Trying to find your niche in the marketplace is never an easy adventure, but for Toronto based ThinOffice Inc., offering subscription-based computing and branching out in the telco sector may have solved the mystery.
For over the past year, the company has targeted small- to medium-size companies by supplying hardware and software through its relationship with IBM.
“The announcement with IBM is that we’re now rolling it out, after a year of putting it together. We’ve had customers up and running for the past six months, testing and fine tuning it,” said Doug Farrand, president of ThinOffice. Farrand said the businesses pay a monthly fee of about $300 to $400 and in return receive all the necessary hardware and software, but are under no obligation to purchase from IBM.
But Farrand stressed that those end users who sign up with ThinOffice are not forgotten once the equipment is in place. “It’s not just about the hardware and software but complete support. We are the virtual IT department for those people. They’re also getting their hosted applications back in our data centre and around the clock technical support.”
At this point, Farrand would not disclose who the Canadian telco company is that ThinOffice will be working with, saying only that the partnership had taken place about a month ago. He added however, that the relationship with its vendor partner has made it easier to sell into the small-to-medium business (SMB) market, an area that has traditionally not been a place of strength for IBM.
Eric Oliver, the business development executive for IBM in Markham, Ont., said the partnership with ThinOffice evolved as the former was and still remains a customer of the vendor. He said that after analysing the direction ThinOffice was taking, it became evident that business objectives overlapped. “We see some congruence between where they think the market is going to be going for this type of subscription computing and where we believe the market may be headed.”
One analyst said that while there is the obvious potential for growth, there remains some concerns over market acceptance.
“If you already have an office that has 20 employees with 20 machines, how does ThinOffice go in there, where there already is an investment?” said Elroy Jopling, a principal analyst with Gartner Group Canada in Mississauga, Ont. The idea however, of subscription based computing is not without benefits.
“The advantage to the (SMB market) is they’re not putting their dollars into hardware and software that’s not going to generate them any money. They can put that money into machinery that will generate new products (if it’s a manufacturing company).”
He added that he sees this particular industry as being in the embryonic stage, and the real challenge will be to get small to medium size businesses to buy into the idea. Also, while there may not be direction competition with the ASP market, he said in essence, competition could be inevitable because of the similarities offered.
Jopling said both companies will benefit from the alliance: giving ThinOffice more credibility and IBM greater positioning to adresss the SMB market, an area that hasn’t been its forte in the past.