News & Updates

Ecosystems: A New Business Opportunity for System Integrators

By Ideas @ AppDirect / February 16, 2021

Icons representing the different components of an ecosystem floating and connecting to an AppDirect logo

For system integrators looking to not only advise clients but also create lasting change and capture the growing subscription commerce market - look no further.

AppDirect recently launched its System Integrator Partner Program to empower system integrators with the support and capabilities to guide customers through digital transformation journeys while removing the complexity of subscription commerce.

In this post, we’ll provide a rundown of the unique business opportunities for system integrators in the digital economy, both the value and challenges that ecosystems can add, and introduce how the AppDirect platform is purpose-built to solve these complex problems.

What is B2B Subscription Commerce (and Why Does it Matter)?

Subscription commerce is the practice of selling services or products to customers on a recurring basis. B2B subscription commerce allows businesses to sell their products and services in a way that’s more convenient for their enterprise customers. This can involve sending the same physical products each month to customers, providing them with new products they may not have tried otherwise, or permitting them access to digital content.

Today, 95% of companies offer at least one subscription-based product or service. 

We see B2C subscription commerce every day, from flower subscription services to subscription boxes, and streaming services like Netflix and Prime Video. However, consumers aren’t the only market for subscription commerce. The 2020s are set to become the era of B2B subscription commerce.

While public cloud offerings have made software as a service (SaaS) ubiquitous, B2B companies have not only matured the SaaS approach but are now looking at subscription models for anything that can be monetized based on value instead of ownership. That said, selling simple subscriptions to consumers for things like razors or streaming media is quite different than selling software, services, data, hardware, and more to businesses and their employees. The main feature that separates B2B subscription commerce from other subscription types is complexity. Selling, implementing, and managing recurring B2B digital products is entirely different than selling simple subscriptions to consumers.

The Pros and Cons of Ecosystems

Today, a growing number of companies are opening their technology to third-party vendors, creating ecosystems of applications that complement their core solutions. A digital ecosystem not only drives revenue but can also help companies innovate faster, gaining a huge competitive advantage. Ecosystems are ideal for B2B SaaS since many customers who subscribe to one product are often interested in complimentary services.

The benefit for end customers? A one-stop-shop for full solutions.

The platform business model creates value by facilitating exchanges between interdependent groups that solve complete business problems. The goal is to create rich ecosystems that interoperate with core products to create stickiness and value. Most companies no longer sell point solutions or try to develop everything in-house. Successful organizations are outsourcing innovation and creating rich ecosystems that interoperate with their products to create stickiness and value.

B2B subscription commerce does have its own set of complexities. Along with selling and distributing to the customer, the ongoing customer relationship needs to be fostered. A platform that supports billing, lifecycle management contractual agreements, integrated IT systems, and more must be enabled. There needs to be a streamlined customer experience backed by innovative go-to-market processes and revised operational procedures.

Subscription commerce is a different channel, and legacy GTM approaches such as selling one-time physical goods, and what many companies have in place today operationally will not work in the digital economy.

For example, billing systems don’t support subscription billing - a platform does. It’s billing + the relationship. One without the other isn’t helpful. Uber is not Uber without the app. A company can have a great subscription billing solution, but without a larger strategy and platform, its subscription commerce efforts will fall short.

Companies also need to address how to sell with a revised go-to-market approach whether it’s through direct sales, indirect channels, or value-added resellers. Many organizations have made the “if you build it, they will come” mistake. Lastly, system integrations are important for B2B subscription commerce, such as billing, CRM, payment gateways, identity, and access management. It’s a complex architecture that must function together to provide an improved customer experience.

What are the Actual Opportunities for SIs?

The first opportunity is around advisory services to help organizations define strategy and vision as they move into subscription commerce. Then the opportunity is to provide service to organizations as they move forward with implementation and integration, including project and change management services. Customers will also need services to support their day to day operations, but, most importantly, they will need ongoing guidance on growing their market and expansion of their subscription service offering.

How AppDirect Helps

System integrators like the challenge of solving complex problems. At the same time, many will suggest to a customer that they create a solution from scratch or piece together different systems to achieve their goals. So why then recommend a subscription commerce platform like AppDirect?

Using the AppDirect platform, SIs will accelerate time to revenue for your customers which will, in turn, reduce risk and increase the chance of success. The platform will easily support future use cases and unforeseen business models and will allow SIs to provide ongoing services to customers for years to come - even in the fast-changing digital economy.

Interested in a deeper exploration of the opportunities for system integrators? 

Watch our webinar with Daniel Saks, President, and Co-CEO of AppDirect, as he discusses 3 reasons why system integrators need a subscription commerce practice centered around ecosystems.

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