SAAS Drives Business Consulting

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.