Some construction businesses already function effectively as value-added resellers of SaaS-based collaboration tools, filling a gap left open by traditional software VARs.
I have discussed routes to market for SaaS construction collaboration vendors a few times – for example, last September, I contrasted Woobius’s aspirations to sell direct via the web with vendors who have deployed sales teams to engage with potential customers. And in December I wrote about Asite‘s tie-up with US-based reprographics firm ReproMAX creating local partners to market its services in north America (a similar move to BIW’s partnership with Sage CRE; post).
The value of VARs?
I am undecided about the role of resellers when it comes to software-as-a-service, particularly advanced applications for mission-critical capital projects. Of course, the IT industry has a long history of dealing through value-added resellers (VARs), but the advent of cloud computing has already started to have an impact on traditional software VARs. Hunter Richards wrote about this in a January blog post, Fear Not, Resellers: Every Cloud Has a Silver Lining, on SoftwareAdvice.com.
With SaaS-based applications now being sold direct online, the VARs’ role as software sellers is being eroded. Remotely hosted SaaS also means no hardware sales to the end-users, and no installation work. Growing adoption of common web standards, sharing of application programming interfaces (APIs), and increasingly sophisticated configuration options mean decreasing volumes of integration and customisation work. And as SaaS applications tend to be easier to use, less training is required – and what help is needed can often be supplied online.
Hunter suggests that VARs need to adapt to survive, creating partnerships with vendors and then making “five bold moves to gain a sturdy foothold in the market”:
- Develop competency on a leading Platform-as-a-Service (PaaS).
- Make the cloud’s efficiency work for you.
- Offer technology-enabled services.
- Promote the cloud to your existing customer base.
How construction businesses work as VARs
When we look at these as they apply to the main SaaS construction collaboration technology vendors, it appears that the place of software VARs may have been taken by mainstream construction firms. In the UK at least, such services have rarely been sold through IT-based VARs. Instead, the leading providers often have long-established partnerships with construction businesses (contractors, project managers, etc) who deploy the chosen SaaS application on their client’s projects and provide first line support and training (for example, unless the client has an alternative preference, Gleeds and Mace will tend to implement BIW’s platform).
1. Specialise. Hunter urges VARs to narrow their focus to a vertical market or application category. Arguably, this has already happened, with contractors and project managers adding value to their core construction services by delivering collaboration platforms that are pre-configured to suit their company branding and project processes, thus accelerating mobilisation and familiarisation by their employees and regular supply chain members.
As mentioned above, Asite and BIW have also sought to build on existing networks’ previous familiarity with the north American construction sector (gained from partners providing reprographics services and financial/accounting solutions respectively), but it remains to be seen whether these VARs can extend their market specialism to include provision of collaboration systems. However, I believe Asite expects its e-procurement engine to increase the efficiency of ReproMAX’s service delivery by automating transactions.
2. Develop competency on a leading Platform-as-a-Service (PaaS). “Build your own applications and customisations, and then market them”, suggests Hunter. Some of Asite’s users, for example, have been using its Appbuilder system (post) to create libraries of usable applications for company or project-specific processes such as expenses management, snagging, and cost control, including mobile tools.
3. Make the cloud’s efficiency work for you. This was quickly discovered by experienced construction collaboration users: a centralised, web-based repository of information and process management tools means that team members don’t always have to be on-site to manage their workload. Indeed, some can manage multiple projects simultaneously, making better use of time and costs associated with travel to site.
4. Offer technology-enabled services. Traditionally, a contractor or project manager’s involvement with a project often ended after hand-over of the built asset to the client, but asset-related services enabled by cloud-based systems might now be offered to clients. For instance, as-built data derived from the design and construction delivery process might be used to support facilities management, operation and maintenance, and for governance, regulatory and compliance purposes. Information from across multiple projects might also be analysed for business intelligence (BI) purposes so that the client gets insights into the efficiency of its assets and/or the supply chain members that have delivered them.
5. Promote the cloud to your existing customer base. As already mentioned (1 above), some construction firms are helping their clients learn about cloud-based systems and to make informed choices about which system(s) to use. And this trend is likely to grow; as I wrote yesterday, commercial property firms are already beginning to use cloud computing services, and as property owners and managers begin to embrace BIM and whole-life cost thinking (something urged in UK chief construction adviser Paul Morrell’s IGT report published in November last year) seamless re-use of data extracted from the initial build processes should become the norm rather then the exception.