During my Q3 conversations with some of Vantiv’s most successful reseller and ISV partners, I saw that automation software was the backbone for the most efficient – and the most profitable – POS solution providers.
In an effort to expand upon that information, PaymentsEdge Advisory Services commissioned an online survey of Vantiv reseller and ISV partners during Q4 to better understand the current and anticipated adoption of automation software in the POS channel.
I see five key takeaways from this study. The first four are based on survey numbers, while the fifth takeaway was gleaned from reseller and ISV comments.
1. Nearly one-third of POS resellers/ISVs who do not have PSA software now plan adoption in 2017.
Of the 113 partners who participated in the survey, 38.1% said they currently do not utilize PSA (Professional Services Automation) software. The bad news here is that most of these resellers/ISVs are likely tracking projects manually through a tool like Excel spreadsheets -- not very efficient for an increasingly complex and quickly changing channel. Also, PSA software is the bridge to managed services and greater recurring revenue, and these solutions providers are currently stranded in the break/fix world. But the good news is that approximately a third of these partners (32.5%) say they are likely/extremely likely to adopt PSA software in 2017, enabling them to operate more efficiently and allowing them to more easily transition to the as-a-Service/recurring revenue business model.
2. JIRA, ConnectWise are most popular PSA tools in the POS channel.
JIRA, billed as “issue and project tracking for software teams,” and ConnectWise, promoted as “business software for technology providers,” were mentioned most often as PSA tools being utilized by Vantiv partners. JIRA is used by 19.0% of all respondents while ConnectWise was close behind at 16.5%. Other popular PSA software in the POS space are Tigerpaw (11.4%) and e-automate (10.1%) with “internally built” placing fifth at 7.6%. The remaining responses mentioned a wide variety of software including Aegis, Autotask, NetSuite, Salesforce, and SugarCRM.
3. Half of POS channel companies haven’t embraced RMM; a quarter of them plan 2017 adoption.
RMM (Remote Monitoring and Management) software enables IT solution providers to manage their customer networks, infrastructure, and systems remotely. Because PSA software is considered a gateway to remote monitoring, it’s no surprise the current utilization of RMM software (51.5%) was lower than PSA software (61.9%) in our survey. Almost half (48.5%) of respondents said they do not utilize RMM software today, though about a quarter of that group (23.8%) say they are likely to adopt RMM software in 2017. A high number of that group (45.2%) said they were “extremely unlikely” to implement RRM software in the next 12 months while 9.5% said “somewhat unlikely” and 21.4% said “neither likely nor unlikely.”
4. No clear-cut standard RMM tool in POS channel.
Vigilix was mentioned most often as the RMM tool used by Vantiv partners, but that was still by only 12.5% of respondents who said they are RMM users. TeamViewer (10.7%) was mentioned second most followed by a tie between LogMeIn and ConnectWise Automate (formerly LabTech) at 8.9% each. Of the remaining responses, mentioned most often were AVG Managed Workplace, Comodo ONE, Continuum, LOGICnow, N-able by Solarwinds, and “developed in-house.” If a software developer can design and successfully market an RMM tool that’s flexible yet tailored for the POS channel, there’s an opportunity to set a new standard for our industry.
5. Automation software creates efficiencies, but also causes headaches for POS providers.
Let’s start with the upside of automation software. “The more we can automate, the larger we can scale without adding staff,” said one respondent. “Automation also allows us to be more consistent with our internal procedures, which in turn provides a more consistent experience for our customers.” An ISV said, “Automation is a huge focus for us. We use automation tools for social media, lead management, customer boarding and server management. The more automation the better!”
So why isn’t every reseller and ISV racing to implement PSA and RMM software? It’s complicated – both the situation and the software. Survey respondents said:
- “I see remote monitoring as a way to streamline our offerings and service the end user more quickly, but I need to believe that the connection is secure before I will jump on board.”
- “Automating POS deployment/updates/maintenance in a consistent, reliable and secure manner is one of our biggest challenges. There are expensive solutions available to address parts of the problem, but we've had to build (mostly) our own system to accomplish what we need at a cost that's competitive with what our customers will pay.”
- “The opportunity and the challenge is finding (or building) technology that will stay up with the changing landscape, and also be affordable.”
- “Coordinating system integration across sales marketing and workflow systems” and “how expensive they are” were also listed as biggest challenges.
One survey respondent summed up nicely the impact of automation software on their business compared to their less-sophisticated competitors: “Having it puts us in a position of great strength and allows us to scale much more rapidly. Hospitality executives are growing more familiar and demanding it as well, so we are at the head of the pack as a VAR and ISV.”
But that solution provider might have company soon. I believe this survey shows evidence that the march towards managed services is picking up speed in the POS channel. When I would talk with POS resellers as recently as two years ago, only a fraction of them were familiar with the PSA and RMM acronyms. Fast forward to the findings of this study, and it appears that by the end of 2017, we could have nearly three-quarters of POS solution providers utilizing PSA software.
There’s more information behind this special report, and I’m happy to share it with resellers and ISVs in our channel. If you would like to see that data, including charts and additional solution provider comments, email me at Jim.Roddy@vantiv.com and I’ll reply with an exclusive PDF compliments of Vantiv’s PaymentsEdge Advisory Services.