Several years ago we saw the writing on the wall for traditional photocopier dealers and completely re-invented ourselves - it was without doubt the best thing we have ever done in the company’s 16 year history - the question is, is it time to re-invent again?
There have been a lot of murmurings, opinions and in some cases rants banded around the SBSC and wider MS Partner community about what will and won’t happen with regard to S+S, SaaS, cloud computing and all the other fancy terms that get thought up to describe hosted services, and more to the point does that mean the end of SBSC partners who rely on selling traditional on-premise kit and support to end users, and if so, how soon?
Before we go any further, lets look at the average client supported by an SBSC partner in the UK. They may have 1 SBS 2003 server, 7 workstations and say 3 laptops. They are running a network version of Sage accounts Line 50 for invoicing and producing sales and purchase orders. They may have 5 licences for AutoCAD LT to produce drawings, a mix of Office 2003/2007 on most machines and a bespoke access database which was written by a small software house who have now gone bust, and the client doesn’t have access to any of the source code etc. Their Internet connection is limited to 2Mb ADSL as they are a long way from the BT exchange and the exchange is not SDSL enabled and is not yet ADSL2+ ready.
Now, let’s imagine what happens when we say to this customer they should switch to SaaS, I think you can probably see where this is going! You manage to convince Mr. Client that it would make a lot of sense to rent licences for MS Office as and when he needs them. Need to downsize? No problem, just rent less licences. Business picking up and you take on a Marketing lady? Just rent a Publisher licence. Now try that with Sage, or AutoCAD LT. Try calling Sage and asking them how their licensing model for hosted services works. It’s even worse for AutoCAD, not that AutoCAD is going to work in any kind of hosted TS environment anyway, and even if it did you wouldn’t get any support on it. That’s before you have to inform the client that their Internet connection is so slow and flaky that the only real alternative at this point is a 2Mb leased line which is going to cost around £5-6,000 setup and £500-800 per month!
So, is it time to re-invent? Well here’s the other side of the story. I know for a fact we lost 2 deals recently because the client ended up going for a hosted solution. I also had an email from an existing client who wrote the following:
Free software (like Google Apps and Open Office) is going to be very bad news for Microsoft.
In future, we may not need to pay the astronomical sums necessary to buy several Microsoft Office licences from you.
Thank you for your insight Mr. Client. I haven’t spoken to you in 12 months but you see fit to send me an email suggesting that my business model is going to go down the pan anytime soon as you are going to be able to get what you need for free. Your thought process is as flawed as your own business model judging by the infrequency you pay your monthly contract charges - but I digress.
Let’s cut to the chase. There are large corporates out in IT land that have realised they can make money from hosting applications, services etc. These companies have stolen a march on Microsoft and Microsoft are now playing catch-up. Hopefully in their rush for world domination Microsoft will spare a thought for their partners that don’t quite fit the new evolving partner model and won’t steam roller over them too quickly - but I doubt it. The point is only the quickest and fittest will survive, so start thinking about all this will effect you now.
So will we be re-inventing ourselves? Sort of. I see the change to SaaS, S+S or whatever you want to term it as an evolution rather than revolution. It isn’t going to happen overnight but we can be sure it WILL happen. Where will we start? By building on what we already do and adding services such as Sharepoint development, CRM consulting and hosted Exchange. Some of these will generate more revenue and bottom line than others, but together they will ultimately add up to more than we currently generate from selling bits of tin.
I don’t see our customer base disappearing into the sunset cloud just yet, but I can see that some of them are already asking what it is and what it can do for them - it’s only a matter of time.
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