90 Minds Community

Interesting article at MSDW though I can't say the concepts are all that new. I do think that the market does away with the partners who've been snoozing and not building up the three suggested changes that they mention at the end of this article.

Warning:
- registration required
- they talk in relation to Microsoft Dynamics though I believe you can easily substitute any publisher
- business related - so if you’re primarily break/fix skip this

https://msdynamicsworld.com/story/channel-outlook-perfect-storm-microsoft-dynamics-vars

There is also a podcast for this episode which if very well done and goes into more details than the article.

My favorite tidbit from the podcast is that at the pace VARS are going they’ll eventually need to bill out some staff at $300+ in order to maintain their earnings.

It's an interesting article and is not surprising.  Below are my comments pertaining to the obsevered critical trends:

• A decline in median services margins to 33.1%, driven largely by a "utilization gap" that has delivery resources now billing 25% less than they did 10 years ago.

There's way less consulting services needed with cloud ERP software.  Upgrades happen automatically.   Less ability to customize (The trade off for auto-upgrade).  Less consulting, less tech support, less customization = less demand = less consulting services margins.

• A decline in median software margins to 30.7%, as SaaS subscriptions have displaced perpetual licenses.

As publishers press for quarterly results, they slowly keep a bigger piece of the pie for themselves.

• A median annual revenue growth rate of 7.3%, these days barely matching inflation.

This comment doesn't make sense.  No one cares about revenue growth based on price increases.  Organic revenue growth is the most meaningful measure of increased sales and is vital to a companies long-term success.

• A decline in median EBITDA to a dangerously low 6.5% as both services and software margins have compressed.

See bullet points one and two above.  Same point regurgitated.

------------------------------
Doug Higgs
Midwest Commerce Solutions, Inc
(312) 315-0960
Chauffeur, Chef, and Personal Assistant to Sprinkles
------------------------------