were expected to be obliterated in this recession but Apple was able to beat expectations delivering blowout numbers.

Last year analysts were skeptical about Apple not having a low-end notebook or even a reduced MacBook while competitors were rushing out with netbooks to target the low end of the market.

Building a brand like Apple is not about volume but intimacy with the customers, a highly targeted relationship with the customer to create brand appeal. Knowing your market and meeting customer demand is where it all starts, the same solution can be sold very differently if you position it properly. Much like how automobile industry positions their brand: Toyota can sell the same Camry for 40-50% more with Lexus badges on it simply because they knew and targeted two different types of buyers.

Microsoft on the other spectrum went for volume (surprise?) and low intimacy thus its revenue and profit rely on mass market adoption. In this model profit margins erode rapidly over time thus new/updated product must be introduced. This is where Microsoft is having issues with their low margin Windows XP being the ideal OS on all the little netbooks (accounted for a majority of the increase in overall mobile PC shipments to U.S. retailers in December, according to the NPD Group. The number of laptops shipped rose 23% to 1.9 million units, with 14% of that growth attributable to mini-notebooks ). Windows Vista is not suitable for netbooks since it needs much more powerful hardware to support it.

The take away? Become the premium brand to your customer regardless of where your market focus is and build strong relationships that create stickiness with your offerings. At the end of the day you're not the only solution provider in town, be creative and maximize the tools and resources (private label) around you.

Monday, January 19, 2009

Tightened budgets making SaaS attractive

Today we honor the birthday of the Rev. Martin Luther King, Jr., and tomorrow we have President Obama moving from the on deck circle to the home plate. However; we couldn't stop more bad news from the banks. Royal Bank of Scotland bites the dust on a massive 28 billion pounds ($41.3 billion) loss, which would be the biggest loss ever reported by a British company, ouch!

So if banks don't and won't lend, business that used to depend on it will have to employ operation cash preservation - CapEx to OpEx mode. While enterprise software vendors are pushing for SaaS contracts, it can benefit the small-mid size VARs, MSPs, and solution providers.

By doing the math correctly on licensing, services and hosting; solution providers can market a value package that makes their customer feel like they're receiving huge discounts. And because of current economic conditions, more businesses are willing to give SaaS a try, employing pilot programs to seek proof of concepts. Pre-sale SaaS trials are good for traditional customers that had no experience with SaaS and if the user experience is great and the price is right why wouldn't they continue?

This is why we developed our partner program around SaaS enablement for partners, reducing hardware and software risks to the minimal while allowing the focus to shift towards business, marketing (brand) and sales. We can't control the shift in technology but we can implement control in our business and that's where the focus should be to deliver IT smarter.

Thursday, January 15, 2009

The Empire Strikes Back: Reselling Google Apps

Another vendor has entered the channel with promises and optimism, this time its the search king Google. Yesterday Google introduced their new Reseller Program focus solely on gApps Premier Edition (email, chat, word, spreadsheets, presentations, and security). Until now Google only cooked up the menu to resell Google enterprise search appliances, Apps and Maps to enterprise customers. Key word 'Enterprise' partner program.

And now Google is ready to grow their channel during this economy knowing Microsoft is consolidating with web-based Office Web Applications not ready until 2010.

Google and Microsoft solutions can actually coexist depending on each customer on a case-by-base basis since Google has a slightly different approach to their channel. Solution providers or VARs may even combine the two but ultimately Google App is more appropriate as a cloud-based solution at lower cost than say an on-premises solution from Microsoft. Microsoft is restructuring its channel while Google has just begun, the perfect storm's thunder and lighting.

I am not surprise that Google doesn't having a deal registration because they spend years building their brand and offer free tools directly to customers. So the customers are already trained and used to their brand while Microsoft spend trillions creating products to build a service around their brand.

VARs and solution providers should focus on the business drivers: Continue to foster your relationship with your customers, look for ways to add value to their business, strengthen your brand, and deliver flexible solution (SaaS) that you can build your business on for the long haul. That translates to high customer retention, brand recognition and recurring revenue with real margins!

Monday, January 12, 2009

Margins + Branding + Process Automation = Pointivity's Partner Program

Over the past few weeks I wrote about the changes in the industry and the shifts in perception from IT consultants, vendors to solutions providers. It is easy to see why we've designed the partner program to focus on developing the the weaker areas for VARs: branding, margins, process automation, and product offerings. Here is the value proposition for our program:

Leveraging Pointivity's superior private label hosted services (with storefront!) allows VARs to offer a wide range of products without having to pay for hardware, software, licensing and maintenance.

One of the fastest way to start is to expand your offering to your customers providing a complete set of services such as hosted Microsoft Exchange, SharePoint, Dynamics, and wireless emails to earn additional business process outsourcing revenue.

Majority of the businesses needs emails and offering enterprise email solutions such Microsoft Exchange and Blackberry services creates added value from a cost saving(CapEx to OpEx) and infrastructure management perspective(overhead and risks). If you are able to offer the basic IT needs to your customer, it will create future opportunities for additional services while lifting you towards the trusted advisor role. We're working on additional services such as email archiving or efax to complete the email offering.

Our program includes “on-demand” provisioning automation, ecommerce engine (online store), integrated billing (payment gateway options), and feature-rich control panel for administration and private label control panel for end-users.

Your own private label online store allows your customers to sign up (self-service checkout) then the system automatically provisions and deploy the services immediately. It is all about streamlining your business process while providing a branded solution. As the store grows we will be adding more business essential applications such as accounting, CRM or even dedicated servers to strengthen your hosted services offering.

In addition, the solutions is being offered on a wholesale pay-as-you-sell basis allowing your own pricing structure to adjust to the way you sell. You can sell them in packages or include it in your other solutions such as managed services, backup/disaster recovery or even application hosting depending on how you bundle and deliver them.

The more hosted services you offer the higher chance of customer retention because you’re able to provide a wider range of products while aligning both you and your customer’s overhead to revenue via SaaS. Creating value for your customers is the key for high customer retention and it can be done easily with our partner program.

Thursday, January 8, 2009

2009 MSP Watch

An interesting article from MSPmentor with regards to Dell aggressively pushing their managed services.

Joe made some excellent points on the fact that Dell is focused on the mid-market while small MSPs gets the SMB space. There is also the argument that MSPs will do a better job servicing their clients vs big guys like Dell which allows a separation in market share.

It will be interesting to see what MSPs will do once Dell gains more ground as momentum shifts to À la carte service at very competitive prices. Hardware and software will continue its commoditizing path to serve the SaaS model, aggressive direct sales will be the focus as time passes. You can't piss off everyone in one go, but you can break them down so only the strong survives.