Welcome back to “5 Signs Your MPS Program is Stuck in 2006”. In last week’s entry we looked at sign #2 which you can find HERE. This week, let’s look at the 3rd sign your MPS business is stuck in 2006:
Sign #3: You still “sell” software & maintenance.
A good indicator that you are stuck in 2006 is that you “sell” the customer MPS software as a one time deal but contract them for pages on an annuity model! You used to sell toner cartridges on demand but switched to MPS in order to enjoy secure contracts. So why are you selling MPS software when you could be making annuity off of it too?
There are several problems with selling software, and they are:
- You lose control: Once the customer owns the software they can use it with or without your MPS services. Charging a monthly fee contingent upon using your MPS services will eradicate the risk of a competitor taking your MPS revenue.
- You risk commoditization: What is to stop your customer from calling to get competitive quotes? And because there are so many people selling software in the same way there will be no shortage of options for your customer to examine.
- You hand your account over to the software vendor: You do all the work, the software vendor gets all the benefits. Your customer no longer comes to you for expertise, they go straight to the software vendor.
The reality of 2014 is that SAAS (Software As A Service) is here to stay and is quickly becoming the new model for software delivery. SAAS too trendy for you? Do you think it’s a fad? There are lots of examples of companies who have moved away from traditional software sales with annual maintenance. You might recognize them:
- Google: Google Apps: 4 million businesses and growing. Corporate mail, calendar, and document storage all for a low monthly fee. Who’s using them? Just small companies, right? Think again: The U.S. Army, Lexmark, Delta Hotels, Cadillac Fairview, Motorola, and 4 million other businesses (and over 40 million users) you’ve probably never heard of, right?
- SalesForce: Traditional CRMs didn’t stand a chance. Anybody using Siebel anymore? I didn’t think so.
- Microsoft: Anybody heard of Office 365? All your Office favorites available online and for a low monthly fee! Microsoft Office 365 and SalesForce announced that they will be integrating.
- Oracle: That’s right, I said Oracle. They are seeing double digit growth in their cloud based CRM, ERP & HCM categories.
Selling software as a service aligns your MPS billing elements. Now toner, service and software can be delivered on a recurring annuity basis. Better for you and your customers. Time you got your SAAS on.