“I have not been this excited or optimistic since I started my first firm over 20 years ago, work is fun again!” shared Chris Dobkins, President of Njevity, during our interview.
Business Model changes by Microsoft, drastic price and margin declines have mandated huge changes to VARs business plans. Customers no longer follow any formula with respect to implementation costs. In the Dynamics world, you could always suggest a 1-to-1 or 2-to-1 ratio, which was far under the ratios that SAP and Oracle were quoting, and their software was much higher priced than Dynamics GP. Now customers push back hard on the proposed hours suggested as necessary to bring them live.
“The Cloud has turned all this around”, said Dobkins. “Not only do we have new ways to deliver our services and gain from the efficiency of Cloud based delivery, we have a fixed monthly fee with great value to the customer and an annuity based cash flow to us. This has been a turning point for us”.
The only challenge to the model has been Microsoft themselves. Since they directly offer Cloud solutions and services, they are competing directly against the VARs. This is not the typical Channel business model. Microsoft also continues to lower the margins on the Cloud licensing to the VARs, creating even more of a challenge for the VAR firms.
Challenges aside, the Cloud allows VAR firms to offer customers an assortment of options; discounted and bundled services, included enhancement fees, Dynamics GP Upgrades and more.
“We can fit a Cloud solution to any customer’s specific needs, even including hardware, Operating Systems and things such Microsoft Office and CRM, all at one low monthly price. Our customers love this” says Dobkins, “We target Distribution, Professional Services and light Manufacturing and find that our Cloud offering is well received in these markets”.
And while it is well-received, how exactly does Cloud licensing work? According to Dobkins, it’s based on named users, and many competitors do not set their pricing this way, making Dynamics GP a higher cost. For example, one competitor sets their pricing based on the number of companies the customer has, making a dramatic difference based on price for the customer as well as the market itself. Hopefully over time all the players will flatten out their offerings and customers will make their purchase decisions based on product fit and partner ability the way they do today.
Marla and David Greenman trace their Entrepreneurial experiences back to the original GPA DOS-based accounting product that predates even Great Plains under Doug Burgum.
“We have seen so many changes since the character-based product days, through early Dynamics with Great Plains and then onto Microsoft. It was always a challenge to have an ever-changing business model. However we focused on our clients and their needs and were very vocal to the Publishers throughout each product evolution,” says David, “We remained successful due to our customers and our dedication to working to include their needs into the various product releases”.
Even today, Dynamics GP with its high selection status is not a 100% fit for everyone; no product is. Several of David’s clients needed more robust purchasing features and had to look beyond Dynamics GP to the ISV marketplace. Today, David makes his living helping Dynamics GP clients who need assistance in linking ISV and custom systems to their core ERP modules.
In part, the Greenman’s reputation was built on providing on-going support to clients whose version of GP or Dynamics GP had reached the publishers cut off deadline; clients who for whatever reason did not desire to upgrade. David and his wife provided on-going support beyond these milestones to keep their customers going on the versions they had. Today, most VARs simply follow the same schedule as Microsoft and say the customer needs to upgrade or migrate. Many customers will do this. The risk is always that the customer may decide to widen their review and look at other non-Dynamics products. However, the stakes are high and the possible revenue gain is good. Presuming the VAR firm is a trusted partner the odds are ever in their favor.
The Greenman’s have also fought hard for changes to enrich and strengthen the various releases of the Dynamics GP Product, including keeping their heads in the Cloud.
“I believe the Cloud is a very good opportunity for the right clients. Firms with no IT infrastructure and SMB firms that have outgrown Quick Books for example are a perfect example of where the Cloud offering of Dynamics GP should be a huge market for VAR firms” says David.
It is very clear that Dynamics GP is here to stay. Even if and when the product may evolve into something else – whether it’s including the cloud or not – there will always be ‘lifestyle’ people like the Greenman’s who will continue to support the product for many many years beyond the publisher.
Have a question about how Journyx could help your organization? Let us know: http://journyx.com/contact-us
About the Author: Curt Finch is the CEO of Journyx, a Certified Microsoft Partner. Journyx maximizes the value of Microsoft Dynamics by adding enterprise time tracking. Journyx Accountlink for Microsoft Dynamics allows companies to quickly implement a complete time tracking solution using existing business data in Dynamics. Connect with Curt on Google+.
About Journyx
A Certified Microsoft Partner, Journyx enterprise time and expense tracking software is an add-on that integrates with Microsoft Dynamics GP as well as Project Accounting. Learn more at http://journyx.com/dynamics.
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