Own More of the Solution Than You Can AffordBy John Hazard | Posted 2006-01-24 Email Print
How one CRM VAR is helping customers apply solutions to the specific business needs on a subscription basis.
As the managed services world is still defining itself, Green Beacon Solutions is redefining its corner of it.
Green Beacon, a 4-year-old CRM (customer relationship management) solution provider, is rolling out an offeringPAMS (Professional Application Management Services)that is neither a solution delivery nor MSP (managed services provider) contract.
Part consultation, part monitoring, part implementation, PAMS, which Green Beacon expects to launch in April, is designed to help customers apply the solution to the business purpose for which it was purchased, and its creators expect it to multiply the value of CRM for countless midsize customers with limited IT resources.
"How many customers can afford to buy a solution but can't afford to own it?" said Ben Holtz, president and CEO of Green Beacon. "They have bought the box solution, but they don't have the $85,000 a year to keep an Onyx Software administrator on staff, who would be able to let them use it the way they would have hoped. When you need to change a field, you need to tweak a business rule in the program, you need to investigate a bugoften these things just stay that way."
PAMS essentially provides subscription access to an administrator who can perform those tasks on an incident basis.
Unlike service contracts and MSP offerings, PAMS does not support a company's infrastructure, monitor system performance or back up a customer's data. The service would require some monitoring of systems and applications that support CRM, such as SQL Server, "but we're not replacing your IT department," Holtz said.
For a subscription (Green Beacon expects to charge between $6,000 to $10,000 per month), users receive a limited number of incidents (up to 16 hours of work), which would include any one of about 40 defined projects, from adding fields to the screen to reindexing the database.
Green Beacon's initial PAMS offering will be limited to Onyx customers, its largest base, but the company is building a solution around Microsoft CRM users, its second largest set of customers, and expects to add solutions for Axapta and Epicor users, Holtz said.
While adding value to the customer's solution, PAMS also increases the solution provider's profile, Holtz said.
"The problem with a lot of application service provider [ASP] contracts is that you are just supporting keeping it running," he said. "They come to you at the end of the year and say, 'We spent $200,000 with you this year and what did we do?' With the PAMS model, you know what you did because 'We did this project with you and it resulted in this. And this project and this project.' It makes your value more visible."
From the vendor's perspective the service model adds tremendous value to the product, said Alex Dinu, Onyx's vice president of alliances.
For Onyx, it also gives the CRM vendor a leg up on hosted solutions, especially Salesforce.com, that have made gains in market share by offering CRM users hosted support on an economy of scale.
"The idea of having someone responsive to tune your application, and isn't one size fits all, makes the product so much more applicable to what they need," Dinu said. "This offers responsive service that isn't one size fits all. Most of the ASP models out there are not customizable beyond changing some fields or titles. This is truly customizable to meet your solution needs and you're still sharing those costs."
The offering will make applications such as Onyx more appealing to midsize customers who have outgrown ASPs, but can't afford to own the solution to its fullest, he said.
Customers worried about security or compliance would be attracted by the notion that the data never leaves the company's ownership, Dinu said.