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September 19, 2023
There’s an old saying that mechanics own the worst kept car, that rusted pile of ageing junk barely functional and scarcely in working order.
A million miles away from the shiny new vehicles being repaired on the garage floor, the irony of such an analogy is not lost on a technology ecosystem now in the eye of an economic storm.
Crippled by rising business costs and slowed end-user spending, this is a market built on selling the dream of best practice yet on the issue of self-health, remains woefully off the pace. In other words, do as I say, not as I do.
“The market is always forward facing selling innovation but nobody ever looks back inside their own business,” observed Scott Frew, CEO of iasset.com.
Despite the heightened importance of reducing cost and increasing revenue for vendors, distributors and channel partners during this period of uncertainty and volatility, Frew highlighted a missed opportunity in data and automation.
“Financial hardship exposes bad businesses,” Frew warned. “Good businesses will be solid and great businesses will be innovating right now. Now is the time when you can create a real step change and get ahead of the competition.”
Prior to launching iasset.com in 2008, Frew founded a series of market-leading distributors in Australia – namely, Distribution Central (acquired by Arrow ECS in 2016), LAN Systems (acquired by Westcon Group in 2000) and Micro Networks (acquired by NetComm in 1990).
“Look back at the press during the last crisis, we refused to participate in the Global Financial Crisis at Distribution Central and tripled our growth in that year,” Frew claimed.
“When you’ve got a crisis, businesses that are fat and happy beforehand start to look for solutions and can be aggressive. Those only focused on cost cutting are never going to make it through because when that happens, you eventually cut into meat.”
Now founder of a self-funded independent software vendor (ISV) in iasset.com, Frew is speaking from the entrepreneurial trenches.
“I’ve got the same balancing act on my hands today,” he acknowledged. “It’s the first time I’ve ever had my foot on the brake as well as the accelerator but that’s because we’re building a platform and developing code.
“You have to focus on the core and slow down and speed up according to the changes you make. But either way, you have to remain aggressive.”
Realising the potential of RevTech
As a platform, iasset.com falls under the newly created category of RevTech (Revenue Technology).
This has allowed the ISV to differentiate from enterprise resource planning (ERP) and customer relationship management (CRM) offerings and address the issue of overlapping with many products but not having a direct competitor.
“Unlike traditional sales or CRM solutions, we take a holistic approach to revenue management,” Frew confirmed. “We understand that revenue generation is not just about making sales but rather nurturing relationships and maximising value throughout the entire customer lifecycle.”
Through automating complex operations, the aim is to provide businesses with a central hub for managing all revenue processes, automating manual tasks, reducing human errors and optimising workflow.
The solution also removes the entire manual sales order entry department as accepted orders are sent directly into an ERP systems, saving companies, in some cases, hundreds of thousands of dollars in cost.
“We focus on helping businesses to optimise their revenue streams, completely eliminate revenue leakage and reduce operational costs by 4:1,” Frew detailed.
Most ecosystem houses are not in currently order from a renewals perspective however. Alongside Nick Verykios as Chief Strategy Officer, Frew outlined the importance of embracing the LIPS model – Land, Invest, Protect, Surrender.
Automate as much of the net new quoting. Mirror Ray Kroc – a pioneer of the fast food industry through the global expansion of McDonald’s – and follow his approach, ‘do you want fries with that?’
Most platforms providing quotes just quote for what users want to buy – if they want to buy a bag, they sell a bag. But iasset.com allows companies to sell the bag with an accessory. This psychological play puts customers through a decision making process and can result in a 30% increase in net new revenue.
Most businesses understand that the customer should be happy with the service or solution provided, but what many fail to do, is address the customers’ needs beyond the initial sale. The secret weapon for understanding these needs is having current and accurate data.
With the right platforms in place, the data collected from the initial sale will allow businesses to anticipate customer needs, before they’re even aware of them. For subscription-based services and renewals, this is essential.
Then move onto the invest phase. Assume the entire installed base has been tracked and the business knows that a customer has purchased a bag in Victoria.
Now just send an offer. This is sales campaign rather than a marketing campaign because this is trying to hit a specific sale.
This is all about being strategically proactive. Present customers with the opportunity to further extend the usefulness of their purchases and become a trusted adviser, rather than just a reseller or service provider.
To do this, businesses need the tools to gain insights from the data collected. These insights will dissect data sets and forecast outcomes, such as closure rates, year-on-year trends and cross-filtering.
In a very competitive market, recurring revenue is not guaranteed – it must be protected it in a proactive way.
This entails automating the entire renewals process especially for subscription or consumption-based models, where churn can be monthly, weekly or even daily, which presents additional risk for lapsed renewals and unsupported / redundant assets still in use.
Leverage a platform that automatically tracks and manages the entire product lifecycle and makes it easy to identify and process renewals for all hardware, software and cloud contracts, without the need for additional headcount or complex systems.
Some resellers do not always want to renew a contract because they may have fallen out with the vendor, changed product or shifted technology strategy. That’s why knowledge is power. Whoever runs the platform has the power.
Nobody handles surrender well. Vendors seldom do a good job of broadcasting end-of-life dates and while distributors may take the products out of the system, usually the resellers and end-users remain unaware.
At some point, products need to be upgraded, replaced or transitioned into a completely different offering. The ecosystem needs to be ahead of this curve, not just for revenue forecasting but to help present the next solution to customers to remain relevant.
Having managed end-user assets throughout the entire product lifecycle, businesses are in the best position to understand their needs and assist them to innovate strategically.
Automate to accelerate
While the iasset.com business was officially launched in 2008, the first set of code was laid down in 2004, inside Distribution Central. This propelled a then nascent channel player under the direction of Frew and Verykios to evolve into one of the fastest-growing distributors on the planet.
Frew said the platform was built aligned to two core objectives – reduce cost and increase revenue.
Reduced cost was achieved through the removal of all manual processes within the business, allowing the company to automatically:
Increased revenue was generated by automatically:
Frew noted that many of the cost saving functions in the first objective also generated extra revenue. For example, just attaching vendor maintenance contracts added 30% revenue immediately.
“We had an 100% attach rate for maintenance for every vendor at Distribution Central which was unheard of in those days,” Frew recalled.
For example, almost 20 years ago, Distribution Central held 95% market share with Fortinet and Tech Pacific (now Ingram Micro) had 5% in Australia. A new country manager joined Fortinet and replaced both distributors with WhiteGold Solutions (now Exclusive Networks).
“But we had all the installed base data so we changed from running Fortinet renewals to upgrade campaigns for Palo Alto Networks,” Frew shared.
“We became the fastest growing distributor of Palo Alto Networks on the planet because we had the data. Relationships change and break down but the data is key.”
The methodology at Distribution Central via the iasset.com platform was simple. Every deal under $50,000 was automated and the renewals and expand operations was run by one employee operating the platform.
Inside sales representatives ran the relationships and quoting for deals up to approximately $100,000 and then channel account managers were involved in contracts over $100,000.
Through this approach, Frew started his final financial year at Distribution Central with 50% of company revenue guaranteed.
“I knew what my annual renewal rate was and I knew what my base looked like so I only had to find another 50% to grow,” he explained.
In short, Frew cautioned that distributors will struggle to make more money in this economic climate by simply putting prices up while acquisitions carry the risk of creating cultural mismatches.
“The only way to make more money is to become more efficient,” he stressed. “The job of a distributor is to be efficient so focus on getting the operational stuff clean.
“If someone gave me a $100 million dollars, I could set up a global distributor with a couple hundred employees. That’s all we would need to cover everything and accelerate growth.”
Looking back, Frew summarised the journey of iasset.com as 15 years of “education, building, rebuilding and rebuilding again”.
From Fortune 50 companies to small-sized resellers, iasset.com now manages over $20 billion in assets and automates billions of installed base opportunities across the world, running in 24 languages and all major currencies.
“This is the only platform designed from the ground up to support the specific complexities of global technology channels whether hardware, software or cloud,” Frew added. “All from technology built in Sydney, Australia.”
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