Looking back over the last 12 months may not be particularly enjoyable for all software providers as the recession continued to bite. However, most agree that the next year is one of promise and opportunity for providers and dealers alike.
ECi Solutions CEO Ron Books says: “2010 was much better than 2009, as we saw growth across most areas of the business. That said there is still room for improvement.
“Our largest concern continues to be dealers that go out of business and/or merger and consolidation activity. As we have stated, we are 100% tied to the success of the dealers so when they go out of business there is a direct impact.
“However, based on the many conversations we have had with them things seem to be improving, albeit slowly. We are reasonably bullish on the next 12 months. Even with the economic challenges in 2010 forcing closures and consolidation within the dealer community, we sold over 400 new systems throughout the year across ECi and over 100 in the office products sector alone.
“With the technology investments we’ve made and with improvements in the economy, overall consumption and ultimately the dealer community, we feel confident that we will continue to grow. Technology is so important to success nowadays and those that utilise it successfully will continue to compete and see returns.”
Thalerus describes itself as “very excited” about the next 12 months as it looks forward to launching a brand new version of VIBE – its business management software – and its webstore solution Vendere, while BMI is equally enthusiastic.
BMI President Larry Schiff says: “Last year, obviously, the recession had an impact on sales. However, we had some interesting new clients including our largest client to date. TriMega’s go live of its Point Nationwide website was another highlight.
“But the year ahead is where the really good news is. We have our best pipeline of prospects since 2007 and it really appears that OP dealers will be moving forward with new systems this year. In general, it appears that dealers are feeling better about the economy and know they need to make those technology decisions that they have been delaying if they want to stay competitive.”
At JumpTech, John Freund is confident about the year ahead, in part because of the state of flux that still exists in the global economy.
He says: “In tough economic times dealers need to find ways to drive new revenue streams and margin. Our reputation for helping dealers close bigger accounts at higher margins has caused many dealers to turn to us for help.
“I believe that the US economy will continue to have challenges, especially with all of the change happening in the Middle East, but during tough times, companies turn to their vendors to find ways to cut costs.
“Our ability to provide dealers with a solution that will help their customers to cut their requisitioning costs, reduce maverick spending and minimise inventory will put dealers in a position to grow their business, which, in turn, helps us grow ours.”
Another area that most of the software providers agree on is that in the last year dealers seem to have increasingly taken on board the importance of technology as not just hardware and software but as an entity for enabling your business to reach its bottom-line goals. They have also realised the
twin benefits of cost cutting and growing sales.
Books explains: “E-commerce continues to be a major focus area for those progressive and innovative dealers over the last 12 months. Beyond that I look at a few key areas that we have seen a major focus on over the last year and will continue in the coming months.
“The first is managed print services (MPS). Those dealers that do not educate themselves on this transition will not only miss an opportunity to grow but will also put existing revenue at risk.
“I also see a continued movement towards a more ‘hybrid dealer’ and the technology requirements that come along with that. Our dealers must leverage their existing relationships and increase their offerings and services to grow revenue.”
Of course, on the subject of e-commerce one of the key areas to get right is search engine optimisation (SEO), although JumpTech’s Freund believes other factors shouldn’t be overlooked by the dealer.
Freund says: “I am sure most dealers will tell you that when it comes to e-commerce, SEO is key. Although it is key, it is being addressed nicely by the third-party providers and the wholesalers.
“I think that system integration and interoperability is equally as important when it comes to dealer growth. If you look at some of the major wins in the OP industry this past year, like the US Communities win by is.group, dealer systems are going to have to work together to pull off the logistics involved with delivering on that deal.
“System interoperability has also been key for any dealer trying to capture larger accounts as they demand that you tie into their existing systems and work flow. This is typically accomplished by the customer punching out to the dealer’s system to exchange catalogue and order data. 2010 had many dealers looking to open up their systems to facilitate customer requests.”
According to President and Co-owner of GOPD Donna Snyder, the next year will bring plenty of cheer for dealers thanks to the technology on offer.
She says: “This is truly an exciting time to be an independent dealer. Technology is levelling the playing field for independent dealers. Technology enhancements towards automating more processes online to streamline and reduce operational cost for dealers (such as returns, customer invoice/payment access, and so on) are enhancing the online experience for
“At the same time they are allowing independent dealers to more fully automate their marketing process by qualifying, targeting and distributing their marketing materials.
“The most common marketing challenge for an independent dealer is time. Because the average dealer operates at full capacity most of the time, it’s difficult to dedicate the ongoing time that is needed to carry out traditional marketing.
“The advancements made in this area will require less of the dealers’ time and will reduce the cost of marketing campaigns for our independent dealers.”
Of course, the somewhat over-familiar phrase of ‘levelling the playing field’ is what technology is all about for dealers. It’s the perfect way of enabling them to compete with larger competitors and the power channel in particular. But are there really the right tools out there for dealers to make a dent on the profits of corporates?
Thalerus President Lillian Yeh says: “The new key areas of our technology will definitely help dealers to compete more effectively with the power channel as it will facilitate pushing more purchasing decisions from the back-end to buy-side functions.
“It will also enable more sales history information to be accessible via different enquiry and search functions. Lastly, it will enable different platforms of clients to access buy-side and ERP functions.”
Schiff adds: “As always, we need to provide our dealers with a competitive website. We have succeeded in doing this and much investment will continue to be made in this area.
“Furthermore we are working closely with United Stationers to provide all of the latest functionality that their dealers require. We are very excited about this new initiative.
“We will also continue to improve our SP Richards version as well. We believe our product represents the best of breed for independent dealers and we are wholesaler independent and work closely with both SPR and United to give their dealers needed functionality.”
Andrew Morgan at Red Cheetah also continues to see e-commerce as the area of most importance for dealers at the moment in their tussle with the big boxes.
He says: “We believe that the continued evolution of e-commerce is still the key. Speed of relevant search terms and results as well as individual shopping experiences for multiple users is key. We deployed our new e-commerce platform – Red Cheetah Outpost – in the last few months and have seen a tremendous response not only from our dealers but the consumers as a whole.”
Morgan is excited about new developments at Red Cheetah that are already seeing results for dealers. Talking about the focus of his products, he explains: “We believe a leveraged spend and SKU-level marketing and review is essential.
“Red Cheetah GPS has been created solely for the dealers to compete on a technology and a SKU level with the power channel. It can be done and we have many dealers that are successfully taking business from the power channel as we speak.”
For Ron Books at ECi Solutions, strategy will be the key to allowing dealers to make the most of the technology available to them.
Books says: “My personal opinion is that while technology is absolutely critical to helping them compete, it will be more important for the dealers to adopt new business strategies. Expansion into new verticals, MPS, driving rewards programmes and end-user usage reporting will integrate them further into their customers’ business, which helps with retention and differentiates you from the competition.
“Utilising technology to compete and achieve results is no longer an option, it is a necessity. However, to realise this success you need to change your mindset first.
“There are already progressive dealers out there doing just that and they are starting to drive the change from the top. Dealers no longer have the luxury of waiting to see if the economy will rebound on its own, but instead they must be proactive in adopting efficiencies, diversifying into other verticals and embracing new technology as it becomes available. These are the items that will make a real difference in a dealer’s business, now and in the future.”
Laura Guillaume from MBS Dev adds: “Technology should continue to help dealers expand their lines of business without having to expand headcount.
“Now that SaaS, cloud and all types of hosting are starting to get real traction in the technology
world, we think that we will see technology solutions become much more truly scalable.
“Technology providers need to partner with dealers to find out what is a real fit. This is the actual key; there’s no one thing. It’s making sure the business gets what it needs so it can execute.
“MBS Dev has continued to operate its traditional line of business of on-premise sales and implementations in the various distribution verticals we support. We are near completing the pilot installations of our SaaS offering for office supply resellers and will be doing a general release imminently.
“We are also going to expand our offering to further include Microsoft CRM and the new Microsoft cloud offerings for CRM, Exchange, Office and so on.”
And with the dust now settled on MBS Dev’s acquisition by United Stationers, the software provider would seem to be well placed to provide further help for dealers
in the future.
Guillaume says: “Our office products customers appear to be very comfortable with the arrangement. We get positive feedback regarding the acquisition. They are supportive and feel as if the investment is to their benefit.
“Many of our clients outside the office supply space are also supportive of this relationship. We operate as a separate business unit and are still VERY focused on our customers and their success on a solid ERP and e-commerce solution.”
One knock-on effect that the MBS Dev acquisition appears to have done is bring all technology providers that bit closer to the big two wholesalers United Stationers and SP Richards. While rumours of other wholesalers targeting software provider purchases hasn’t materialised it has seemed to crystalise the concept of these two vital parties working as closely together as possible to create the best solutions possible for the future. And that can only be good news for independent dealers.
Spotlight on paaS
“By the end of 2011, the battle for leadership in platform-as-a-service (PaaS)and the key PaaS segments will engulf the software industry.” This is the recent bold statement from Yefim Natis, the celebrated analyst at Gartner.
Certainly it seems as if hot on the heels of the increasing proliferation of SaaS (software-as-a-service) as a business enabler will come PaaS, a natural progression that could become crucial in the year ahead.
PaaS is the middle layer of the cloud computing software stack. It intermediates between the underlying system infrastructure such as operating systems, networks and storage, and the overlaying application software. The technology services that are part of a full-scope PaaS include functionality of application containers, application development tools, database management systems, integration brokers, portals, business process management and many others — all offered as a service.
Gartner believes that all the leading enterprise software vendors, as well as large cloud specialists, will introduce new offerings this year, making 2011 the year of PaaS.
“The cloud computing era is just beginning, and the prevailing patterns, standards and best practices of cloud software engineering have not yet been established,” adds Natis. “This represents an opportunity for new software providers to build a leading presence in the software solutions market.”