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Margie Manning, Tampa Bay Business Journal
January 23, 2012
We do love our apps.
In December, Apple Inc.'s (NASDAQ: AAPL) hit 18 billion downloads total on its iOS App Store while Google Inc. Android Market hit 10 billion, according to mobile marketing firm Fiksu.
This love affair with mobile apps for smartphones and tablets carries over into the business world, and Tech Data Corp. has figured out a way to capitalize on it.
The Clearwater company just opened the StreamOne Solutions Store, described by Joe Quaglia, senior vice president of U.S. marketing at Tech Data, as “the business solutions app store” for his company’s customers — the 60,000 valued-added resellers that sell the IT equipment and services Tech Data distributes on a wholesale basis.
It’s a great idea, said technology blog site ReadWrite Enterprise, quoting Gertrud Pillay, vice president at computer retailer PCMall, as saying it’s “unlike anything currently offered within the channel.”
The store was years in the making with as many as 50 people on the development team at one point, and Tech Data invested “millions of dollars” in the project, Quaglia said, although he declined to say exactly how much the company has spent.
Before the store opened, value-added resellers that wanted to sell software or cloud-based services for their customers had to plow their way through a jungle of pricing tiers and complex licensing rules and figure out how they were going to bill for the sales, Tech Data said in a statement. That limited the number of resellers willing to wade into the business and made it tougher for software producers and cloud providers to get their products to the end-user, especially small to mid-size businesses.
The StreamOne store addresses those issues, giving hundreds of thousands of independent software vendors and cloud providers a route to market. They can create their own listings inside the store where there are customer ratings on the software, advanced search features and capabilities for blogging, “a lot of the consumer-class features you would normally expect in a retail environment,” Quaglia said.
A key to the success of the StreamOne store is Tech Data’s earlier software license selector, a four-step process to help resellers find and buy the right SKU, the code used to identify each unique product or item for sale. Orders for software on techdata.com are up by 25 percent, and the company has seen a 4 percent market share increase in software sales since it was rolled out almost a year ago.
For instance, a reseller could use the software license selector to look for a specific version of Microsoft (NASDAQ: MSFT) Office for a government customer. “Once we get the order we pass it though to Microsoft through automation. They effectively create the license, and they pass it back to Tech Data, and we pass it back to the customer.”
That reduces the sales cycle from days and weeks to hours and minutes, Quaglia said.
Software sales are key to growth at Tech Data, the largest public company in the Tampa Bay area with $24 billion in annual revenue but very thin margins. The software practice currently makes up about 17 percent of the business and the company wants to grow that to 25 percent, Quaglia said.
“Software doesn’t have a lot of carrying costs so our return on capital is almost 100 percent,” he said. “It is expected by bringing in more independent software vendors and cloud providers, we will garner more gross margins and income as a result.”
Original article in the Tampa Bay Business Journal.
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