By Lou Antonucci
As technology service providers reinvent their business models and look for paths to capitalize on recurring revenue, a growing number of forward-thinking VARs and SIs are responding with “packaged" vertical cloud-based solutions. In fact, Gartner predicts a rise in integrated ecosystems — bundled software and services shipped together — in 2013. These solutions are primarily high-function business management solutions — from marketing through back-office operations — integrated into one simplified user experience accessed through the cloud.
The Perfect Storm
As business applications move to the cloud, the nature of the relationship between customers and their technology service providers is changing. Software margins and infrastructure service revenue are diminishing, and channel partners must rethink their business models to deliver new forms of value to customers.
The cloud has also fueled the proliferation of specialized applications now that software developers can move to market so quickly. Applications that solve very specific business problems can be obtained with the ease of a credit card transaction. Businesses are faced with a new challenge of application overload.
These two factors create a perfect storm of opportunity for VARs and SIs. Customers want the functionality that these new applications can offer, but they don’t want to go back to the days of siloed data and disconnected systems.
Partners with the capabilities to integrate a number of applications to make a simple, high-function packaged solution are in a unique position to build revenue opportunities. Data integration and application management offer new worlds of margin to smart VARs and SIs.
An Evolution in Packaged Services
With a long history in the data integration field, we have seen channel partners package solutions in many ways over the years. Generally, packaged services combine a fixed set of support services with an application or application set. Customers pay a monthly or yearly fee for the package.
The big opportunity that we see now is the ease of repeatability for the VAR or SI with cloud-based deployment. In a multitenant infrastructure environment, the service provider can integrate a number of functional applications that serve a defined set of customers. The cost of adding customers is nominal and builds recurring revenue.