I concede: I often blog about the fact that many SaaS applications like Microsoft BPOS (Business Productivity Online Suite) don’t offer VARs and MSPs enough profit margin opportunity. But I had a rather enlightening conversation yesterday with Next Level Cafe, a managed services provider based in Minnesota. CEO Richard Anderson offered some timely perspective on the true SaaS opportunity. Here it is.
Anderson described how Next Level Cafe made the switch to managed services back in 2002 or so. Then about three years ago, the company started making more and more SaaS moves — including a relationship with Intronis, the online backup specialist.
Anderson’s key learning: SaaS (software as a service) isn’t about generating big profits or massive margins — at least not in the near-term. Instead, it’s about efficiency and automation. You gain some valuable recurring revenue. But more importantly, you’re freed up to work on strategic projects for your customers.
Apparently, SaaS and managed services are treating Next Level Cafe well. Roughly 85 percent of the company’s sales involve recurring revenue (SaaS and managed services) engagements. Anderson will share more details during The VAR Guy’s April 7 Webcast, Getting Started with SaaS.
If you’ve got questions for Anderson, feel free to post a comment or email me (joe [at] NineLivesMediaInc.com). We’ll cover dozens of attendee questions during the webcast.
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Posted In: Platforms | Sales | Service Level Agreements | Software as a Service and Hardware as a Service
Tags: BPOS | Business Productivity Online Suite | Managed Services | Next Level Cafe | online backup | online recovery | online storage | SaaS | Software as a Service and Hardware as a Service | The VAR Guy Live
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I met Rich a few times at HTG events and finally got to talk to him for a while at the last weeks XChange Solution Provider event, he definitely gets the whole SaaS move. As a software company that caters to MSPs, he’s the kind of a partner you’re looking for that understands how things fit into the marketplace.
I’d recommend checking out his thoughts on the webcast when it goes live, he definitely has some really good insights. And a poor taste in hosting providers but I might be “slightly” biased there
-Vlad
Vlad: Thanks for shedding more light on the subject. I didn’t make it into Xchange… Guess my invite got lost in the mail
Kidding aside, Rich made a heck of an impression when I spoke with him on the phone so I look forward to continuing the dialog with him and our attendees on April 7.