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Selling Hosted Applications

By TelcoFebruary, 2007May 21st, 20242 min read

A couple of recent news items have me thinking about a possible further trend in bundling. Those Masters of the Universe at Google (mental note: write another piece about how they have changed the world) are going into the business of selling office-type applications through their Google Apps portal (also here). Are Microsoft shaking in their boots? Hard to tell.

They already have ways of selling their applications on a hosted basis. The guys at Macquarie Telecom are using their hosting division to sell Exchange (also here). The hosted Exchange is a fantastic product – running an Exchange installation yourself, together with spam protection, and perhaps support for push e-mail to Blackberry or similar devices, is a lot of effort. So it naturally lends itself to be done on a hosted basis.

But can they extend this to the rest of the Office suite so as not to lose market share to Google? That remains to be seen. Consider that the Google applications are built “from the ground up” to be internet-based. On the other hand, having what is traditionally a stand-alone desktop application available on the web means you must be connected to use it. If your internet connection is down, you are toast. This will be an interesting space to watch.

Billing Bureau has been in the business of selling hosted applications for over ten years. However, we do this with a vertical market application, to a relatively small number of users.

The big question is: will vendors offer hosted applications on a “white-label” basis through resellers who have direct access to customers? Resellers can add value by providing a local face and support, so that customers don’t feel they are a drop in the ocean. They can also benefit from bundling applications with other services, or enhancing them with add-ons for specific industries. Is there enough margin in this for resellers? Probably, but only if the vendors see value in what a reseller can add.

This was also posted at [Billing Bureau].

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