SAAS Drives Business ConsultingBy Michael Vizard | Posted 2009-02-19 Email Print
Software as a service doesn't have the same readily apparent value-add opportunities as hardware and software sales. Success may just come from being an expert adviser on SAAS implementations.
When it comes to software as a service, there’s a lot of understandable fear and loathing in the channel.
After all, all too often it appears that the only way to make money reselling a SAAS offering is to act as an agent on behalf of the vendor that builds and maintains the application. Unfortunately, there’s not much compelling business value created when acting as an agent for another entity. So understandably, solution providers have been less than thrilled with the whole SAAS movement.
And yet, more than a few solution providers have found ways to make a viable business reselling SAAS offerings. The trick is that instead of focusing on selling the SAAS offering, more of their value-added effort is being poured into first configuring the application and then providing ongoing expertise around the business process that the SAAS offering automates.
Case in point is Nashco Consulting, which is evolving from being a traditional reseller to becoming a process expert around the delivery of IT support services. To that end, Nashco has partnered with Service-Now, a provider of a service desk application that is made available as a service. So rather than installing and configuring help desks on a customer’s premise, Nashco is consulting with customers on how to set up and optimize the Service-Now application.
Once that relationship is established, however, Nashco stays with the customer. The company has created a help desk service that augments the help desk personnel of its customers, effectively providing the customer with second tier of help desk support that provides expertise to the customer’s IT staff. Nashco has also created it own managed service offering around the Service-Now software and partnered with other providers of services such as Big Fix. The latter company provides a set of automated tools for managing client systems that Nashco uses as part of its support services.
What’s interesting is that Nashco has gone to some effort to work collaboratively with existing IT personnel within their customer’s organizations, rather than making a pitch to replace with as an outsourcing partner. The end result is a close working relationship with customer such as Lee Root, who is an IT division manager for Tulare County in California.
The core value proposition of Nashco surrounding a SAAS offering is that Nashco invested in becoming an expert in knowing everything associated with Service-Now. The simple fact of that matter is that most customers never get more than 10 percent of the value out of any application they buy. They also don’t have a lot of capital budget, so the fact that a SAAS offering is treated as an operational expense is attractive. The opportunity for solution providers to become subject matter experts that help customers get the real value out of their software investments.
In effect, it means that solution providers should be leveraging the initial sale to drive a richer consulting opportunity. The challenge is making sure that you have the right level of expertise on staff to support that consulting engagement and a sales force that can sell that capability. That’s not necessarily easy to do, but in a world where no one can live on product margins and revenue from technical services, business consulting services are really the only way forward.
Mike Vizard is senior vice president of market strategies and content services at Ziff Davis Enterprise and a regular contributor to Channel Insider.