Cloud computing is not a new concept; the term was first coined in 2006 by then Google CEO Eric Schmidt. And this year, the worldwide public cloud services market is projected to grow 17.5% to reach $214.3 billion, up from $182.4 billion in 2018, according to Gartner.
Despite such exponential growth, many VARs and ISVs have struggled to leverage this computing paradigm for their customers. Moreover, a 2016 survey of IT pros conducted by Innotas found that 50% of cloud projects failed. If you’re a retail or hospitality VAR or ISV who’s struggled with selling cloud services, the solution may not be as daunting as you might think.
Before we delve into the solution, it’s essential to understand where the most significant obstacles occur for retail VARs and ISVs. Here are two notable ones:
- ISVs and VARs cross lanes and compete with one another. ISVs and VARs have very different skill sets. While ISVs are excellent at developing customized apps, they rarely have the expertise to deliver complementary hardware and to manage technology solutions. And although VARs can implement and manage hardware and software, they rarely have the software development skills to create customized solutions for their customers. When VARs and ISVs present themselves as “total solution providers” and compete with one another, end users often suffer from software that doesn’t meet their requirements and technology that’s not adequately supported.
- Proprietary POS SDKs limit software potential. The point of sale system is at the heart of retail and hospitality operations. To add more stickiness to their offerings, the major POS vendors offer additional functionality to their core offerings such as workforce management, customer loyalty, and analytics. But the reality is that these “one-off” apps often don’t meet customers’ needs, which largely explains the explosion of the cottage industry of ISVs building point solutions. The problem is that in the past ISVs had to get data from the POS via an SDK (software development kit) that cost thousands of dollars to acquire. Besides the initial expense, SDKs often had limited capabilities, and they required lots of software engineering to develop and maintain apps. Plus, the SDK was vendor-specific, so the ISV had to go through the process all over again if it wanted to support additional POS vendors, which made it extremely cost-prohibitive.
How VARs and ISVs can Capitalize on the Cloud Together
Today, savvy retail vendors recognize the unique strengths of VARs and ISVs, and they’re creating ecosystems that enable these companies to partner rather than compete. An excellent case in point is Epson OMS (OmniLink Merchant Services) 3.0, a SaaS-based cloud platform that supports Epson’s OMS enabled printers. So, earlier, we were talking about POS systems and customized apps, and now we’re talking about printers and cloud platforms. You may be wondering, what’s the connection? Here’s how it all fits together:
- POS printers “see” a large portion of the data that’s captured and stored in the POS. Consider a typical receipt, which includes a description of the merchandise purchased, the last four digits of the customer’s credit card, the time and location of the purchase, and more.
- The cloud acts as a repository and data processor. By cloud-enabling the printer, the data can be stored, analyzed and processed without the burden of the POS systems’ SDK restrictions.
- ISVs can focus on app development. By bypassing the POS and using the open platform standards of the cloud, ISVs can home in on developing customized applications instead of managing multiple proprietary SDKs. That means smaller ISVs—including startups—can create powerful business apps.
- VARs gain a competitive differentiator too. Because Epson vets and validates all software apps created on the OMS platform, VARs can quickly find, compare and select apps to bundle with their POS and printer hardware and to start earning recurring revenue. Additionally, the VARs own the customer relationship throughout the entire customer lifecycle — from presale and implementation through post-implementation support and billing. ISVs in the OMS community are available to provide technical assistance to VARs and the end customers, not to compete against the resellers.
Retailers and Hospitality Companies Win Big Also
Among the companies benefitting from open standards and the power of the cloud are the end users. Previously, if a retailer wanted to implement a customer loyalty program or data analytics solution, it might have to replace or upgrade its POS, which could take years. A POS receipt printer initiative, on the other hand, can be accomplished in a few weeks or months at a fraction of the price of a POS overhaul. Not only is it a cost-effective and practical decision for end users of all sizes; it’s a much easier sell for VARs and ISVs.