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To gain this competitive advantage, SIs and VARs first
need to understand the cloud forces driving the need for new
business models, and then they must learn how to successfully
create and package IP in a cloud services world.
With the rise of cloud applications and in-
frastructure, such as Office 365 and Azure, Mi-
crosoft and other software vendors are taking on
more infrastructure and deployment needs, and
as a result, there’s less of a need for software and
hardware resellers and lengthy on-premises de-
ployment projects. This new world of cloud ser-
vices offers significantly lower channel margins,
meaning SIs and VARs need to better optimize
the total hours and expensive senior personnel
allocated to each project.
For continued success, SIs and VARs need to
replace their traditional services by developing ser-
vices tied more tightly to the ongoing operations
of their customers – making them less dependent
on the installation phase of a project. Two impor-
tant opportunities exist to leverage their expert
insight – one is to build ongoing services around
helping customers use the data the applications generate, and
the other is to productize and package their IP into scaleable
offerings to create repeatable, recurring cloud revenue.
What is Packaged IP?
Packaged IP is created when an SI or VAR solves a
problem shared by a number of organizations by creating a
unique, productized software solution based on the partner’s
expertise rea. For example, big data has a
number of challenges that need to be solved including data
capture, data curation, data storage, analytics, visualization,
decision-support and more. SIs and VARs that deal with
big data for particular industries – such as retail – typically
have deep insight into the data structure and the types of
applications their clients need for sales, marketing and
finance in that industry. In this instance, the SI or VAR
could create pre-packaged IP by applying their experience
with one or more retail industry clients and their use of big
data to create a pre-integrated solution with the applica-
tions and functionality that other retail organizations need,
including specific field-mappings, inte-
gration logic and analytics. After solv-
ing for these vertical needs once, the
partner could scale their solution as a
publicly available “out-of-the-box” of-
fering for additional companies in the
particular industry.
Another tangible example comes
from inbound marketing, Web de-
sign and integration services agency,
LyntonWeb. A long-time provider of
HubSpot deployment and integration
services, the company’s team took ad-
vantage of the marketing expertise they
gained creating customized HubSpot
integrations to create a pre-packaged,
self-service integration offering. The
result, Integrate HubSpot, provides a
low-cost, easy-to-deploy SaaS solution
that integrates the HubSpot marketing
automation platform with Microsoft
Dynamics CRM. Integrate HubSpot
allows companies to purchase, configure
and deploy integrations in just a couple
of hours, and due to the hands-off ap-
proach, LyntonWeb can easily scale the
SaaS solution to serve as many companies
r 8%
7%
0%
1%
.S. Census; Market Realists
Segment, 2013
Cable
Wireline
Others
Residential fixed voice
58%
37%
SoHo
(micro) Business
1-4 Emplyed; $0.2
Trillion in Revenue
SMB Business
5-499 Employed;
$1.9 Trillion in Revenue
Large Enterprises
2,500+ Employed;
Over $3 Trillion in Revenue
and Wireless Revenues,
illions)
2015 2016 2017 2018 2019
Wireline Wireless
Fixed and Mobile Revenue
Source:
Charter Business
Mediacom Business
L(3) Enterprise proforma
VZ SBS
AT&T SBS
-
Source: CompTIA, 2014
Primary Catalysts for Channel Business Transformation
Cloud pushing in new directions
Demand for new services and IT delivery
Desire for recurring revenue model
New financial models are more lucrative
Vendors pushing for change
Margins on product sales declining
Defensive more against obsolescence
41%
36%
35%
32%
27%
23%
23%
Source: Consumer Intelligence Research Partners
2013 U.S. Mobile Device Sales Pie
Carrier
57%
Amazon
8%
Mass/
Warehouse
11%
Best Buy
12%
Apple
9%
other
3%
Source: Apps Run the World
Enterprise Applications, Cloud vs Non Cloud Revenues, $M
License and Maintenance Cloud Subscription
250000
200000
150000
100000
50000
0
38555 46502 53050 60681 67447 73133
148424 146924 144896 141498 138133 133066
2014 2015 2016 2017 2018 2019
58 ChannelVision | January - February 2016