The data we recently gathered, analyzed, and published (PaymentsEdge Advisory Services special report: Automation software reshaping the POS channel) related to PSA and RMM software impacting the POS industry got plenty of channel executives talking.
Now it’s our turn to listen to them and learn more about this emerging trend.
I originally planned to publish one article compiling the feedback I received about our special report, but due to the avalanche of responses (over 3,000 words!) I’m dividing this info into two articles.
This piece will focus on feedback from resellers and MSPs (Managed Services Providers), who are the users of PSA (Professional Services Automation) and RMM (Remote Monitoring and Management) software, and the vendors who design and provide the software.
Next week I’ll publish part two which will feature the perspectives of channel analysts and POS distributors. They don’t use PSA/RMM software, but they study and see firsthand how it impacts channel businesses on a broad scale.
Our contributors for this article include seven channel executives:
- Chris Rumpf, Rumpf Computer Solutions – Reseller/MSP
- Brady Nash, BNG Team – Reseller/MSP
- Mike Halasz, North Shore Technological – MSP
- James Foxall, Tigerpaw Software – PSA software provider
- Mark Sokol, ConnectWise – PSA and RMM software provider
- Dave Sobel, SolarWinds – PSA and RMM software provider
- Andrew Kurtz, Vigilix – RMM software provider
President/CEO/Founder, Rumpf Computer Solutions
Board Member, RSPA (Retail Solutions Providers Association)
I think the most interesting thing in your data was that the majority of RMM answers weren't actually RMMs. TeamViewer? That's remote access, not monitoring and automation. Same with a bunch of others. That brings a lot of truth to what, up until now, I thought was really just my own anecdotal evidence regarding the lack of understanding and desire to offer a true managed services approach to point of sale and the ecosystem that surrounds it inside a retail store.
This whole trend toward recurring revenue is all well and good, but without utilizing a managed service approach to automate your solutions, offer more solutions, and reduce overhead while increasing customer engagement and satisfaction, I don't believe a provider in the retail solutions space gets ahead. In fact, I think they continue to wither away and die, just as they would if they don't offer recurring options.
There's no education around these ideas either. So even when a smaller VAR wishes to look deeper into the managed side of things, there's not many places to go for research. No POS software company or equivalent is offering these types of solutions. Some are trying, but they all fall fields short of success.
Further, security is always called into question, as the PCI Council has very vague information regarding what is necessary from a security perspective, so providers don't always know how to implement solutions that satisfy the PCI requirements. That generally leaves two options –expensive and rigid solutions or good products that don't have a PCI stamp on them. Or of course, the path most people take – inaction. We all know where that leads.
Owner/CEO, BNG Team
I honestly feel that it’s irresponsible for a POS reseller to not have a professional services automation software (PSA) and RMM tool to help run their business. It’s irresponsible for these main reasons:
- I believe it’s important to proactively support your customers. Are you in the business of waiting for your customers to have issues so then you can fix their problems and then send an unexpected bill to our customer? Or do you want to proactively help your customers and fix their problems before it’s an issue that hurts their business?
- Using PSA and RMM tools is all about proactively supporting your customers before there’s an issue. I believe that business practice is better for your customer as they can budget on a monthly basis what they are spending to stay up and running, and it is making sure your interests are aligned (you don’t want things to break!). You are getting a base monthly fee, and the better you can have their technology working without issues, the more money you make per hour.
- On the business side, the POS reseller has predictable revenue to plan and forecast their business cash flow and plans for growth and investment in their company. They can afford to take educated risks because they have that forecasted revenue to spend. This also helps build a more successful business in the immediate sense which also serves as a better business where you can eventually sell one day. A huge part of selling your company is the ability to forecast the future revenue that the buyer is getting. They are essentially buying your future revenue. Having a CRM to track and report this and recurring revenue removes a lot of the guess and risk from the equation, allowing for higher multiples in the event of a sale.
To recap this: one bill for your customers with one service that’s easy to sell and easier for your customers to buy. And the reseller partner reaps the benefits, financially, because this service offering builds your business through a recurring revenue stream.
We believe a reseller partner needs to build their company with recurring revenue. It’s what you want. This is important because having a PSA tool and recurring revenue are one in the same. The partners that adopt these models will be happier because they’ll have less stress in running their businesses, with less customer attrition, while building your company for success.
Also, check out my blog post in regards to recurring revenue here:
President, North Shore Technological
We use ConnectWise (PSA) and LabTech (RMM). The PSA software does allow us to integrate several business functions, saving multiple entries and automating business processes. But … maintaining the software requires a high degree of diligence:
- There are updates that need run (on-premise version, not sure about hosted) on a regular basis, and more than once that has taken time to make other connected software work (think QuickBooks).
- Updating products, configurations, work flow rules (for example) are manual processes.
- There is a lot of management data that is available, but again, sorting through that data takes time.
I can ascribe about 20 hours per week to “tending” the ConnectWise garden across my organization (6 people total). It is an expense monthly, in our case about $400. That all being said, it is extremely valuable for tracking an issue and being able to go back to that issue later for information, to answer a question, etc. – provided that the information entered in the first place was useful. It also provides great insight into what you’ve done globally for a particular customer, across sales, service, billing, and marketing.
Our remote access and monitoring solution helps us keep tabs on the systems we are responsible for. Again, there is a steep learning curve and plenty of maintenance. The RMM uses scripts to automate processes, but those scripts take time and expertise to create or configure. You will want to designate someone to lead those efforts. Don’t forget about PCI compliance regarding remote access.
President/CEO, Tigerpaw Software
MSPs have known for years that a PSA isn’t a “nice to have,” it’s an absolute necessity. Increasing efficiency, cutting costs, and increasing margin are required in order to compete in today’s market, and you simply cannot do these things at a high level without an advanced PSA. At Tigerpaw, we focus on full business automation – think ERP for the SMB space – so that you use one system to get and keep more customers. Also, with our new Tigerpaw One offering, you can actually get everything we build and sell for as little as $30 per month per user – so cost is no longer a deciding factor on whether to embrace PSA.
VP, Brand & Corporate Marketing, ConnectWise
Our experience at ConnectWise is spot-on with the findings of the Vantiv survey, especially when it comes to the need to increase a managed services provider’s recurring revenue. Of the many reasons to build out a recurring revenue model, the two main ones are the peace of mind that comes from having a baseline of revenue each month and, maybe even more importantly, the potential increase in a company’s valuation.
Let me share an example: Not too long ago, the owner of a large U.S.-based VAR came to ConnectWise with a problem. He told us he could not sell his $50 million business because its value was being based only on its current customer list without any recognition for past sales. Although he initially turned to us for our software solutions, he soon understood that a strong company valuation would require a rethinking of his business model to one where recurring revenue would demonstrate the future value of the business.
I’d also add that different companies in different spaces are on different timelines when it comes to building out a recurring revenue-based business. Ten years ago, straight up IT solution providers were leading this charge. In the past few years, we’re seeing more retail IT (POS) companies and other sectors picking up on the trend. Because this is such an important topic, we developed a free guide for those who are thinking about transforming their businesses into one that reaps the benefits of recurring revenue. To view our “Ultimate Guide to As-a-Service” publication, check out www.ConnectWise.com/RecurringRevenue.
Senior Director of Community and Field Marketing, SolarWinds
I’m surprised RMM was such an open space. I’d be very curious as to any specific POS requirements that are there. The diversity of the market to show there was no “clear-cut” RMM wasn’t a surprise, however. I’d expect those numbers to be all over the place. Automation is a key theme with all maturing MSPs — as we see the link between maturity and standardization, I’d expect automation to play into that. You can automate so much more easily when you standardize, and those mature ones play up.
I think your blog on PSA/RMM and the channel was very insightful and accurate. Obviously, as an RMM software company, my thoughts pertain more to the RMM aspects than the PSA. Here are some thoughts and comments.
- We are not surprised by the numbers. There must be a high-level VAR/solution provider commitment to PSA and RMM software to see the results and that commitment requires a mindset change. We do not believe a company should just jump in. They need senior management/ownership to be completely behind the initiative, recognizing the deep business efficiency and customer retention benefits. Otherwise, the initiative dies on the vine as people are just too busy.
- Implementing an RMM tool can definitely be a challenge. The “headaches”/challenges mentioned by Vantiv’s reseller and ISV partners are real. But helping companies overcome those challenges is a key part of our value proposition to the POS channel. Vigilix is a software company committed to delivering the RMM tool the POS market needs, along with the services and consulting to support our reseller and ISV partner’s success.
- In your blog you specifically wrote, “If a software developer can design and successfully market an RMM tool that’s flexible yet tailored for the POS channel.” Vigilix is committed to being that company and below are some thoughts around that. I just want to make sure you are aware of our history and also our commitment to the industry and channel:
- Vigilix has been focused 100% on POS systems remote monitoring and management software space since 2008.
- Vigilix is only in the POS market, and 95% of our customer base is channel-focused (VAR and ISV) RMM software.
- Due to our commitment to the POS space, we are currently in the process of becoming a PCI-certified solution provider. In Q1 2017, Vigilix will be the only PCI audited and certified RMM provider. We are not there yet, but we will be there soon and we are 100% committed to maintaining this to help our channel partners.
- Vigilix has no hidden POS RMM template development fees and provides services around helping our reseller and ISV customers get the most out of the product as quickly as possible:
- At no additional cost to our reseller customers, we develop custom templates to securely monitor POS software and hardware systems, monitoring what you need monitored with active reporting.
- Vigilix offers customized monitoring, remote access and control, total security and CYA POS backup in a straightforward pricing structure.
- Our focus has not been features needed by a broad market. It has been features needed by this specific channel.
- Ultimately, the Vigilix RMM software provides the glue to our VAR partner’s customer relationships, making those relationships solid and allowing our VAR partners to do much more with less, more profitably.