If there's a dream contract in the technology business, it's got to be one in which the customer can see the value...
immediately, the margins are good for the reseller, and the amount of effort required of both user and reseller is minimal.
Of course, it often makes the relationship easier when both the vendor and the value-added reseller (VAR) involved are, essentially, selling IT services built and maintained by someone else.
iPass, Inc. in Redwood Shores, Calif. Actually bills itself as a vendor of secure Internet, remote access and wireless broadband systems. Its stock in trade, however, is a network of contracts it has worked out with more than 300 telecommunications companies in 160 countries.
The virtual network it has built consists of more than 50,000 access points, any of which an iPass customer can use to send encrypted authentication information to one of 10 iPass global service centers and on to their home networks.
For the last eight years Toronto VAR iRoam Mobile Solutions, Inc. has been reselling the access service that connects all those carriers, with very few bumps, according to Joseph Vida, director of sales and marketing at iRoam.
Resellers set the margins, and the margins are fat – often above 20%, Vida said.
But that doesn't translate to a cost that would choke the end-user customer.
"The access service is one number, and we do it on a per-user, per-month basis," Vida said. "It starts out around $4 per user for about 200 users, plus whatever extra services on top of that."
Palliser Furniture, Ltd., the largest furniture maker in Canada and a heavy user of remote-access, bought the service not only for the price, but for the per-month billing as well, according to Jason Bergeron, the company's director of technology.
"With [previous carrier] AT&T, you paid a flat fee of about $40 for everyone you put on the system," Bergeron said. "So I was on the system, but I only travel about four times a year; I didn't even need the dial-up in most cases. But it still cost us $40 a month for me to have it available if I needed it."
Palliser has more than 4,000 employees and a salesforce that is 100% mobile. Buyers and salespeople spend their time visiting with overseas customers, touring manufacturing plants and suppliers in Europe and Asia, and e-mailing relentlessly from wherever they go.
"But if I'm not traveling, I don't have to be on the service. When I am, then we pay for it for that month; but it's not much," Bergeron said.
The iPass service dropped Bergeron's bill for that access from $4,000 per month to $1,300.
It also reduced calls to the 13-person help desk that occupies up half of Bergeron's IT staff. The AT&T service required different passwords than those employees used internally, and they expired regularly. Employees who hadn't traveled for a while, or who traveled rarely, often found themselves overseas, stuck without e-mail because they couldn't remember the password.
The system's been under development since 1996, when iPass was launched as a dial-through remote-access provider, according to Joan Fazio Direactor of product marketing at Ipass.
The central part of the business – making connections with as many Internet Service Providers as possible – hasn't changed since then, though the connections used by the end customers have evolved from slow modem links to hotel-room Ethernet and more than 62,000 WiFi hot spots.
The iPass client on a customer's laptop ha s aphone book with all the dial-up and hotspot location information, and the ability to handle encrypted authentication transparently, she said.
The iPass service uses the same passwords employees use on the internal network, and updates its own lists frequently, so that a user who changes a password doesn't have to remember the old one in order to sign on.
Installation and training of the system was dead easy, Bergeron said. He can remotely install an identical image of the iPass client software on every laptop, and let each client application update the iPass phonebook as it becomes available.
With AT&T's client, IT staffers had to touch each machine to install the software, set the passwords and configure the modems.
So, once the sale was made, there was very little technical work and very little ongoing training for iRoam to do, Vida said.
Other iPass security products are a little more complex, but implementing the remote-access part only requires installing a client and letting end users do what they need to do.
iPass is able to stay flexible and keep its prices down partly because it has minimal responsibility for maintaining the network. It exists to negotiate and implement connection agreements, not networks, Fazio said.
About half of iPass' business comes from VARs and resellers, Fazio said, and uses the ease-of-install as a selling point to the channel.
But the company also works hard to keep the channel happy, Vida said. "They do have a direct sales force, but we actively engage them with opportunities, as well as with the iPass channel team. There's little to no conflict."
Working with on end-user contracts with telcos is a little more difficult than working with VARs, Fazio said. "Telcos have a lock on the customer, so we're not going to be able to knock on that door directly," she said.
But the vast majority of iPass' dealings with telcos involves pass-through connections, not joint sales.
From the VAR or customers' point of view, though, the whole process is transparent.
"On the billing side – at the end of the month they get a bill according to the amount of time they've used the networks," Fazio said. "We take all that plumbing and put the same interface on it. So your experience is the same whether you're dialing in from Beijing or through WiFi in London, or from home."