Survive and Recover: Why You Need to Expand Your Offering

The numbers are in: consumers are saving more than they're spending, and that spells trouble for businesses. This means the recovery will likely to be slow because businesses will continue to be cautious on IT spending due to consumer cut backs.

Unlike the March period, when no customer segment was spared, SMB and public sectors improved somewhat while large accounts continued to deteriorate,

according to the latest report from Raymond James.

However, instead of focusing on the bad news, service provider should take into consideration that small businesses will continue to embrace the hosted service model, or the "cloud." The days of large capital expenses (CAPEX) are gone and the new way of doing business is the monthly pay-as-you-go (OPEX) SaaS model.

If you're a VAR or a MSP, ask yourself this: How are you staying competitive with enhanced services or new product offerings? What are you doing to lower the cost of your customers' IT costs?

Contact us if you're interested to learn more about our Total Outsource Solution or our private label hosted services will help you expand your offering.

Gartner and Forrester: 2009 IT Spending will Decline

U.S. jobless claims surged to a 26-1/2-year high last week, delivering yet another bad news to the economic downturn. Many experts believe that economy will get worse before it gets better.

"Market research firms Gartner and Forrester have both revised their IT spending forecasts for 2009 and now say IT spending will decline this year due to a deeper-than-expected recession. Gartner says the drop will be deeper than after the dot-com bust." according to Channel Insider.

The credit crunch has impacted IT capital purchases very hard and the only area Forrester projects as set for growth is outsourcing.

"Forrester’s forecast calls for computers and peripheral equipment sales to decline by 6.7 percent in 2009, communications equipment sales to fall by 7.7 percent, software sales to fall by 0.4 percent, IT consulting services sales to fall by 1.9 percent and IT outsourcing sales to grow by 2.1 percent in 2009"

Many technology providers have already experienced the decline in business for a while now and the forecast simply confirms the fact that businesses are not willing to spend the big capital investments (CAPEX is dead!) and is looking to cut IT budgets with the combination of moving to lower-cost alternatives, extending the lifecycle of existing products and laying off inefficient resources.

When economy is bad there is a rush to quality, a shift in spending and a higher expectation to do more with less. This is why technology providers must deliver a competitive offering to retain existing customers and to find new business opportunities utilizing the outsourcing IT model. From Pay-as-you-go hosted services to the all-inclusive per user/per month Total Outsourced Solution, Pointivity has been delivering the OPEX IT subscription model for years and we have the go-to-market strategies for our partners to deliver the same successful solution.

Do you have the right strategies to navigate through this perfect storm? Can you deliver more value than your competitors? Contact Pointivity to learn more on how we can help.

Link to Gartner Press Release.
Link to Forrester report.

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.

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.

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.