Spending on Integrated Platforms Expected to Soar
Reasons for Investment in IPSs
Last year, 37% of companies surveyed by Gartner said efficiency and reducing costs were the most important factors for investing in as-a-service platforms for the front office, compared to this year’s 34%.
New Business Models
Another reason, enabling new business models, remained the same between 2013 and 2014. 13% of respondents last year, compared to 14% of respondents this year, say that is the most important reason for solution investments for the front office.
Personalized Relationships With Customers Become Key
While efficiency and reducing costs plateaued as main factors, creating more personalized relationships with consumers and customers became a priority: last year 22% said it was the most important factor, whereas this year 29% said so.
What Ready-to-deploy IPSs Do
IPSs provide easily implemented solutions for specific problems, such as how to leverage mobile marketing for CMOs, using the latest technologies for mobile access and analytics.
Integrated OSs and Apps
The platform’s underlying infrastructure—OS, database management systems, storage, processing, networks and security—and applications and services are standardized.
Providers Supply Software and End-to-end Services
Providers offer the software platform, initial implementation, migration, hosting, maintenance and upgrades. They run the platform from a private or public cloud.
Niche Market Opportunities
The platform targets markets too small to be of interest to traditional SaaS providers and independent service vendors.
Intellectual Property
The platform includes the service provider’s intellectual property and can be combined with other independent service vendors’ tools and also enriched with third-party data sources such as Nielsen, Facebook and Google Maps.
Experimenting, Then Scaling Up
Clients can start with proof-of-concept tests and scale up according to their needs. Pricing is based on pay-per-transaction or is subscription based.
Advantages of Integrated Ready-To Deploy Services
The benefits include: Lower upfront investment, Consumption-based pricing limits risks, Quicker time-to-market and reduced implementation costs, No need to hire and train IT staff to build and develop a department, nor to maintain and upgrade the solution.
Benefits to Service Providers
The pros include: A nonlinear business model, with templates, frameworks and tools enabling extra revenue to be obtained through additional labor and increased operating margins. Outcome-based pricing and risk-sharing differentiates IPS providers from other service providers.
Challenges to Service Providers
New business models assume more risk than traditional time and materials contracts. Even though service providers seek large volumes, volume selling remains a challenge. Also, competition from traditional and emerging SaaS providers remains, but service providers offer a more holistic solution and already have clients.
