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CRM Leads The Pack
How to succeed in business software is top of mind for so many solution providers primarily because so many have built all or part of their business around it. More than 78 percent of the 254 small, midsize and large VARs that participated in the survey already sell or recommend business software products or services, including ERP, CRM, supply chain management, product life-cycle management, accounting/finance or analytical applications. The survey also found that more than 36 percent of all respondents (including those that do and those that do not already sell business applications) plan to add business software products and/or services to their portfolio in the next 12 months, while nearly 48 percent are considering doing so.
CRM software is the most popular business application with 59.1 percent of the surveyed solution providers selling CRM applications and related services. That was followed closely by accounting/finance/analytics applications sold by 54.7 percent of those surveyed. Fewer solution providers work with ERP (32.5 percent), supply chain management (24.6 percent) and product life-cycle management applications (14.3 percent)—all of which tend to be less of an SMB play.
Even companies that start out far afield of business software often eventually find their way to this lucrative area. Take Spinnaker Network Solutions, an Irvine, Calif., solution provider that, despite its name and original business of building LANs and WANs, has for 10 years now focused almost exclusively on CRM and sales-force-automation applications. A longtime reseller of Sage's SalesLogix software, Spinnaker began reselling Microsoft's Dynamics CRM 18 months ago and the product already accounts for 40 percent of the company's sales and 90 percent of its new business. The company plans to expand by offering Microsoft's Dynamics CRM Live on-demand service once it becomes available next year. "The on-demand model is gaining a lot of ground with Microsoft coming into that market," says Spinnaker President Mitchell Cannady.
Solution providers, of course, also recognize that selling, implementing and servicing business applications is very different from installing a PC LAN. In the survey nearly 46 percent of respondents cited what they see as the high price of business applications as a major obstacle to working with business software. That was followed closely by the time and expense of training and certifying staff, difficulties in hiring experienced staff, and the complexities of integrating business applications with other information technology.
For example, Stenstrom Group, an Olympia, Wash., solution provider, resells project management apps from Primavera Systems, mostly to the construction industry. But an effort to expand into CRM apps by reselling SalesLogix some years back didn't pan out. Part of the problem was a lack of expertise among staffers, acknowledges President and CEO Mark Stenstrom, although issues surrounding Sage's acquisition of SalesLogix at the time also created problems. Stenstrom remains open to expanding into other business application areas that complement project management, and his company might add on-demand project management software to its repertoire. "That definitely appears to be where things are going and where people want to go," he says.