The Anatomy Of A Mobile Computing Integrator
A buyout of a 13-year-old AIDC (automatic identification and data collection) VAR creates a mobile computing integrator that expects a 75% increase in sales revenue this year.
In November 2001, Mick Milnark's boss presented him with an investment opportunity. At the time, Milnark was the director of sales for AIDC (automatic identification and data collection) VAR Sneller Systems (Golden, CO). Don Sneller, the company's president, offered Milnark the chance to become a partner. But, Milnark had other plans. He not only wanted to buy out Sneller, he wanted to change the 13-year-old company's name and add his friend and neighbor, Gary Blohm, as CEO. In January 2002, Sneller agreed (he remains a minority partner), and Blue Dot Solutions, Inc. was born.
Focus On Mobile Computing
When logging on to Blue Dot's Web site, Milnark and Blohm's vision for the company is immediately apparent as the words "All We Do Is Mobile" flash across the screen. "Sneller Systems was a classic AIDC VAR that lacked focus," Milnark commented. "In contrast, Blue Dot is committed to mobile computing because we absolutely believe this is a portion of the AIDC market that is on the brink of really taking off."
More specifically, Milnark and Blohm are channeling the majority of their marketing efforts to sell their new (April 2002) mobile and wireless framework, Mobile Spectrum. This software platform adds mobile data collection functionality and work management solutions to existing software applications. For instance, an asset management software company recently added Mobile Spectrum so field workers using its application could transmit data via a WWAN (wireless wide area network).
Blohm, a former regional sales manager for Cisco Systems (San Jose, CA), reiterated Milnark's comments about Blue Dot's direction. "I just returned from a VAR conference where most of the attendees said they offered everything from printer solutions to custom-designed back end databases to WLAN [wireless LAN] site surveys," he said. "Following that type of business model is not how I feel we'll become successful. I don't want to build our company by having 10 sales reps across the country knocking on warehouse doors. Instead, our plan is to focus on ISVs [independent software vendors] for Mobile Spectrum."
Offer ISVs Mobile Computing Functionality
When they made the switch to Blue Dot Solutions, Milnark and Blohm were lucky to retain all of Sneller's customers. Seventy-five percent of those customers are companies that use the VAR for traditional AIDC products such as bar code scanners, printers, and handheld computers. The remaining 25% of the customers are companies such as ISVs that take advantage of Blue Dot's software products. (Mobile Spectrum is the only software product Blue Dot has released since its name change. The company still offers three other data collection and file transfer software packages that were developed when Blue Dot was still called Sneller Systems.) Those ISV customers account for 65% of the company's overall sales.
The ISVs Blue Dot is pursuing include the following: computerized maintenance management system (CMMS) software, business automated system (BAS) software, supply chain management software, and customer relationship management (CRM) software. According to Blohm, there are also niche vertical markets that are in need of field service applications. For instance, one of Blue Dot's customers is an environmental data management software developer whose application is used by the Environmental Protection Agency (EPA). Blue Dot developed a mobile data collection software that feeds this ISV's back end database with environmental sampling data.
Milnark noted that ISVs are generally receptive to partnering with Blue Dot because adding mobile functionality to an existing software program is a whole other world. The ISV would need to make sure the application was compatible with multiple hardware devices, operating systems, and connectivity options. That's why Blue Dot positioned Mobile Spectrum as a configurable framework customers can plug into their application and control themselves.
ISVs Extend Your Sales Force
Blohm said the sales cycle could last up to nine months when selling to ISVs; nevertheless, the results are substantial. Blue Dot earns revenue from the initial integration of its software into the ISV's back end database application. However, the real money to be made from this type of client comes from the license fees. Blue Dot receives a license fee (via the ISV) for every end user employing an ISV's Blue Dot-enhanced application.
The ISVs also act as an indirect sales force for Blue Dot's applications. For example, one of Blue Dot's ISV customers has 220 account managers selling a software product that includes a Blue Dot mobile application. Having that type of extra sales support is great for a small company like Blue Dot that, in addition to Blohm and Milnark, employs only two other salespeople.
Don't Give Service And Support Away
Blohm and Milnark's plan to focus on ISVs meant the company needed to change more than just its name. Primarily, Blue Dot needed to implement formalized processes and procedures. For example, previously, the company didn't have structured project plans, weekly project updates, or customer project sign-off requirements. "We never had any real milestones that shifted a customer from an implementation phase to a support phase," Milnark explained. "Now, we have templates for different types of projects and we use checklists to know when a customer transitions to a different level." Blue Dot also formalized its service and support programs. For example, the company now has a specific RF (radio frequency) site survey program and hardware/software support packages. In addition, a new online support tracking program allows customers and Blue Dot to monitor the status of a particular support plan. "We were probably losing money on support in the past because we didn't track it well," Milnark said.
Sign Up More Clients With An ASP Model
Now, with its internal policies in place and ISV focus, Milnark and Blohm are plotting the evolution of Blue Dot Solutions. Creating an ASP (application service provider) option for its software and opening an East Coast office are two proposed initiatives. Obviously, by adding an ASP model Blue Dot is seeking to attract those customers that can't afford to buy multiple software licenses or don't have the IT resources to maintain a software application. Blohm said adding an East Coast office is necessary because much of the company's revenue comes from East Coast clients. "I think there is a lot of top-down selling that has to happen when you are dealing with enterprise customers," he stated. "You can't just show up once every six months to take their temperature. Our market is highly competitive, and it is imperative that we stay very accessible to our customers."
So far, Blue Dot has landed five ISV customers, one of which is using Mobile Spectrum. Milnark expects this growth to continue and predicts Blue Dot's sales revenue will increase 75% this year. To achieve such growth, Blue Dot is implementing various sales initiatives. For example, the company is sending e-brochures to new ISV prospects' CTOs and CIOs, attending software-specific conferences (e.g. enterprise asset management software), and seeking additional revenue opportunities from its current ISV customer base.
"At Sneller, we sort of followed that 'anything to make a buck' mentality when it came to software development," said Milnark. "But at Blue Dot we plan to stay focused. We won't be developing any applications that aren't tied to the AIDC/mobile computing market."