Objective:

Build a "best in class" Developer Marketplace for Next Wave Developers.  This required both understanding how they create new applications and determining what would attract them to build for our client's environment. 

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Objective:

Build a "best in class" Developer Marketplace for Next Wave Developers.  This required both understanding how they create new applications and determining what would attract them to build for our client's environment. 

Approach:

• Built a database of Next Wave web developers using a web crawling system to identify application characteristics
• Conducted interviews with over 100 next wave developers
• Created a model segmenting New Wave Developers based on their development methodology and technologies

Result:

Created a complete model of the design and development process for Next Wave applications. This model was used to design a marketplace to attract Next Wave Developers.

Edge Strategies found in a study[1] commissioned by Microsoft recently that those customers using rich email (messaging services that include group calendaring, file sharing and desktop conferencing) and other communication and collaboration services were significantly less likely to churn than customers using only basic email.

In addition, the study found that rich (Business Class) email customers are less likely to switch providers in order to obtain lower priced broadband services as compared to customers using only basic email.

Key findings include:

• Customers who use business class email and other online communication and collaboration services change providers half as often as those using basic POP/Webmail.
• SMB customers are increasingly comfortable with cable and traditional telecom service providers as a source for online services and applications; particularly those related to email, IP communication and collaboration.
• Wireless service providers are becoming increasingly accepted by SMBs as a source for acquiring online services (relative to a similar study conducted by Microsoft with Edge Strategies in 2008[2]).
• Users of basic POP/Webmail are more likely to change providers on the basis of price than those using higher value-added services.

The study also indicates that churn reduction is an evolutionary process, which requires that the service provider proves its capabilities to meet customer requirements for support and reliability at each stage of their relationship. This is necessary for them to earn the right to provide the next level of critical business service. Customers who elect to upgrade bandwidth with their service provider are themselves less likely to churn than others, and are more likely to consider acquiring additional services from that provider. Once the SMB customer is successfully using rich email, a further significant reduction in churn takes place, and the process of churn reduction continues as additional services and applications are added.

Propensity to Change Providers

In order to quantify the effects of using rich email on the likliehood of changing providers, our sample of SMBs were asked how many times they have changed providers in the past three years. We then clasified companies based on the types of email they have been using during this period and compared their switching rates. Companies not in business or using email for the full three year period were eliminated from the analysis. The findings were clear. The churn rate for those who use basic email services was 37% higher in the previous three years than the average churn rate for all broadband customers, whereas the churn rate for rich emal users was 31% below the average.

It is certainly the case that other factors come into play. For example, those who use rich email on their own servers also have a slightly (10%) lower than averge churn rate. However, many of these customers have already upgraded to premium or business class broadband, which itself demonstrates the relationship between higher service levels and churn reduction. The strongest impact on churn by far, however, is seen when a customer uses rich email provided directly by their broadband service provider. Here, the relationship between the service provider and the customer appears to take on a whole new meaning. At this point, the customer has determined that their service provider is worthy of managing critical business services and 

Reasons for Changing Providers

Another goal of the study was to specifically understand what motivates customers to change broadband providers. Again, significant differences were discovered between companies using basic email services vs. those using rich email. While most customers had several reasons for switching providers, those using rich email were much less likely to switch in order to obtain lower priced broadband services, and much more likely to switch for higher bandwidth or to get services that their previous provider did not offer.

We believe that there are several underlying reasons for the reduced churn associated with rich email use:

• Customers who chose to subscribe to rich email, communication and collaboration services have developed confidence in and are comfortable with their service providers based on past experience or recommendations from others.
• Service providers who offer rich email and collaboration services are considered more business oriented, and are more likely to be at the forefront of providing the services that the customer may need in the future.[3]

Customers who subscribe to advanced services know they are being “locked in“ to some extent, and as a result, are careful who they choose as their provider for advanced services – particularly those services and applications that may require employee education, retraining, data migrations or changes in the way they work.

Conclusion

This research offers further evidence that churn reduction for service providers is a journey that evolves with the availability and successful delivery of new services. Churn rates decline as customers move from basic email to premium broadband to rich email, and further decline as additional critical business online services and applications are added.

Service Providers therefore should strive to move customers to adopt advanced services as quickly as possible using the customers’ desire for and use of premium broadband as an indicator of both the need for these services, and a disposition to consider the service provider as a potential source. At the same time, they must develop the capacity to successfully onboarding these customers while providing a great end – to end- user experience in order to successfully realize the benefits of successful churn reduction and reduced customer acquisition costs that result from in person and online word of mouth.

For more information about the study, contact Bob Kazarian This email address is being protected from spambots. You need JavaScript enabled to view it..

Cloud Service Providers, ISVs and Technology Vendors need to build new channel programs, or adjust their current programs in order to help their partners to educate customers, and sell, implement and support their Private Cloud and Cloud Services Solutions.

Our Cloud Channel Readiness Assessment Program will help Service Providers understand the strengths and weaknesses of their current programs, and identify where to apply resources or make changes in order to achieve Best in Class status.

What are your strengths and weakness vs. Best Practice Benchmarks in each critical area of your channel strategy and program?

Does your current channel have the potential to meet your goals?  What are the capabilities gaps that need to be addressed through training or recruitment of new partners?

Are you meeting the needs of your channel to help them transform their business models?

What needs to be done to alter your program to help current partners succeed, and / or attract new partners ?

Edge Strategies will assess your current programs, make recommendations on program improvements, and test new concepts with your Partners in order to minimize risk, and insure that your channel strategy and programs are properly aligned to meet the challenges posed by rapidly changing business models, and new competiton for winning mindshare with the best and most suitable channel partners.

Edge Strategies' Cloud Channel Readiness Assessment Program is customized to address the needs and circumstance of individual  clients. By drawing on over 15 years of experience working with leading IT and Telecommunication Providers, our ongoing assessments of Channel Best Practices and our global research capabilities, Edge Strategies is able to quickly provide actionable results for IT Vendors and Service Providers looking to build best in class channel strategies and programs.  For more information, please contact This email address is being protected from spambots. You need JavaScript enabled to view it..