ASCII Program Allows VARs To Resell Application Development Services
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By Elizabeth Montalbano
CRN
3:51 PM EST Fri. Feb. 06, 2004
As president of continually busy, six-person solution provider Cognetic Networks, Brian Flores can use a little extra help from time to time.
That's why Flores jumped at the chance to partake in a new program offered by The ASCII Group, Bethesda, Md. Launched in late October, the program allows ASCII Group members to resell application development services from The Jaxara Group, a solution provider in Warrenton, Va.
"It came at a time when we had this huge project [for a biotech firm] fall into our lap," Flores said from Cognetic's office in Houston. "We're so small and have 900 active clients. It can be very overwhelming at times."
The rock-bottom prices Jaxara charges for services didn't hurt, either. Because Jaxara outsources development services to an offshore development firm, Jaxara sells the services to ASCII Group's VAR community for about $30 an hour.
"Our rates are $95 an hour, so that's $60-something an hour we're making," Flores said. "That's [a] pretty huge profit."
In fact, solution providers can make 40 percent to 100 percent profit margin on Jaxara's services, depending on the client and the type of development work requested, said Daniel Boice, principal of Jaxara.
"For example, a .Net programmer can bill anywhere between $60 and $120 an hour," he said. "By having resellers utilize Jaxara, they gain access to the same level of developer expertise,but for $30 an hour."
Jaxara provides application development for the Java, Microsoft .Net, C/C++, PHP, SQL and Macromedia Cold Fusion development platforms, Boice said. Jaxara engineers never interact directly with solution providers' clients, he said.
So far, Cognetic has used Jaxara's services for help in building pieces of one project. But Flores said he was so impressed by the work,as well as the profit margins,that he expects to use the firm anytime he needs custom Java development services.
"I do most of the custom programming, but Java programming is one thing we don't have expertise in," Flores said. "It's not even worth our time to do in-house Java development anymore. It's better to use Jaxara."
Flores isn't the only solution provider who sees value in the ASCII Group's program.
According to Boice, nearly 30 companies have looked to the three-month-old program for help on a variety of projects. These range from meat-and-potatoes efforts, such as an online procurement tool and a white-box configuration device, to what has to be among the sexiest projects out there: providing code for Flash-driven Web site www.lingeriebowl.com.
The site is part of Horizon Productions' Lingerie Bowl 2004, a pay-per-view Web event that occurred during last week's Super Bowl, said Jerry Koutavas, vice president of business development at ASCII Group.
Ten of Jaxara's Sun Microsystems-certified Java developers wrote code for the complex site, which includes an online store, a chat application with queuing for a celebrity chat, a Web forum, bandwidth detection and a user-management system.
But splashy commercial projects aren't Jaxara's mainstay, Boice said. Instead, solution providers often tap his company's services for mere trouble-shooting on a range of smaller projects. That's because many VARs, although expert at providing integration services, are not necessarily skilled at selecting the right team of developers, Boice said.
In those cases, "we have completed projects that were either built wrong or left unbuilt," he said.
But the program is not just for VARs that already have a development practice,it's also an option for diversifying any provider's portfolio, Koutavas said.
Indeed, recent economic pressures have forced resellers to find new sources of income as profit margins have fallen. Reselling services from Jaxara can help VARs branch into custom application development, said Brian Faust, director of operations at Information Automation, Highstown, N.J.
"Development services open up new revenue channels and provide another mechanism to keep us close to the customer as the lead technical adviser," Faust said.