To have a complete understanding of the opportunities and challenges the cloud era poses for resellers, MSPs and the Channel in general, it makes sense to study multiple concurrent forces at play in the IT landscape which are driving change. Moreover, this whitepaper highlights the Channel opportunities in the specific area of cloud based messaging and collaboration software. It seeks to answer the key questions of – What is the role of the Channel in the cloud era? Why cloud messaging and collaboration? Why now?
| 1. IT Market Trends|
Multiple forces of change are underway in the IT Market, profoundly impacting all players, including customers, vendors and the Channel.
Software will never be the same
The closing years of the first decade of the 21st century have seen a sea change in how companies approach, procure and manage business software. Traditional on-premise and server based software, known to be complex and expensive, has started to lose favor in the face of recessionary pressures. Accessing IT infrastructure, software, and data remotely over the web is now a requirement in modern business environments, which increasingly demands flexibility and working in a wider network of customers, suppliers, vendors, partners and regulators. “Disruptive”, “Techtonic shift”, “fundamental structural shift” are some of the phrases being used to describe this phenomena.
After gathering momentum over the last 5 years, the “cloud” and “software-as-a-service” are now more than mere buzzwords, witnessing massive adoption from all sectors of the economy, particularly the small and medium business segment. In a recent report, IDC predicts that over 2010-2014, SaaS will grow six times faster than traditional packaged software, reaching over $40 billion in revenues by 2014.
SMBs Dig SaaS
Of all segments, SMBs have been impacted the most profoundly by software -as-a-service. SaaS fundamentally changes the “rules of the game” where SMBs now have access to the same expensive technologies as enterprises, without owning them, but simply paying for them according to use. This is similar to leasing a home, as opposed to being the owner. It is for these benefits of cost savings, flexibility and minimal lock in that SMBs have been most attracted to SaaS. And it is in no small measure due to the adoption and rigorous testing by small and medium sized businesses that SaaS has gone mainstream today across all sectors.
A recent study by AMI Partners found that 12% of small businesses and 24% of medium businesses are already using SaaS. Going forward over half of US SMBs are looking at SaaS as a potential solution. AMI expects the global SMB cloud-related spending to climb to a whopping $94 billion by 2014. Another study by Sandhill found that SMBs are twice as likely as large enterprises to move their core business-critical services to the cloud. SaaS has been called a “no-brainer” for SMBs not least for the substantial cost savings. The reasons are: -
1) Cost. Arguably on the wane now, the recession has exerted tremendous pressure on SMBs to cut corners. This, along with the overall promise of cost savings, both in the short and long term, has been the main driver of SaaS adoption amongst SMBs. SaaS eliminates the ownership costs of hardware, software licenses and implementation, instead renting out software as a “service” over the internet. Sandhill found that over a 5-7 year time horizon, SaaS often turns out to be cheaper by 25-50% than on premise software.
2. Time to Value. Typically, a SaaS solution up and running in a matter of days or weeks, rather than months, as with traditional on-premise software. As a consequence, SMBs can begin to realize the business benefits of the software solution earlier, which means the ROI is significantly better than on-premise software.
Growth and convergence of communication and collaboration
Messaging/Email is universal across industries and sectors, a bare minimum technological requirement, and one of the first to be implemented in almost any organization. This popularity is the reason that it was one of the first areas to gain credence as a cloud based solution. There is a groundswell of SMB customers who are unhappy with the cost and effort of supporting on premise email servers like Microsoft Exchange in their organizations. Since it is a commoditized application, requiring little customization, and hosted email offers significant cost savings, email is ideal for delivery over the cloud.
In contrast to communication, which allows people to transmit information, collaboration technology is a set of tools which allows people to work together on information. Some examples of these tools are document management, project management, workspaces, or wikis. It is no surprise that collaboration is another SaaS application area witnessing great growth, since the economy is increasingly information driven, and every company has to work in a wider network of distributed employees, customers, partners, vendors, and suppliers.
SMB Pain Points
Against the backdrop of the larger trends afoot in the IT market, vendors will need to deal with a number of universal SMB business needs at the operational level. These are needs workers face on a day to day basis, working in their network of colleagues, bosses, clients and partners. These are often the difference between performing ones job productively or not, or meeting a deadline and clinching a deal. And these themes are common across industries. It is in successfully dealing with one or more of these issues that vendors will find success. These universal needs are as follows:-
Document Sharing. Working together on documents is at the heart of what most knowledge workers do during their workday. With collaborators increasingly situated in remote office locations, separate countries, at home or on the road, or consisting of customers, partners and vendors in addition to colleagues; companies need a system to organize and secure company documents, and enable the collaboration process.
Calendar Sharing. Knowledge workers need the ability to organize packed schedules, and keep on top of important appointments. They also need to coordinate and share schedules with colleagues, bosses, clients and partners spread across geographies and time zones.
What does it all mean for you - the VAR and MSP?
The channel has always been an essential cog in the IT eco-system that puts products and solutions in the hands of the customers. The emergence of SaaS and the Cloud has lead to fears amongst the Channel of being cut out in face of decreased relevance of traditional channel roles and revenue streams such as system installation, integration, customization and maintenance. This besides losing their percentage on licenses for physical distribution, which disappears altogether.
| ||Customers want channel partners to carry forward their earlier roles in the era of SaaS to minimize their risk. It is for this reason that many SaaS vendors have incorporated a channel strategy. For example, Google recently launched its Google Marketplace, and Microsoft’s major thrust for Microsoft BPOS has been through its partner network.|
Business benefits of SaaS for VARs and MSPs
As SaaS crossed its tipping point in 2009, channel partners will find that reselling SaaS makes sense from a strategic standpoint. End customer demand for SaaS is sizeable, and as SaaS is increasingly sold through the Channel, channel partners would want to be on the leading edge of this wave, and develop new competencies. Apart from this, there are a range of incentives for SaaS channel partners as follows:-
From break-fix to strategic services. Packaged software typically requires a lot of menial maintenance effort involving numerous onsite visits. Since SaaS solutions require no on-premise setup, customers are largely self-reliant after the first month.
The Options. 8 reasons HyperOffice is the right choice.
Once you have decided to take the SaaS communication and collaboration plunge, the next decision is the product to place your bets on to maximize your revenue and your customer’s ROI.
The criteria are:-
Based on the above criteria, we have created a comparison of Google Apps, and Microsoft Office 365 (or BPOS), two of the most prominent solutions in the integrated cloud communication and collaboration market, with HyperOffice.
3. White Labeling. When you invest in marketing, and bring new customers to Google or Microsoft, you build their brand rather than your own, since they don’t allow white labeling.
4. Me-too or Differentiation? Google Apps has over 2000 partners for Google Apps, while Microsoft Office 365/BPOS has over 7000. When potentially thousands of resellers are presenting solutions from the same vendors, and those vendors set the price point, how do you differentiate yourself?
5. Greater Margins. With HyperOffice, you can earn up to $65 per user per year, or 55% over the base price. Google Apps and Microsoft Office 365/BPOS offer you only 10% and 12% (6% after first year) respectively.
7. Marketing and Sales Support. Leverage the marketing and sales expertise we have gained over 10 years. Use our marketing resources, whitepapers, presentations, email templates, videos and more.
Talking hard numbers. How you make money.
HyperOffice offers you a number possible revenue generation streams from licensing, value added services, and cross-sell and up-sell opportunities. Specifically, you can earn from the following:-
3. Training and Support. HyperOffice Partners can offer paid training to their customers, as well as offer enhanced customer service and help desk services.
5. Customization. HyperOffice offers a range of customization options so that end users can mould it into their business environment – intranet publisher, web forms builder, custom database applications and so on.
6. Integration. HyperOffice offers you the ability to integrate with third party solutions. You may charge your clients for integration with legacy systems or third party SaaS applications, or create and sell integrated bundles of different SaaS solutions.