Posts Tagged ‘SaaS’

Why “owning” the customer relationship is so important for service re-sellers

November 15, 2017

Sales and billing models have been top of mind for me recently, particularly as Datagate is in the process of expanding into the North American market and getting an understanding the dynamics of the service re-sellers and vendors who operate there.

Relationship_1

In the ICT industry – in particular, business computing and communications – we have seen a huge shift towards the “as-a-Service” model and a shift away from the earlier model of selling hardware and desktop software solutions.  This has brought about what we refer to as the age of the service re-seller.  Service re-sellers are everywhere at this time – you just need to know how to recognize them.

Service Re-sellers

Within the ICT industry, service re-sellers are businesses that sell on-line services that are built, owned and supplied by another another party – a service vendor.  Typically in the ICT Industry,  service re-seller are Managed Service Providers (MSPs), Business Solution Providers, Value-Added Re-sellers (VARs) and Telecommunications specialists.

Often, service re-sellers have the advantage of being able to offer a closer, more personalized service than what the large service vendors can offer. MSPs can often position themselves as a single point of contact for all ICT services to their end-customers. Service re-sellers will often combine and bundle services together from different vendors to create unique value offerings – which are more difficult for competitors to displace.

With any online service sold by re-sellers, such as cloud solutions, telecommunication and data services there are a number of different marketing, sales, billing and support models that are possible.  Each is model is significant as to who “owns” the customer relationship.

Who “owns” the customer relationship?

Any relationship has at least two parties and obviously the customer owns one side of the relationship.  But on the the other side, the ongoing supplier relationship; who “owns” it will depend on who controls it and who is more visible to and engaged with the customer.  Most important is the flow of money; who bills the customer and under what brand?

If the re-seller sells, bills and supports the service under the re-seller’s brand and also holds the supply agreement with the customer, then clearly the re-seller fronts and owns the supplier side of the customer relationship.  If the re-seller allows the service vendor to perform any of these functions under the vendor’s brand (particularly billing and the flow of money), then it cannot be said that the re-seller owns the relationship.  If the service vendor performs all or nearly all of these functions under their brand, then the service vendor owns the relationship.

Why is owning the customer relationship so important?

The “owner” ultimately gets the most business value from customer relationship, in terms of control of the service and also the boost in valuation of their own business.

If the re-seller is the relationship owner, then the re-seller has more power in negotiations with service vendors and is often able to change or re-negotiate service contracts or change vendors in the background to the customer relationship.

Business valuations are most often calculated on multiples of revenue.  Locked-in monthly recurring revenue  (MRR), such as what you have with contracted on-line services, is valued significantly higher than other types of revenue.  This is because MRR is the best quality revenue – in that it is regular, ongoing and largely predictable – a solid cash platform for building valuable businesses on.

How to own customer relationships in the service re-selling model

For a service re-seller to “own” a service relationship (such as telecoms, Cloud software & services etc), those services must be named, billed and supported under the re-seller’s name and/or brand.

This typically requires a white-label service-billing solution, such as Datagate that can plug into usage data supplied by service vendors, apply pricing plans created by the re-seller and the automatically create & distribute re-seller-branded bills to the end-customers.  Datagate also provides re-seller branded portals where the end-customer can view invoices, reports and analysis of their service consumption.

Datagate’s mission is to enable service re-sellers (who are typically MSPs in the ICT industry) to maximize the value of their business and “own” their customer relationships in the areas of telephony and other on-line utility services.

We are also committed to helping service vendors maximize their sales channel growth through service re-sellers.

 

 

The World as a Service

April 6, 2016

The “as-a-service” approach to business is gaining more and more traction across many industry sectors. Consumers are developing a preference for subscribing to services as opposed to buying things.

The Internet, Cloud Computing and mobile apps have been high-profile influencers on people’s buying patterns, which have promoted an “as-a-service” mentality. XaaS (anything as a service) is regarded as a new “disruptive” approach to satisfying consumer demand, even though the subscription business model itself has been alive and kicking for centuries in industries such as newspapers, magazines, telephony, insurance and leasing, to name a few.

XaaS_globe

We are now seeing professional service businesses that traditionally charged by the hour start to charge by fixed subscription instead. This is shown to greatly improve productivity and effectiveness in delivering value to customers. Customers are more inclined to engage and use their subscribed services, rather than hold back to avoid hourly charges. Questions and arguments about billing are significantly reduced. The subscribed model invokes an on-going partnership instead of a series of one-off transactions or interactions.

I.T. businesses that used to sell servers and other hardware items have moved to selling on-line subscriptions to hosting services and have extended their businesses to sell subscribed telephony and data services. They have learned that subscribed business is regular predictable business that they can rely on, so long as they look after their customers. Subscribed business is the best kind of business for the customer and the supplier!

At Datagate, our specialty is enabling service re-sellers to efficiently process, report and bill measurable subscription services, such as telephony, data circuits, hosting, Cloud & mobile apps, electricity, water, gas etc. All of these billing models include a combination of monthly fixed and variable billing. The variable component of the bill is normally derived from a data feed from the supplier of the service that details the service consumption quantities.

I find it interesting that we are encountering many new “as-a-service” businesses that fit Datagate’s fixed and variable subscription model. Some of these are “traditional” as-a-service businesses and others are revolutionary and disruptive approaches to markets formerly served by product or time sales.

At the coal face we see the shift to an “as-a-service” world is very real.

  • SaaS – Software as a Service
  • TaaS – Telephony as a Service
  • IaaS – Infrastructure as a Service
  • PaaS – Platform as a Service
  • MaaS – Monitoring as a Service
  • DBaaS – Database as a Service
  • XaaS – Anything as a Service

Introducing Datasquirt

March 25, 2010

I have to be careful about what I say about Datasquirt because it’s a publicly listed company on the Australian stock exchange (ASX:DSQ) and being a non-executive director and chairman, there are strict rules about what I can and cannot say, without making an announcement to the ASX.

What I can say is as follows; 🙂

Firstly, I have to say that Datasquirt is a cool company, made up of people who are passionate about what they do. Datasquirt’s product is called CONTACT and it’s a SaaS, Web deployed Communications Console for Corporate Businesses to enable their Contact Centers (formerly Call Centers) to interact with their customers, suppliers or staff using SMS text, Instant Messaging, email, fax etc.

I was one of the founders of Datasquirt and so my involvement dates back to when the company started up in 2001. This was soon after I (and some of the other Datasquirt founders) sold our previous business, Exonet.

In the early days we did a lot of experimenting to see how SMS Texts could be used for business purposes. After several years of building custom SMS applications for various industry verticals, we started to see what common functionality everyone wanted and realized that all the big customers had Contact Centers – so we designed and built CONTACT as a product to satisfy this market need.

Being web deployed, CONTACT can be run from any browser on the Internet, so requires minimal effort by the customers’ IT departments to get it up and running. The product integrates with the customer’s internal databases such as CRM, ERP etc and has advanced logic algorithms to pre-process messages automatically and/or distribute them to applicable call center operators. Templates and automation facilitate a speedy response to incoming messages and advanced reporting functions enable all types of reports and analysis – including the types of reporting normally expected in corporate contact centers.

In today’s world of advanced and instant world-wide communications, it is more important than ever for businesses to engage with the new communication technologies and new social media types like Twitter, Linked-In, Facebook etc. Accordingly, these are exciting times for Datasquirt and its product CONTACT which empowers corporate business customers to communicate directly, instantly and intimately in the new communications age!

Watch this company this year!

www.datasquirt.com