These comments are supposed to draw a comparison between today’s software as a service (SaaS) market and another, extinct software delivery model with some important similarities and differences. The purpose of that comparison is to provide insight into the modern SaaS market, while summarizing the history of an important era of computing.
By Andrew Alegria
As published March 11, 2013 in CRN
As an increasing number of VARs add SaaS offerings to their portfolio, those without cloud services will find it increasingly hard to compete for customers – and to maintain profitability without the margin-rich reoccurring revenue streams that SaaS services provide.
In North America, there are ~100k providers that provide IT services. Of this total number, most are hardware VAR/Resellers, and 15-20k would be considered Managed Service Providers. The largest growth opportunity for hardware resellers is with those who can provide their customers with a full portfolio of hardware and managed/SaaS services. There are many reasons the market opportunity here is massive for those who offer both hardware and managed services:
A thicker managed services portfolio lessens the opportunity for a competitive VAR to provide a unique service.
- It helps the hardware reseller stay relevant to their customers.
- It provides the opportunity to grow their business by providing everything a customer needs on one bill.
- Adding SaaS services may serve as a disruptive advantage to gain access to new accounts.
- Since SaaS services are ‘sticky,’ it will help the services provider to maintain a long and profitable relationship with the customer.
And Then There’s the Money
If the above reasons for offering SaaS services are not compelling enough, think of the opportunity for those services to provide reoccurring revenue. As the article “The VAR’s Path to Managed Services” illustrates, recurring revenue grows over time with greater profit margin than hardware sales. The result, as shown in this example, can easily be more than $700,000.
Channel experts agree that providing customers with more options through monthly services is a key to future success. New technologies, with scalable options for monthly service costs, are appealing to customers. The remaining challenge is in planning a strategy that will take a VAR business owner from today’s hardware-centric business into tomorrow’s SaaS business. Planning advice is offered in the blog “How to Get Your Business in the Cloud.”
The Cloud Growth Path for Distributors
Hardware distributors also see an opportunity for growing SaaS revenue. They have a huge base of partners who purchase hardware. Why not offer a complete services portfolio to these partner bases and help them develop a SaaS business? Tech Data (TD Cloud), Ingram Micro (IM Cloud Services) and Synnex (CloudSolv) are all helping channel partners shift their businesses by adding SaaS services. They provide a complete hardware portfolio, plus a growing SaaS portfolio to become a one-stop shop for VARs who want to sell both. These distributors also offer resources to grow a managed services business, including training, thought leadership webinars and events, and feedback from peer resellers/MSPs to help the VAR/MSP grow their services business.
Managed services continue to evolve. The move into SaaS services is a huge step, but a necessary one to thrive in a future where customers needs and wants change. VARs and distributors who plant the seeds of a services business now will have an easier time offering the next generation of services as well.
Andrew Alegria is senior manager of strategic relationships for Axcient.
By Eric Quach
When you work for a rapid-growth technology company, you’re living in a fast-paced working world. As more people see value in your product, and for the industry itself, demand rises. It becomes even more critical to deliver top-tier products. It is imperative to challenge yourself to broaden and hone your skill-set in order to keep up with these high standards.
This blog was originally published on The VAR Guy on Sept. 12, 2012
If you think you can afford downtime, ask the small-business owners who faced Hurricane Isaac in the U.S. Southeast. Many of them had to close their doors as the Category 1 hurricane left more than 900,000 people and businesses without power for more than a week across Alabama, Florida, Louisiana and Mississippi. Last year, natural disasters caused nearly $24 million in damages in the U.S. alone, according to a 2011 report by the National Weather Service.
Today we are constantly bombarded with information. It’s literally at our fingertips with smartphones, tablets, e-readers, and laptops. And maybe it’s just me, but I recently noticed a lot more self-help and advice articles circulating the web.
By Eric Quach
I am sure the majority of us, whether writers or not, are familiar with the ever impeding plight known as writer’s block. We have all been called upon to write something in our lives, whether it be a strenuous term paper or just a succinct cover letter. A lot of these situations result in an unconquered first page of Microsoft Word, an adjacent flatscreen tuned to sportscenter, and countless wasted hours. The reason this occurs is not because we are incapable, but because of present obstructions and a lack of will or means to clear them.
This blog by Axcient was originally published in The VAR Guy on May 16, 2012.
Everyone in the IT industry likes to talk about the importance of ensuring a quality data backup. We all know how vital that data is to our customers, and how losing data can cripple an otherwise flourishing business.
But in the world of small business we see examples every day of companies whose data is at risk with unreliable backup solutions. One standout example of this is businesses that still use USBs to protect their most critical information.
Do you know what the acronym “USB” stands for? If you said “Universal Serial Bus,” you’d be right … if it was 1996. That’s when USB drives first hit the market, and gave businesses a false sense of data security. Businesses today should know to refer to the USB by its more modern, more accurate name that describes its unreliability as their primary data protection — “Un-Safe Backup.”
Why the unflattering term? Let’s start with the obvious — they’re small and easy to lose. And be honest, we’ve all lost one, whether between the couch cushions, at the bottom of a purse, or at the dry cleaners. In fact, according to a recent survey, we left more than 17,000 USB drives at the dry cleaners in 2010, in addition to our lucky ties. That’s a 400 percent increase in USB drives that we left the local dry cleaners in 2009.
All joking aside, the dangers of USBs are real. Since businesses today are more privy to malware attacks via e-mail and suspicious websites, cybercriminals are now infiltrating more USB drives. Today, roughly 25 percent of malware is intended to crack USB devices.
More than half of the businesses surveyed in a 2011 Ponemon Institute study reported losing sensitive or confidential information that they carried on USB devices within the last two years. More than 70 percent of them reported losing those devices multiple times. Consider that each drive can hold about 12,000 records and breached records cost businesses an average of $194 each, according to the same study. That means one lost USB can set a business back by more than $2.3 million, and this doesn’t count the downtime resulting from this data loss.
What’s more, small businesses suffer the most from the use of Un-Safe Backups, given that so few of them have dedicated IT personnel or have set proper policies that combat USB threats. A December 2010 study by Lenovo of more than 700 small businesses found that 31 percent of SMBs are using USBs to back up their work data. Only 13 percent of respondents were aware of their company using a cloud-based backup solution. We’re talking small banks, independent healthcare facilities, junior law firms — small businesses that carry much of our most sensitive and personal information.
The good news is, where there’s a threat, there’s an opportunity for solution providers and resellers to help. And right now VARs have the opportunity to help small businesses protect themselves against malware and other threats to their networks with a more complete data backup, disaster recovery and business continuity solution. Let’s not forget why SMBs started using USBs in the first place — there weren’t any affordable alternatives 16 years ago. All of the data backup solutions were designed for enterprises and priced accordingly.
But now SMBs have options — access to affordable data backup, disaster recovery and business continuity solutions that will keep their files safe and their businesses up and running. This is much easier than a sales pitch. It’s an opportunity to educate – to make your SMB clients aware that affordable and more reliable alternatives to Un-Safe Backups do exist. After that, smart businesses will be asking for it before you offer it.
Over the past month or so I’ve come across a number of articles that derive lessons from iconic movies and apply them to today’s business world. The first of these I read, “Five Career Lessons from Han Solo,” appeared in Forbes on March 29 and was one of the most read articles on LinkedIn. Another was Fast Company’s “An Offer You Can’t Refuse: Leadership Lessons from ‘The Godfather’,” in which Axcient’s CEO, Justin Moore, took five strong themes from “The Godfather” and explained how each could be applied to everyday business. These two examples got me thinking about lessons I’ve learned from movies, but then I realized that some of the most meaningful advice I’ve received is from a much lesser-known source.
If you’re a working professional, chances are you’ve received an email, LinkedIn message, or even a cold call from a recruiter. As a recent college grad, I’ll admit that I ignored almost every single form of communication that I received from a recruiter during my senior year. Of course, most of these were from service-oriented programs such as Teach for America, Peace Corps, as well as the U.S. Army. I viewed these emails and the occasional letter as nothing more than a mass mailing since virtually every one of my friends and fellow classmates received them as well (and on several occasions the email addressed to me either misspelled my name or had the wrong name entirely). However, now that I’ve had first-hand experience with recruiting here at Axcient, I know that what I like to call “real-world” recruiting is nothing like my experience with recruiting in college. Continue reading “Recruiting – College vs. The Real World” »
This blog was originally published in The VAR Guy on March 19, 2012.
You’re a VAR, trying to crack into the cloud solutions market. You understand why the opportunity is hot but you’re not exactly sure how to make your first monthly recurring revenue (MRR) sale. After meeting with hundreds of VARs at the HP/Axcient Cloud Roadshowthis past month, I can tell you that you are not alone – about 75% of attendees were looking to make their very first Software-as-a-Service (SaaS) or managed service sale. In case you missed the Roadshow, here’s a summary of the five steps we presented for how to align your business model to leverage the cloud. Continue reading “How to Get your Business in the Cloud” »