PARTNER IMPLICATIONS

Turnover Decreasing

Decrease in turnover due to the missed selling of licenses in favor of subscription contracts

More Services Than Licenses

Decrease in the profitability due to a business based on services instead of product licenses.

ICT TREND - #1

CONTRACT MODELS BASED ON SUBSCRIPTION

The number of acquisitions among CAD software providers are increasing and so both the shifting from license-based to subscription-based models, and the transition from 2D CAD to 3D CAD software. Those are the key trends observed in the CAD software market in the recent years. Software companies are acquiring specific-design software solution providers to increase both their offerings and their product’s user base. With the increase of acquisitions, design software solution providers are also enhancing their expertise to cater to larger and more complex business needs in terms of products and services.

The majority of PLM vendors are focusing on improving their cloud PLM value proposition with subscription-based pricing. This trend is expected to play a crucial role in improving the penetration rate in the small and mid-sized businesses (SMBs) and overall market growth of PLM solution during the forecasted years of 2018-2023. Cloud PLM solution reduces/eliminates the users’ primary challenges related to implementation, customization, software upgrades, and higher licensing costs.

ICT TREND - #2

CUSTOMER & VAR LOCK-IN STRATEGIES

The Customer lock-in is a strategy in which the customer is so dependent on a vendor for products and services that the customer cannot move to another vendor without substantial switching costs, real and/
or perceived. Switching costs and therefore customer retention and lock-in effects increase when users enter or collect information, build up a network or invest time in the service over time.

At the same way, if the VAR binds himself to the same interlocutor also for the years to come, it could be established a monopoly situation; in which the availability and the interest of the parent company to always guarantee to the VAR the best possible conditions would be considerably reduced by the absence of a real competition and as a result of customer lock- in.

Moreover, even the possibility of benefiting from technical advances – particularly disruptive in the rapidly obsolescent sectors such as the IT sector – could be strongly compromised when there is only one supplier to whom it could turn.

PARTNER IMPLICATIONS

Weak VAR position

Weak position of the VAR compared to the Vendor related to business conditions.

Product Obsolescense

If the VAR embraces a single brand there could be the risk of obsolescence of its portfolio if the vendor is not sufficiently far- sighted.

PARTNER IMPLICATIONS

Var Ousting

Var ousting from pre-sales consulting activities and sales processes.

Standard Service Provisioning

The services provided are crushed to aftersales support rather than VAR’s consultancy expertise.

ICT TREND - #3

E-COMMERCE B2B

Integrating online direct sales channels with conventional indirect channels to create a “seamless” experience for customer is ideal in theory, it is difficult in practice. The adoption of e-commerce by a Vendor is often influenced by its willingness to handle sales in traditional indirect sales channels.
Internet channel conflict is defined as “a conflict that occurs when automated b2b purchasing processes compete against the indirect channel network when selling to the same markets”.

Would you like to play a leading role on digital transformation customer projects?

Without RuleDesigner

The VAR is now weakened in its figure of value-added consultant so it can be eliminated in favor of a centralized management of aftersales services.

With RuleDesigner

RuleDesigner allows you to maintain and strenghten the relation with your customers because, thanks to its complementary, it adds value to the solutions you already have in your portfolio acting as a differentiator with respect to other suppliers.

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