Description
Odd Magne Vea (left) and Hans Peter Bech
Podcast
Transcript:
Hans Peter
Today we are recording from Stavanger in Norway, and it’s my pleasure to welcome Odd Magne Vea from Norwegian Jakob Hatteland Computer AS. Odd is Chief Sales Officer for Rambase, Hatteland’s ERP offering.
Odd Magne Vea
Thanks for having me.
Hans Peter Bech
My pleasure.
Rambase is a cloud-based ERP system for high-tech and electronics manufacturing, metal fabrication, industrial machinery, and equipment, automotive, high-tech and electronics distribution, wholesale distribution, auction, aquaculture, and oil & gas.
Did I get that right?
Odd Magne Vea
Yes, Rambase is Hatteland’s multi-tenant ERP solution offered on a subscription basis for customers in the verticals that you mentioned. An easier way of putting it is that we say that RamBase is for industries that produce and sell stuff and are above average interested in quality, documentation, and traceability.
Hans Peter Bech
Right, your shorter version may be easier to remember.
Today we are mainly going to talk about the business opportunity you offer resellers. However, as many of those who watch this video may be new to Rambase, I suggest you start by briefly telling us what makes Rambase the better alternative for companies in the industries that you target?
Odd Magne Vea
The answer to why Rambase is the better alternative obviously depends on the customers’ preferences compared to the various formats offered by the ERP vendors.
In the ERP industry, we have two main delivery formats: The platform format and the industry-specific format.
The platform format, where Microsoft is the leading supplier, leaves it to their business partners to adapt the software for specific industries. Microsoft offers a generic product platform, and its partners refine it for various industries and customers.
With the industry-specific format, that we use, we have chosen the vertical market segments that our software will support and only ask our partners to customise and implement it for the individual customer.
For those industries segments that we support, our software should be closer to the customers’ requirements than the platform products. Customers can rely on us, the original software developer, to keep the software up to date to match their current and future requirements. Our main strategy is that for the different micro verticals we target, RamBase is going to have the functionality and process depth to be at the same level as to so-called best of breed solutions.
Hans Peter Bech
As I mentioned before the main subject of our conversation today is your partner program, but before we dig into the details, I would like to ask why you have chosen the indirect go-to-market approach in the first place? Why don’t you just serve the customers directly?
Odd Magne Vea
The short answer is that there already is an established channel serving the types of customers we target. We consider using this channel to be a more cost-efficient approach for us, the partners and for the customers.
And let me explain why we believe so.
You see, although ERP as an acronym wasn’t coined until the Gartner Group first introduced it in the 1990s, such software was introduced from the 1960s and onwards. With the introduction of the minicomputer in the 1970s and the PC in the1980s, ERP proliferated into all business segments.
Today the market has matured and is well organised into three segments:
- SoHo which stands for Small Office – Home Office
- The Mid Market and
- The Enterprise Market
ERP software for the SoHo segment is sold directly. There is no need for a reseller channel between the customers and the software vendor.
ERP for the enterprise market is also primarily sold and implemented by the software vendors themselves sometimes helped by systems integrators and implementation partners. In this segment, there are only a few projects each year and they are too strategic for the vendors to leave to channel partners.
ERP for the mid-market, however, is served by a well-established Value-Added Reseller Channel. Rambase is a mid-market product and if we were to build the capacity to serve our customers directly then we would have to recruit staff from those resellers.
That would obviously require a different type of organisation on our behalf, and we have come to the conclusion that it is better for us to sign up and work with those partners than to recruit their staff. We have therefore designed an attractive value proposition for the partners that are interested in working with us.
Finally, I also want to say that we admire the competency and experience that sits in the indirect channel. These are companies with a long history of delivering to a specific vertical and often a geographical area. They know the industry needs and the local industry habits.
Hans Peter Bech
Very well. We’ll get back to the partner value proposition later in the interview.
What I heard you say earlier in the interview is that for the industry segments that you serve, your software is closer to the needs of the customers. Is that correctly understood?
Odd Magne Vea
Yes, and we believe that our offering is more attractive for customers in those industries since it makes Rambase faster to implement. With our software, the implementation for customers in the segments that we serve will be faster, less expensive, and less risky.
Hans Peter Bech
OK, let’s assume you are right, doesn’t that make your partner value proposition less attractive?
Let me elaborate on this.
Resellers of ERP software make their money on the extensions that they can add in terms of modules, customisation, integration, implementation, training and so on. It sounds to me that those elements are richer with a platform product such as Microsoft’s than with an industry-specific format such as Rambase?
Odd Mange Vea
Yes, you are absolutely right.
BUT!
Our objective is not to make a partner attractive product at the expense of our customers.
Our objective is to make a customer attractive product. To do so we have chosen industry segments that we thoroughly understand and by reading into our history and background you will see where this expertise originates. We have then designed a program that makes it attractive for our partners to serve our customers with this value proposition.
And there are at least two different ways of succeeding in this for the partners. They can focus on standardised solutions and go for speed and volume. Or they can focus on delivering more services around the RamBase ERP system. Like, integration services, modifications, or even accounting or other advisory services.
Hans Peter Bech
OK, so what I hear you say is, that the value-adding elements for your partners are just as attractive as those offered by the platform partners. Did I get that right?
Odd Mange Vea
Yes.
There may not be so much need for developing core functionality, which is something the customers will appreciate. But services such as consulting or process optimisation, integration, customisation, training, and ongoing support are always required and offer the partners attractive opportunities for delivering professional services.
Hans Peter Bech
Let’s face the brutal facts. You may have a great product, but you are the new kid on the block, and you are hardly a recognised brand even with the potential customers in your key segments. How can you then be attractive for the ERP channel?
Odd Magne Vea
Our ambition is not to be attractive to all partners. As we do not offer a generic platform product we will never have as many partners as for instance Microsoft.
But we are not as unknown as you indicate.
To boast a little bit, we have already been recognised twice with an honourable mention in Gartner’s Magical quadrant for product-centric cloud ERP. So, we are being recognised.
On the other hand, the fact that we are the new kid on the block actually makes us attractive to a certain segment of the ERP reseller channel.
Let me explain why that is the case.
The shift in customer demand from on-premises and single-tenant solutions to cloud, multi-tenant and Software-as-a-Service has opened up the market.
Twenty years ago, most of us thought that the ERP market was consolidating. Microsoft acquired Great Plains and Navision, Infor was born by acquiring multiple ERP systems and SAP bought TopManage to prepare their Business One solution for the mid-market.
But cloud technology and the SaaS format opened the door for new vendors, and they flooded into the market. Rambase is one of them. We are a true public cloud multi-tenant ERP solution for specific vertical market segments. The demand for such solutions bringing down the cost of customisation, implementation and ongoing support are on the rising. A part of the ERP resellers channel understands this shift and is looking for new vendor relationships.
Those are the partners that we would like to talk to.
Hans Peter Bech
OK, so there are ERP resellers out there looking for the type of solutions that customers now prefer and ask for. And the answer could be Rambase. I get that.
But how do you compensate for being a new brand? I suppose your partners cannot expect to be just fulfilling captive demand. Don’t they need to actively generate the business for you?
Odd Magne Vea
That’s correct. However, again there are two sides to that coin.
We do recognise the need for building a brand and creating awareness in the market segments that we serve. As we have chosen to serve the market through a selected channel of resellers, we then work closely with each of them to build market awareness, generate leads, run sales projects, and perform successful implementations.
We invest heavily in our partners because we see each of them making significant contributions to our success.
I think you can use the principles from the Law of Diffusion of Innovation in this context.
Partners with a visionary mindset can get very special treatment with us because we are in the stage of building the market.
Hans Peter Bech
But doesn’t that mean that as you grow your market presence you will be less motivated to invest so massively in your partners?
Odd Magne Vea
Yes, that’s the way the business works for all of us.
Those partners that are prepared to take on the challenge of building the market together with us now will be rewarded for their efforts and we will go a long way to protect the investments they make.
Those that come along later will benefit from the brand value that we have created, and then we may not need to invest so massively in creating awareness as we do now.
However, I must stress that serving selected industry segments, which is the strategy we pursue, will never require a channel with thousands of partners. Our partner channel will always be smaller and more exclusive than that of the platform providers.
For those partners that prefer having their voices heard and enjoy being a bigger customer in a smaller shop, Rambase currently offers an excellent opportunity.
Hans Peter Bech
That sounds great, but I assume that Rambase has the ambition of becoming a big shop. You want to be the leading vendor in your target segments, right? – How can you guarantee that the individual partner will always have a strategic position with you?
Odd Magne Vea
No one will give such a guarantee.
What I say is, that we currently probably need the partners more than they need us. That’s why we are prepared to invest in the relationship and help them build their business with Rambase.
Such a proposition is not attractive to all partners. I do understand that. But for those who share our perception of the opportunities in the market, the timing for building a business with Rambase will probably never be better.
At this point in time, each new partner is strategic to us and is nursed accordingly. Will that always be the case? Probably not, but today, where else can you go to have someone invest in building a business with innovative cloud-based multi-tenant ERP software for vertical market segments?
With Rambase as the product and Hatteland as the company, I am convinced that we have a very attractive value proposition for the visionary ERP channel partner.
Hans Peter Bech
Can you then give us the ultra-short version of why it is attractive to become a partner of Hatteland and a reseller of Rambase?
Odd Magne Vea
Provided that you serve or want to serve the type of customers that Rambase is designed for, then we currently offer to co-invest in building your business with us. We invest in onboarding your staff, we invest in joint marketing and lead generation, we invest in pre-sales activities, and we help you implement the first projects.
As a value-added reseller of Rambase, you will have our full attention and we invest in your business.
Hans Peter Bech
Thank you very much to Odd Magne Vea from Hatteland Computer Systems
If you want to know more about Rambase and Hatteland you can visit their websites, or you can get in touch with Odd using the coordinates that we will show next.
Thank you for listening and have a great day.
