P3DS - A Cloud-based Platform for Professional Services Firms
1. A Cloud-based Platform for
Professional Services Firms
Professional services firms should embrace a cloud-based platform to
deliver software-as-a-service (“SaaS”) applications to help elevate their
technology-enabled professional services for the small to medium-sized
business (“SMB”) market above the crowd.
Herein, we explore opportunities for professional services firms to offer cloud-based SaaS enabled
professional services to their base of SMB customers. In addition to discussing the growth of the
multi-billion market for cloud services, we specifically detail how SMBs are among the most eager
adopters of cloud-based SaaS applications, and why using a cloud-based platform to deliver these
SaaS applications to SMBs is a natural fit for the professional services firms. With a SaaS
applications marketplace, professional services firms can realize new revenue streams and reduce
customer churn, among other benefits.
While the cloud opportunity is attractive, professional services firms also face many obstacles to
reselling cloud-based SaaS applications. We identify these challenges, including the costs
associated with launching a cloud-based platform, such as developing a complex software
aggregation platform and infrastructure deployment, as well as customer support, sales, and
marketing considerations.
Further, we evaluate why turning to a third-party platform provider can enable professional services
firms to seize the SMB market opportunity effectively. Therefore, allowing technology-enabled
professional services firms to go to market quickly while significantly lowering costs.
The SaaS applications revenue prize is large, but the obstacles to winning it are just as big. Besides
the fact that business processes and billing / delivery systems used by professional services firms
are not geared to handle cloud-based SaaS applications, the SaaS applications involves a very
different set of economics for third-party resellers. Finally, we expose typical challenges professional
services firms face gearing up to target this space, as well as how working with a third-party platform
provider can be a vastly superior strategy to the traditional do-it-yourself approach.
The Growing Cloud-based Services Industry
When it comes to IT resources, small businesses are notoriously understaffed. Cloud-based SaaS
applications mitigate this resource issue to some extent. To understand why, it helps to think about
how a cloud-based SaaS application works. SaaS applications delivered via the cloud are always
up to date, so all new and existing employees have the same version of the software. Computer
hardware and operating systems are also irrelevant, since the SaaS applications all run through
standard Internet browsers. This means that off-site employees can access information anywhere,
on any browser-equipped device, without the company needing IT staff to set up virtual private
network (VPN) connections.
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In addition, all data is stored in secure data centers in the cloud rather than on user desktops–an
important feature considering many small businesses do not regularly backup their data to remote
locations or have sufficient firewall safeguards. Expense reduction is also seen as a key benefit
because SaaS applications are purchased on a per user basis and billed monthly, simplifying cash
flow management and expense forecasting.
Given these advantages, it should come as no surprise that SMBs are aggressively adopting
technology-enabled professional services along with SaaS applications. An estimated 61 percent of
SMBs use cloud-based software today4, and small business spending on cloud solutions will grow
by almost 20 percent over the next five years.1 In fact, the cloud is now the preferred way for SMBs
to acquire SaaS applications, with 43 percent selecting cloud-based solutions, as opposed to 23
percent that prefer to buy on premise solutions.2
On the surface, these trends can be seen in the SaaS applications that SMBs already turn to on an
everyday basis. As an example, Google estimates that five million businesses use its Google Apps
suite, which includes email, calendaring, and other office tools.3 Also, Microsoft announced that the
cloud-based SaaS version of its flagship productivity suite, Office 365, reached one million
subscribers in 100 days, faster than Dropbox and Facebook. Microsoft’s numbers translate to an
average of more than one Office 365 subscription sold every second over three and a half months.4
All of these numbers are great news for professional services firms willing to embrace a cloud-based
platform to deliver SaaS applications to help elevate their technology-enabled professional services
for the SMB market above the crowd.
The SaaS Opportunity
SaaS offers professional services firms’ a new revenue stream. There is a large and growing volume
of SaaS applications already available in the marketplace today. However, SMBs often have
difficulty finding them, or need to turn to multiple providers for multiple solutions (which, of course,
can create multiple invoices and accounting headaches).
To complicate matters, the SaaS applications market is very fragmented across a large spectrum of
SaaS solutions. This is true across type—such as customer relationship management (CRM),
accounting, or project management—as well as target industry, including financial services,
healthcare, legal, non-profits, etc.
This is where professional services firms come in. They are well positioned to identify the right SaaS
applications and serve as a one-stop shop for cloud-based SaaS solutions which provide greater
collaboration and efficiency for their existing professional services, a convenience many SMBs are
actively seeking out. In fact, 69 percent of SMBs prefer to purchase their SaaS applications from a
single trusted vendor.5 Professional services firms already have the customer trust and awareness
to become the cloud-based SaaS application provider of choice for their SMB customer bases.
A cloud-based platform embraced by technology-enabled professional services firms will further
differentiate the trusted business advisor from the crowd in the SMB market during the coming
decades.
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Components of a Cloud-based Platform
Building a successful cloud-based platform involves much more than a great looking website and
shopping cart functionality. If all a cloud-based platform does is enable SaaS application purchases,
then it has missed the true opportunity that the cloud offers.
Here are the key components that a robust cloud-based platform should include:
Directory / Search / Compare
Syndication Process
Reseller Website Login
Identity Management (Single Sign-On)
Subscription Management
SaaS Application Management
Data Integration
User / Role Management
Billing / Settlement Engine
Client / User Support
Directory / Search / Compare
Ultimately, the goal of any cloud-based platform is a rich catalog of relevant SaaS applications for
business users. However, SMBs will still need help selecting which SaaS applications are right for
their companies. Consequently, robust directory services, such as ratings and feedback, are critical
tools to help small business customers navigate through these SaaS solutions, some of which may
be unfamiliar to them. Guidance from professional services firms is immeasurable as well.
Syndication Process
In terms of cloud-based platforms, syndication is the process of identifying, certifying, contracting,
and integrating SaaS applications into the cloud-based platform. Given the importance of a building
a robust catalog of SaaS applications, establishing this process is paramount. Unless the cloud-
based platform includes a built-in syndication process, responsibility for selecting and productizing
potentially hundreds of apps falls squarely on the cloud-based platform operator. Software and
infrastructure need to be validated and user support levels verified, both of which are complex
processes. Then, agreeing on margin and other contract terms can also be a lengthy process, one
that must occur before integration into the cloud-based platform can even begin. Professional
services firms that try to handle these components on their own require significant product
management and legal resources.
Reseller Website Login
Professional services firms already have familiar websites through which their customers access
various information from time to time. A cloud-based platform should provide an embedded portal
login for the professional services firms’ website to provide continuity for their customers.
Identity Management (Single Sign-On)
One advantage of subscribing to SaaS applications through an application aggregator, such as a
cloud-based platform provider, is the ability for customers to log in once to access all of their
applications. Not having to remember multiple IDs or passwords is a tremendous value to end users.
Typically, this type of seamless experience is not possible with individual SaaS application
purchases.
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Subscription Management
Administrators require the ability to manage subscriptions. Many SaaS solutions offer a 30-day free
trial to encourage adoption. Therefore, the ability to cancel application subscriptions before a free
trial expires is important. In addition, administrators need to be able to upgrade or downgrade
application editions depending on the features required by their organization. Finally, the ability to
review invoice and payment history is a standard requirement.
SaaS Application Management
For SMBs using a cloud-based platform, SaaS application management is critical. For example,
when a new employee has just been hired, the administrator needs the ability to quickly identify the
SaaS applications the new employee needs. In some cases, a new SaaS application will be
available directly from an independent software developer prior to it becoming available on a cloud-
based platform. Therefore, the ability to “import” subscriptions that were purchased prior to cloud-
based platform availability is critical. This way, administrators can manage them like any other SaaS
application or subscription purchased via the cloud-based platform.
Data Integration
Ultimately, SMBs want to use SaaS applications that can work together. In the simplest terms, this
means the output from one SaaS application (e.g., an accounting application) can become the input
for another (e.g., a CRM application). This level of data integration may prove the most challenging
for cloud-based platform operators because it requires significant support from independent software
vendors. Thankfully, independent software developers have already identified this as a critical
component of SaaS application adoption. Many are creating APIs (application programming
interfaces) that enable applications to share data seamlessly.
The cloud-based platform operator can play a key role in this process by acting as an integration
evangelist and promoting integration as a priority with its independent software developer partners.
Operators that can demonstrate strong SaaS adoption and high user volume will be in the strongest
position to establish standards for independent software developers.
User / Role Management
Most SaaS applications targeted to the SMB market do not require IT involvement. However,
organizations that purchase SaaS applications through a cloud-based platform may still want to
appoint an administrator. This individual—or group of individuals depending on the size of
business—will be responsible for managing users / roles, SaaS applications, and subscriptions.
Administrators need one view across all users and roles, which should be easy to search and sort.
They need to be able to quickly drill down to individual users and get detailed user, role, and SaaS
application assignment information to facilitate quick administrative action. Moreover, they should
be able to automatically import users from a variety of directories and SaaS applications in order to
accelerate deployment.
In addition, administrators must be able to easily select users along with one or more SaaS
applications and then automatically provision the necessary accounts and access to the targeted
users. This process should be available to roles so that the SaaS application assignments happen
automatically when users are added to a role. Because of the security and business impact on the
customer, administrators need the ability to revoke SaaS application access when necessary. This
includes centralized de-provisioning to automate the end-to-end process and workflow, including a
complete audit trail.
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Billing / Settlement Engine
Cloud-based platforms need to be able to manage credit card and other electronic billing / purchasing
formats. For the best customer experience, professional services firms should connect cloud-based
platform billing to their current legacy billing systems. A single bill that includes multiple SaaS
applications plus traditional professional services, gives customers one view of their technology
purchases and makes handling invoices easier.
Client / User Support
Developing a cloud-based platform is not just about technology; a complete cloud-based platform
also addresses user support. While independent software vendors typically provide some level of
support for their individual software (although in many cases this is limited to FAQs and email), the
cloud-based platform itself—particularly the administrator functionality—require cloud-based
platform operators to provide user support as well.
Best practice cloud-based platforms make it clear where users can obtain support for individual SaaS
applications, as well as the cloud-based platform itself. In addition, support staff must have the
necessary training and resources to be able to answer basic questions and quickly redirect
customers to an independent software vendor’s support resources if the independent software
vendor is better equipped to handle the issue.
Challenges for Cloud-based Platform Providers
As the central hub for SaaS application aggregation and management, cloud-based platform
providers face unique challenges when it comes to launching and operating SaaS application
marketplaces. The most important of these are detailed below.
Margin and Return
Reselling cloud-based SaaS applications involves a very different set of economics than on premise-
based independent software vendors are used to. The current market has embraced a model where
SaaS application developers are retaining approximately 60 to 70 percent of the available SaaS
revenue while sharing 40 to 30 percent with cloud-based sales channel.
The economics are different in a cloud-based platform model. In this model, delivery costs and
marketing expenses replace high-transaction costs associated with traditional on premise software
deployment models. Clearly, these expenses are ongoing investments. Cloud-based platform
providers incur all of the delivery costs and most of the marketing expenses for SaaS applications.
Hence, the sales channel revenue share previously noted is typically shared equally between the
cloud-based platform provider and the reseller professional services firms.
Fragmentation and Material Demand
The SaaS market is growing rapidly, but it is also very fragmented across different categories of
SaaS applications. Beyond accounting, payroll, and office suite applications, business software
needs are varied and diverse. To overcome this fragmentation and capture material revenue, cloud-
based platform providers need to offer a meaningful catalog of SaaS applications across necessary
business functions. As such, it is extremely difficult for cloud-based platform operators to sign up
independent software vendors one by one. In fact, it could take cloud-based platform providers
several years to build up sufficient SaaS software inventory to become a worthwhile destination for
professional services firms.
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Customer Support
Customer support training costs for cloud-based platform services can be high, because all support
staff need to be trained, or a special, small queue must be established, an approach that offers poor
economies of scale. In either case, retraining is usually required due to low call volume levels during
initial introduction and ramp up.
The P3 Data Systems Platform: A Console-as-a-Service
(“CaaS”) Solution for SaaS Application Deployment
P3 Data Systems, a leading cloud-based platform company, has developed a streamlined approach
for professional services firms looking to launch a cloud-based multi-tenant console targeting SMBs.
With its advanced platform, P3 Data Systems has taken every aspect of a SaaS multi-tenant console
operation—including identity management, billing, SaaS application integration and syndication,
customer support, and more—and transformed them into a CaaS solution. This is good news for
professional services firms, since it means they can launch a sophisticated, user-friendly multi-tenant
console marketplace and begin to enjoy the full benefits of cloud-based client collaboration almost
immediately.
No Capex Investment Required
From the professional services firms’ standpoint, one of the most appealing aspects of the P3 Data
Systems CaaS model is its payment structure. Like other cloud computing services, the P3 Data
Systems platform has a monthly licensing fee schedule. There are no upfront capex costs because
there is no development work on the part of the professional services firms. Even better, the costs
to operate the CaaS are variable based on tenant and user volume. In addition, because syndication
is handled by P3 Data Systems, a minimal number of marketing staff is required.
High-End Customer Portal Experience
The P3 Data Systems platform-powered consoles feature state-of-the-art functionality for the best
customer, independent software developer, and administrator experience possible. During the
integration process, P3 Data Systems requires the use of standard templates across every
independent software vendor to help ensure that application descriptions, pricing, free trials, fact
sheets, videos, comparisons, and other materials are all consistent. In addition, each SaaS console
comes equipped with a feedback engine that allows users to rate and comment on SaaS applications
they have purchased within guidelines defined by the professional services firm.
Ninety Days to a Robust, Fully Branded Console
The P3 Data Systems platform allows professional services firms to go to market quickly with a high-
end CaaS marketplace that can be customized to suit the unique needs of each customer. The P3
Data Systems cloud-based platform also encompasses the syndication process, which means
professional services firms can launch with a large selection of relevant SaaS applications—which
specifically support the traditional professional services offerings of the firm—on day one, instead of
spending 12 to 24 months building an inventory of SaaS applications on their own.
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No Staffing or Training Headaches
With P3 Data Systems, spending money on expensive customer support training is no longer an
issue. Customer support operations are available as part of the professional services firm’s monthly
fee schedule. This ensures a fully trained and cost-effective staffing solution since costs are
amortized over multiple P3 Data Systems CaaS partners. It can also offer peace of mind, since
professional services firms can be confident that there is sufficient support staff to handle
unpredictable spikes in volume that can come with the launch of a new service.
In short, P3 Data Systems enables professional services firms to focus on generating traffic and
sales, rather than corralling independent software developers, customer support staff, legal
resources, and marketing teams.
Conclusion
Professional services firms are searching for ways to augment their revenue stream by embracing
value-added services in support of cloud-based SaaS applications. In particular, these professional
services firms are looking to take advantage of the opportunity to launch cloud-based marketplaces
to resell relevant SaaS applications. With a P3 Data Systems CaaS approach, professional services
firms can avoid obstacles and enter the space quickly with as little risk as possible.
P3 Data Systems is in a great position to offer professional services firms an immediate CaaS
opportunity without the developmental and operational challenges normally associated with new
product launches. This enables professional services firms to focus on what’s more important—
generating revenue and becoming leaders in the cloud industry; and yes, to elevate their technology-
enabled professional services above the crowd.
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1 Cloud Computing in the Midmarket: Assessing the Options in 2013, IDC, 2013
2 SMEs: Equipped to Compete: How SMEs can grow in a changing global marketplace, Oxford
Economics, June 2013
3 http://www.google.com/intx/en/enterprise/apps/business/
4 techradar.com, "Microsoft's Office 365 Home Premium races past one million users," by
Kane Fulton, May 31st, 2013
5 Small and Medium Business Cloud Application Trends Survey, Techaisle/Dell, 2012