John Paterson, Managing Director of Really Simple Systems comments:
Having declared that ‘The CRM VAR is Dead!’ there is still a way that resellers can make money from Cloud CRM systems.
A specialised CRM reseller could make good money from the margin on reselling a traditional CRM licence, plus installation fees, implementation services and annual maintenance fees. But the same does not hold true for reselling Cloud CRM systems.
If the Cloud vendor offers a margin (and most don’t), it will be drip-fed as the customer is paying a monthly subscription. The service opportunity is much less as there is no installation and implementation is often minimal. And there will be no additional hardware or software needed.
All bad news for specialised CRM resellers who have unsurprisingly stuck to selling traditional products for as long as they can get away with, before the customers evaporate.
However, there is a way that resellers can make money from Cloud CRM, but it is very different. Instead of specialised CRM resellers selling high cost licences and services, a new breed of general purpose resellers is emerging.
These resellers don’t have a deep understanding of CRM processes and products, but they do have the skills that enable them to understand the business problems that their customer is trying to solve. They are then able to pull together the appropriate selection of cloud services to meet the customer’s needs. Resellers can sign up to be a partner for multiple cloud services or use an aggregator like RISC Group who can provide a range of cloud services, which they bill on one monthly invoice.
The service opportunities are less and less for each cloud service, but in aggregate they can, in time, become the same. And with cloud subscriptions the reseller gains a valuable annuity stream that adds a defined asset value to the business.
Resellers had to move up the value chain from word-processing, to PCs, and enterprise business applications and they will now have to evolve once again into assemblers and integrators of off-the-shelf cloud applications.