It’s no secret that companies like Time Warner Business Class Cable, Comcast and Cox communications (to name a few of the big ones) want to sell bandwidth and add-on services to your customers but now the game is changing as they move into competition with you. You knew it would, and in fact you weren’t even supervised when Best-Buy became a competitor of sorts, but did you forget that the cable companies have two things that when combined give them a distinct advantage?
- They too have the customer relationship.
- They have the money to offer SaaS direct!
I think I was surprised by those obvious two facts when I blogged about the Comcast offering of hosted Microsoft services last week. The first one I’m not threatened by, the second one I am. You see, I’ve been aggressively adding SaaS products to our portfolio and moving customers over to those services. I don’t own but one of those services (Remote Monitoring and Management Software- but am working to outsource that one as well). What is interesting about this move by Comcast is that they apparently are NOT using Microsoft’s LIVE service for this but according to a comment by Microsoft on my recent blog they have “taken advantage of the Service Provider Licensing Agreement and deployed the Solution for Hosted Messaging and Collaboration from Microsoft“.
Currently there are many SaaS providers out there you and I can resell as they don’t have the access to our customers like we do, but when the local phone and cable companies (whom my customers have some level of trust with) display the ability to compete against me in the area of MS licensing, well that gets my attention. Especially since they can do it without the middle- man costs (formerly my 30-150% margin). Comcast is in fact using the MS services as a loss leader.
So is it the end of the world for you an I? Definitely not, but the folks that I think might have more cause for concern are the SaaS providers that rely on us to resell their products. They don’t have bandwidth, VoIP, HBO and Showtime as their cash cows. My company makes money primarily off of services including integration, management and consulting whereas the SaaS providers I resell make their money off of the very services Comcast is now giving away in with 2 year ISP contract. Hmmm… Now what Vlad?
Tomorrow I will be blogging about why this is the wrong thing for the customer as well as Microsoft. Stay tuned.