Creation Application is a relatively new company to the Channel but their offering is unique. By offering bespoke white labeled app services to Channel partners they are bringing something new and exciting to the table with some pretty decent margin opportunities to boot. Here, Comms Business revisited founders Keith De Alwis and Dom Ferkin six months after they set out to see how the Channel has reacted to their proposition.
CommsBusiness (CB): You have been pushing your services to the channel for about 6 months now and we know you have had a lot of interest. How much of that interest has translated into business?
Dom Ferkin (DF): The interest has been phenomenal. We knew when we started out that there would be an appetite from the partners to add another service to their portfolio, and apps have proven that to be the case. The conversion rate is probably around the 65% mark which is fantastic and it could be more but it’s a bit of an educational piece for some partners as not everyone understand that apps are often an add on to a full software solution, which is what large companies are all looking to achieve.
CB: You said there were some pretty good margins available on your app proposition for reseller’s right at the beginning. Now you are a bit further down the road are these margins still where you thought they would be?
DF: Absolutely! Whether the partners are looking at a simple off the shelf offering or a fully bespoke software solution, margins of 45% are already being achieved and that has been exceeded in a few cases. Partners are in a very unique position to offer out a software solution because in most cases they are already selling the hardware that will hold that solution, so to offer it in tandem makes real sense for the end customer. If a partner can demonstrate how a tablet or handset solution can increase productivity by up to 80%, then being able to offer up that solution as part of the deal can reap huge margins for the partner.
CB: Can you take us through a deal(s) that you have completed with a reseller. What was the brief, the result, the aftermath, and how was the journey in between?
Keith De Alwis (KDA): One of our partners has a large insurance company for a customer. They approached the partner and asked if they could develop an app for them that would allow their customers to be able to claim for damage to their house or contents, they also wanted a loss adjustor version of the app to allow their team in the field assess any damage and report back to the office via their tablet devices. We spent time with the partner and customer doing a requirements workshop allowing us to understand what needed to be delivered. We had to integrate into all of their existing systems, and develop new ones on top to ensure each system will talk to each other in real time. Development has now been completed and they have initially launched with the loss adjustor app, and are using a select group of customers to gain feedback on their consumer version. The feedback has been fantastic, we’re incredibly proud to have been involved in such a project and the partner is extremely happy as they have managed to deliver a software solution with front end apps to a very valued customer whilst making some considerable margin in the process.
CB: What types of resellers have you been working with generally and what are they asking you for in particular?
DF: We’ve worked with a number of interesting partners, some of which fall in the traditional reseller category and others include digital media agencies. Apps have a massively broad appeal from consumer mobile versions to enterprise, so the partners that are coming forward have a variety of backgrounds. Obviously we have knowledge of the more traditional resellers and we have seen a massively positive response to the offering, but we’re always keen to hear from more. Software solutions/Apps are a must for any business over the next 2 to 3 years, and now is the time for partners to benefit from those customers who are looking to break into the app market but aren’t quite sure how to go about it. The main line of enquiries is for a software solution with a front-end app that can increase productivity, this is down to a lot of partners having large organisations as customers who need to record and report on performance, and this isn’t industry dependent, apps can really benefit every department in any industry.
Interestingly we are doing a lot in the enterprise app and business solutions area as we’ve found the type of clients the partners have don’t necessarily want their apps in the public domain.
CB: How much education is needed before resellers grasp the opportunity here? Do they understand the potential for adding this proposition into their portfolio?
KDA: There’s no doubt there is some educating required, but we have found most resellers to actually be very tech savvy. You don’t need to understand Apple X code in order to show how apps can help benefit the end customer. A lot of the time the customer actually already has the idea in their head, which is 90% of the process done, what we do is work with the partner to draw up the full requirements so they can put an offering together. If you can show ROI to the customer either through download revenue or user analytics, then the solution speaks for itself, it’s just a case of understanding the customer requirements and working with us to ensure they are delivered to the highest quality.
CB: Have you been bang on with the timing of this offering? How do you expect demand for this type of proposition to grow over the next twelve months?
KDA: Time will tell. I have to say the response has been incredible and we have definitely seen a huge appetite for partners to offer apps and software solutions. As with most industries there tends to be a ‘bubble’ and hopefully we’ve caught it at the right time, to allow partners to make up on margins they will have seen squeezed over the last couple of years through more traditional routes.
CB:You are going through a bit of restructuring right now and I know Keith is going over to Sri Lanka to oversee operations there. Can you take us through that and what that means for Creation?
DF: Our team has grown quickly and to continue to meet the demand for our resellers we also need to invest in our people and grow our development capacity. We will be looking to centralise our technical teams in Sri Lanka where we already have a development hub and Keith is moving out to Colombo to oversee this. Our commercial and operational activities will remain in the UK allowing partners to liaise directly with the team.
At first glance not all resellers are going to ‘get’ the app opportunity and Creation Application has a big educational barrier they need to get through. It does however make perfect sense to flog the solution that sits on top of the hardware you are already selling, why wouldn’t you do that?! Speaking to Dom at a recent event he mentioned that half the battle was making partners open their eyes to the opportunities right in front of them. “It’s no extra effort for the partner really and they can sell a more complete solution and make margin on top, we just need to make sure they grab the opportunities sitting front of them,” said Ferkin.
For more information please visit www.creationapplication.com