90 Minds Community

I strongly suggest taking this message to heart.

In short, the future is service revenue. The more that is recurring the better. The greater the variety ( multiple types, sources ) = even better.

Nobody in the article seems to view product/license/subscription sales and a growing source of revenue.

https://www.crn.com/news/channel-programs/the-channel-company-ceo-bob-skelley-services-leading-the-way-in-partner-profitability

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Wayne Schulz - Schulz Consulting - 860-516-8990
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Some of the smaller resellers, myself included, never depended on commissions for revenue, it was always treated as bonus revenue.

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Moira Goggin
Executive Director
90 Minds, Inc.
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I couldn't agree more. This is a good article explaining it.

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Jerry Norman
President, 90 Minds
Smartbridge Partners
512.419.1444 x112
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Thanks for sharing the link Wayne.  I completely agree with your observations.

The article cites multiple statistics and names providing testimony to the fact that the percentage of a channel reseller's revenue attributed to services is on the rise, and that in the aggregate, a higher service revenue concentration results in higher profitability.  No argument there.  However, without clarifying the fact that product revenues have declined as a result of the subscription model and all it entails, it could easily lead the reader to conclude that absolute service revenue numbers have increased significantly during the referenced time period.  While that may certainly be true in some cases, it cannot be assumed across the board.  Its likely particularly the case if a reseller's service offerings or targeted markets have not evolved. 

How do you say...preaching to the choir.

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Jeff Mack
President and CEO
ICS Support
Redmond WA
425-820-6120
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What the article doesn't underline is that the nature of the services is quite different from 10 years ago. 

Until recently, the core services demand was getting the software to work in the customer's environment. By 'work' I mean function, period. Advances in SaaS and in interoperability reduce the need for that by lots. The nature of services now needed is in helping the customer get the most from it, through education, configuration, and support for users in trouble. These are higher-level skills, and they are only valued by a smaller portion of customers --- unless the consultant expands the customer's vision about it all.

It is not a 1-for1 replacement. It is devaluing the "leaking faucet" plumber and producing opportunities for design engineers. Not all will make the transition.

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Jerry Norman
President, 90 Minds
Smartbridge Partners
512.419.1444 x112
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Original Message:
Sent: 08-22-2019 19:03
From: Jeff Mack
Subject: 'A mix of project-based professional services and recurring revenue services. When you put those two together – that's the successful model that we're seeing,'

Thanks for sharing the link Wayne.  I completely agree with your observations.

The article cites multiple statistics and names providing testimony to the fact that the percentage of a channel reseller's revenue attributed to services is on the rise, and that in the aggregate, a higher service revenue concentration results in higher profitability.  No argument there.  However, without clarifying the fact that product revenues have declined as a result of the subscription model and all it entails, it could easily lead the reader to conclude that absolute service revenue numbers have increased significantly during the referenced time period.  While that may certainly be true in some cases, it cannot be assumed across the board.  Its likely particularly the case if a reseller's service offerings or targeted markets have not evolved.

How do you say...preaching to the choir.

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Jeff Mack
President and CEO
ICS Support
Redmond WA
425-820-6120
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