Why do you hate resellers?
We can see how sloppy readers might peruse our headlines (spoiler: headlines need to generate clicks or this industry wouldn’t read anything) and come to that conclusion. But if you’ve actually read our articles and come to this conclusion you’re not retaining very much of what you read.
We are not anti-reseller. We are, however, anti:
- Zero value add
- Turn the phone off at 5, call you when I call you
- Adding unnecessary costs and hoping customers don’t find out
- Can’t answer emails because I’m busy golfing
- “the internet is bad because it brings transparency”
The reseller community needs to transition itself into business advisors and consultants, recommending tools and providing value that can’t be done by an ISV remotely. That list of things is long, by the way, but the reseller must be willing to learn new skills and transition their business model. Many resellers are too lazy to do this, so they won’t.
That’s a shame because there’s a good section of the mid-market that is happy to pay for value, but they’re finding it harder and harder to get. Consolidation in the reseller and payments channels will leave us with some larger, more sophisticated last-mile service providers. These players already know we support them.
We are a long time Microsoft RMS reseller and are moving (carefully) customers over to RMH and their new multi-location platform Central. Any insights as to the health of Retail Realm?
Retail Realm is the exclusive worldwide distributor of Microsoft RMS. They’re still supporting resellers and customers using RMS but the product reaches end of life in 2021. Retail Realm is technically a backer of Retail Management Hero (RMH) but it’s a separate company. Retail Realm and RMH continue to collaborate but with distinct strategies and approaches.
For example, Retail Realm has shifted its focus to enterprise retail solutions centered around the Microsoft Dynamics ecosystem through its MAX Software Suite. This product covers a broad range of payment, mobility, and POS extension functionality. Meanwhile RMH has its own dedicated product development, sales and marketing, and product support teams. They’re more focused on store management software for SMB retailers on a worldwide basis.
Both companies are early in their development with these new strategies, by the way. Retail Realm has 70 employees on Linkedin, so it seems like they’re a going concern.
We still have some customers that buy POS on perpetual licenses (i.e. buy to own). We wondered if merchants will still be doing this in 5 years. Is SaaS just a passing trend because it seems like SaaS costs substantially more over the life of a business?
Great question but the math you’re referring to belies some of the larger issues.
Here’s the math this inquirer is thinking about. A merchant buys a 4-terminal POS system upfront for $20,000. Or, the merchant pays $600 per month for the life of the system. After 33 months it would seem the SaaS license is more expensive than purchasing the system outright.
But this is what the merchant is not accounting for.
A SaaS model entails perpetual updates to the software (we know it’s confusing because the buy-to-own model is called perpetual license too). So when there are bugs identified in the code, or when PCI exposes some new vulnerability, the SaaS software updates and fixes these issues.
In a perpetual model the merchant has to pay to get that update, and most of them won’t without a lot of harassing from their dealer. If there’s a known vulnerability and the merchant has opted to buy the software instead of rent it in a SaaS model, guess who has to deal with all their frustrations?
Just like we’d never advise the channel to pick up a customer who’s going to quibble over every dollar, we’d advise the channel to stay away from merchants who are too shortsighted to understand the reason software is sold on a recurring basis. Bruh, it’s software: stuff breaks and stuff needs fixing. If you’re cool with hackers finding holes in code and stealing your sensitive data, then by all means pick up that perpetual license.
Fortunately this behavior is driven by demographics and it’s therefore being phased out of the market. Your 30-year old merchant has grown up with as-a-service models for consuming technology (Spotify, Netflix, et. al.) while your older merchant hasn’t. As the older merchant gets out of the business what remains will be merchants who demand SaaS models for technology.
SaaS is here to stay.
Where can folks like us get better educated on understanding hospitality/retail data? We are moving from the guys you call when a printer fails to a consulting partner for business decisions and I think we need to be better at looking at that stuff.
This is a tough one to answer. Unfortunately for resellers, you’re at the whim of the ISV (i.e. POS product you’re selling). Because if the ISV doesn’t want you to gain access to the data – especially if it’s a cloud POS system – then you won’t.
ISVs should be making some version of this data available to resellers so their resellers can transition into business advisors. While we aren’t big on self-promotion, we’re the only company we’re aware of that has a prescriptive product that also comes with a mechanism to help resellers transition into such advisors. We’ve talked about this before and somewhere around 85% of all merchants that we see data from need handholding on even basic business fixes.
We also find that most resellers are totally clueless about transitioning their business models over. They can’t adequately learn the new tools to implement changes appropriately so often their merchants suffer as a result.
We probably need to run some training seminars for the POS channels where our tools are available. Expect more of this news in later 2019, but the long and short of it is that you need a compliant POS provider to unlock the data to help you help yourself. This is why closed-minded POS partners are bad for everyone in the value chain.
Catch you next time.
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