Telstra made waves when it launched Telstra T-Suite all the way back in 2008, so long ago that the original batch of apps included Message Labs and McAfee, companies since acquired. The Microsoft products were hosted applications; Office 365 wouldn’t launch for another three years.
It's fair to say the news wasn’t greeted enthusiastically by the channel, who saw it as a way to cut out the middleman.
Fast forward seven years and T-Suite is being put out to pasture and will be replaced by the more pragmatically named Telstra Apps Marketplace. Did T-Suite fail?
On the contrary, according to Telstra. The original platform was a victim of its own success. It has established “a lot” of paying users already but it wasn’t flexible enough to cope with the rapid expansion and deployment of SaaS programs.
For example, Telstra can add a new SaaS program much faster to the Apps Marketplace than T-Suite. The company plans to rapidly onboard handpicked apps that administrators can assign to individual employees within a business.
Onboarding is faster due to the white-label platform behind the Apps Marketplace, AppDirect. It handles billing and distribution and serves as a connection point for local and global ISVs through its API program. Telstra can hand out specs for the AppDirect APIs to anyone that wants to onboard onto the Apps Marketplace. This frees up Telstra from the time-consuming work of doing the integration in-house.
Apps could arrive faster than Telstra’s own timetable as AppDirect’s telco customers onboard apps in other countries. AppDirect has a growing list of apps that Telstra can turn on instantly for its Australian market.
[To learn more about Telstra's IaaS strategy, read this article]
Another new trick – and one that T-Suite could never perform – is the ability to add private marketplaces, which come in at least two guises.
Telstra intends to set up private marketplaces by industry, with education and government first off the rank. These private marketplaces will only present approved or recommended apps for organisations in that vertical. This will cut down the amount of time it takes an admin to compare, select and deploy apps.
The second use of private marketplaces is even more interesting. Telstra will let companies set up personalised marketplaces from which employees can choose to deploy their own apps. The marketplace might include a mix of public apps, services such as mobile device management and non-SaaS applications such as custom line-of-business apps hosted on Telstra’s IaaS platform.
An admin can control how users access the apps, report on their usage and billing, enforce security measures, chargeback apps to divisions or subsidiaries and test applications.
“I think this is applicable to organisations of 25 to thousands of employees,” says Joel Dane, a cloud solutions specialist who was recently promoted from head of sales to general manager of cloud services. (The telco has brought its separate cloud divisions – IaaS, SaaS and professional services – into one group.)
Telstra is only now testing features such as private marketplaces internally. It won’t be released publicly for at least six months, Dane says.
Other features of the AppDirect platform include better analytics of app consumption within a business. A customer can see the spend per app and use tools to restrict the proliferation of rogue apps.
AppDirect also brings centralised user management to Telstra’s SaaS marketplace. This will soon integrate with Microsoft Active Directory so a customer can import their entire user base and use that to control access to apps by business unit.
“The finance group might need finance apps, the sales team needs a CRM. You start segmenting how you control and distribute apps,” Dane says.
Down the track, Telstra also plans to add single sign-on to the marketplace for instant access to any apps within it.
The Apps Marketplace is already live for new apps such as Box, Docusign, Deputy, Shoeboxed and CakeMail, but customers have to buy T-Suite apps from T-Suite. Telstra is moving very cautiously towards the cutover date for moving customers and apps from T-Suite. It hadn’t yet finalised the changeover date at time of writing.
Hosted takes a hit
Like all other Microsoft resellers, the demand for Office 365 forced Telstra to reposition its established hosted services business. Companies typically pay more for a hosted Exchange and SharePoint solution separately than they do for a combined Office 365 licence.
Telstra’s locally hosted and managed cloud collaboration solutions are now under its hybrid cloud strategy. This line targets customers in regulated industries such as finance, health and government where data sovereignty requires information stay onshore.
The hosted version of SharePoint is also easier to configure and with greater depth of features than SharePoint Online, the respective component within Office 365.
In both cases the hosted solutions are offered as complementary to Telstra’s Office 365 services.
“We offer hybrid deployments for the productivity workloads where a customer has requirements for various levels of security and localisation across their user base,” Telstra said in a prepared statement.
Some well-placed execs in the channel have suggested to CRN that the rise of Office 365 meant Telstra lost money on its investment in hosted Microsoft products. Telstra declined to comment on the size of the investment it had made in its hosted business and whether it had been impacted by the growth of the SaaS arm.
Next: Meet with Telstra’s Mr Cloud
Joel Dane is in the box seat for Telstra’s aspirations in selling business technology. With oversight over professional services, SaaS and IaaS, the Telstra Business national manager for cloud services knows a lot about how to sell cloud – and how to make money from it.
One of the most interesting revelations is that there is plenty of potential in SaaS. Cloud software typically offers slim margins that make it unsustainable for local break-fix businesses transitioning from selling servers. But when combined through a marketplace, it can prove even more profitable than IaaS, Dane says.
“Our revenue from IaaS and SaaS is about 50-50. The margin is comparable and sometimes higher with SaaS,” Dane says.
[To learn more about Telstra's IaaS strategy, read this article]
It’s true that from a pure revenue perspective, the telco needs to sell a lot of SaaS licences to drive the same revenue as IaaS. However, once a business starts using one SaaS program they often end up buying several more for all their staff. This translates into a healthy annuity revenue requiring little effort to maintain.
Microsoft Office 365 continues to grow quickly, even after the exclusivity deal with Microsoft ended. Dane acknowledges that these sales are due to the efforts of its channel.
“There were all these question marks around what would happen [post exclusivity] but our channel is driving value for our customers. Its a testament to them.”
Other growth areas include Symantec and mobile apps.
The beauty of the SaaS model is that it provides quick features and benefits – a manager can literally turn on an app with a credit card and start using it immediately.
It’s much more difficult to get the same business value by migrating workloads.
“Think about a customer’s supply chain and all the apps that touch it. If you want to integrate them and sell it as a SaaS per user to a customer the revenue will generally be higher than if you do it as IaaS,” Dane says.
The strategy of bundling apps is right out of the distributors’ playbook. Doesn’t this place them in direct competition? Dane doesn’t think so. He previously had his own systems integration business in his homeland New Zealand and worked for other SIs in Australia.
Dane still values distributors’ role as an aggregator of relationships with resellers. “We don’t want to do everything direct. Most of our cloud goes through our channel. There’s mutual benefit in partnering with disties so we get access to downstream partners.
“I don’t have a crystal ball but pragmatically looking at it we will be doing more partnerships than selling direct. If a customer needs a PC where are they going to get that PC from? From a distie.”
What can Apps Marketplace do that T Suite can’t?
- Single intuitive and user friendly platform to manage applications and users
- Users can request trial and buy applications from the catalogue
- Admins can bulk invite users to their company
- Admins and users can be part of multiple companies using the single identity
- Users can compare the capability of applications
- Filter applications by industry, line of business and business needs
- Self-serve support online
- Simpler sign-up process
- Telstra partners can buy and manage customer accounts on their behalf using the one identity
- End-user access and single-sign-on to applications from one location
- Rapid on-boarding of new applications and services
- Rapid offer creation to bundle and package services and applications easily
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