Catch-all umbrella

One for all

Longform
Image: Stockfresh

16 September 2016

Almost everything in IT comes on a performance basis these days, whereby organisations have the option to buy hours of performance, not just tin. These bundles invariably include service and feature options too. But is there demand in Ireland for these new options? How is the channel coping with the bundle play? Do partners have the portfolio and skills to deliver on them? Are Irish organisations taking up the new way of consuming?

Eamon Moore, E-mit Solutions

Eamon Moore
Managing director, Emit

Moore believes there is definitely demand for bundles which, he notes “is very much driven by businesses looking to avail of IT-as-a-Service”. They are also looking for flexibility, “the ability to turn services on/off with ease, as well as increasing capacity to meet business growth, project schedules and certain busy periods”.

He says Emit has built “a complete IT-as-a-Service offering for businesses with consumption of our services as well of those of our tier one partners being delivered in the form of monthly subscription-based transactions”. He claims the company has devised its service offering in such a way “that each of the solutions complement each other and businesses can choose when is the right time to avail of these”.

“Cloud is a major driving force behind this but, interestingly, we have implemented this model for more traditional services”

But he is less convinced that most partners have the portfolio and skills to deliver on the demand for these new options. “In a lot of cases the answer is ‘no’, as many IT companies are still delivering traditional IT services through business models that are built for annual transactions,” Moore observes.

Comprehensive offering
By contrast, Emit has made a lot of investments over the past few years to ensure its portfolio and products “deliver an all-encompassing IT solution for businesses”. It has rebuilt its managed service offering with the introduction of Autotask to support the solutions portfolio and expanded its Microsoft Cloud portfolio to deliver infrastructure solutions thought Office 365, Azure and Enterprise Mobility Suite.

In addition, it has entered the business productivity market by adding SharePoint, Dynamics CRM and PowerBI to its offering. Security is also a major part of its offering. In conjunction with Dell and Microsoft, it provides security and identity solutions as a service through SonicWall and Microsoft’s Enterprise Mobility Suite.

It’s all well and good having the services in place for this new model but are Irish organisations taking them up? Moore replies: “Yes, the majority of our clients now transact with us this way and are really impressed with the flexibility of our IT-as-a-Service model. Cloud is a major driving force behind this but, interestingly, we have implemented this model for more traditional services also.”

Rob Curley, Singlepoint

Rob Curley
Managing director, Singlepoint Solutions

Curley isn’t entirely convinced that the bundle play is taking hold. While he accepts that customers frequently express an interest in these types of deals, his experience is the enthusiasm wanes as the reality of trying to construct them dawns. “I’ve been involved in deals where we take a hit on the build upfront based on application usage,” he says. “But they’re not that common. They’re very complex to broker. It’s not as simple as paying for time and materials. I’ve had clients who think they wanted it but when you break it down into how it would be paid for, they don’t buy it.”

“There’s a balancing act based on scale, longevity of contracts, keeping the client happy and the need to get a deal”

While it “works fine in theory” when organisations get to the business case and start talking to their finance people, things start to unravel.  “They’re not going to allow third party organisations to benefit based on application and cost savings,” Curley argues. “It might stand up in a business case, but it wouldn’t fly from a revenue share perspective.”

He believes that “there isn’t a huge appetite for it once you start putting models on the table to them. They invoke a lot discussion but when it comes to pulling the trigger on them, I don’t think organisations are ready to share revenue with organisations like us”.

Extra support
Instead, Singlepoint frequently ends up offering additional services on top of what has been requested. A lot of clients ask for things to be bundled in as a value add on top of the usual service offerings. Larger clients, in particular, are always looking for additional services that the company can bolt on to give them value add. For example, if an application is being delivered, customers might ask for support to be bundled on top for 12-24 months. Usually, they’re looking for something above and beyond what they’ve asked for on the specific application and they don’t want to pay for it, such as training to get people ready for the application.

Add-ons might also include consultants or more people, they might look to Singlepoint to add some “thought leadership or an additional consultancy service to solve a particular problem or an additional software solution to solve a problem”. For example, Singlepoint’s Project Reporting Center is a SharePoint application that gives the Project Management Office (PMO) function the ability to manage, administer and report on projects and the company often uses it as an additional sales attraction to the customer. “We bundle things on top to try and get additional business or to keep the client happy,” Curley states.

Larger clients, in particular, “twist our arm quite a lot. There’s a balancing act based on scale, longevity of contracts, keeping the client happy and the need to get a deal. Everybody needs to get a deal”. From the partner’s perspective, it helps to be open with the client as it’s “a continuous exercise of looking at extending out, what can you add to the table to differentiate yourself from the competition”.

But there’s also a “lock-in on client side as well. As we bundle more and more stuff, we’ve given more and more stuff to clients, such as free support contracts across applications built. If the client stops using us, we’ll stop the support contract”. He believes that with bundling at a software level and the use of AWS and Azure, “there’s a huge lock in problem coming as more and more stuff gets bundled and used by clients”.

Read More:


Back to Top ↑

TechCentral.ie