The Challenges
The ability to deliver dozens of new value-added services requires a specialized infrastructure and patchwork of license agreements that commits significant CAPEX and OPEX investment, takes years to develop, and lacks flexibility and scalability when not architected properly. For carriers and traditional channels who are facing declining margins from commoditization of their core products and services, a "not invented here" mindset can prove very expensive, cause go-to-market delays, and can accelerate a downward spiral when competitors with differentiated service offerings attack their customer bases.
Making the transition to web-based services delivery is simple in concept, yet difficult to implement quickly, efficently, and profitably. Major considerations include:
- Integrating the delivery of third-party value-added services into existing automation, billing, and provisioning platforms and processes.
- Understanding and validating which services are ideally suited for installed base customer upselling and bundling with core product offerings to grow market share.
- Developing the sales and marketing expertise and executing programs to sell and cross-sell on-demand services to existing and net new customers.
- Having the flexibility to quickly and cost-effectively test-market dozens of new services and bundles to meet the demands with the market and competitive landscape.
- Providing world-class help-desk support for all services, delivered to all customers.
- Getting to market quickly, efficiently, and profitably to gain first or second-mover advantage.
For SaaS ISVs, a "build it and they will come" mentality does not garner success without significant investments in establishing market awareness, building a direct sales force, and providing easy accessibility for their customers to helpdesk support services. While some have succeeded by selling directly to the enterprise market, their cost of sales greatly inhibits success in building marketshare within the SMB market -- a market that constitutes over 50% of all IT spending and is growing twice as fast as the enterprise market.
And for SMBs, not having a "trusted advisor" who can recommend and provide suitable web-based services inhibits their ability to grow and compete, as well as draining valuable in-house resources and money for on-premise solutions. ISVs who have not, or cannot, make the investment in building awareness may never be found. And traditional channels and carriers who service these SMBs miss out on an opportunity to drive new revenues and grow profitability with their existing and potential customers.