People ask me what the logic is behind Enprise Group acquiring Cloud Portal provider, Datagate Innovation Ltd. Here is the background;
Datagate Innovation Ltd is an early-stage, cloud-software developer that is building a product called “Datagate” which is a Cloud Portal for Telco and Utility Resellers to offer on-line rating, billing and usage analysis to their customers.
Datagate is a browser-based Cloud Application which is built on the latest Microsoft technology and is deployed on the highly-scalable Microsoft Azure global platform. It has data feeds coming in from major Telcos and Utility Providers from where it collects the raw data upon which it’s billing and analytical reports are based.
Go-to-Market Strategy
Datagate is building and demonstrating the value of the Datagate product within the New Zealand Telco and Utility markets, before expanding into larger countries with much larger sales potential. New Zealand is considered an ideal test market because it is a small-scale representation of the Telco and Utility markets of larger economies.
When Datagate reaches the stage of targeting markets outside of New Zealand, it will have access to Enprise’s SAP Business One reseller channel, with nearly 100 established reseller relationships in USA, Canada, UK, Australia, New Zealand and South Africa. To these partners, Datagate is a vertical industry solution for SAP accounting software that will open opportunities in the Telco and Utility space. This channel will give Datagate an immediate effective international sales and implementation workforce.
Datagate’s sales strategy is to partner with major Telco’s and Utility companies in order that they promote Datagate to their wholesale channels. This is a win-win partnership because Datagate gets the qualified referrals to potential customers and the Telco or Utility Company gets a more efficient and effective reseller channel with tighter integration and lock-in to their own services.
Convergence of Telcos and Utilities
Datagate enables Telco resellers to sell Utility Services such as electricity and likewise, enables Utility resellers to sell Telco services, such as broadband, Cell phone services, SIP trunks etc.
Datagate’s Value Proposition to the Channel Owner
Channel Owners are Telcos and Utility companies who typically have reseller channels through which they wholesale their offerings. Datagate removes a major obstacle for small to medium sized resellers of Telco and/or Utility services – by automatically handling the complex tasks of on-line rating, billing and analytic reporting. This enables the Channel Owners to expand their reseller channels faster and wider than previously possible and for the resellers to operate more quickly and efficiently. Datagate’s agility also enables Telco’s and Utility companies to bring new products and services to market potentially faster through their wholesale channel than through their direct channel in many cases, given that their own systems are not as flexible as Datagate.
Datagate Value Proposition to Retail Resellers (Datagate’s customers)
Rating and billing of Telco services is very complicated, with high volumes of billing lines, complex pricing formulae and relatively low values per line – all typically on a monthly recurring basis. Standard, off-the-shelf accounting software cannot handle this complexity, so specialized billing and analytical systems, such as Datagate are required. Some resellers have attempted to create their own in-house software at large development and on-going support cost. Datagate lowers this barrier and is cheaper to maintain as it is spread across multiple resellers.
Datagate enters the market at a time when hugely scalable host platforms are now available, such as Microsoft Azure that can handle “big data” at relatively low cost. Datagate makes the complex job of Telco billing easy and is charged on a friendly monthly subscription basis, with relatively low up-front costs.
Datagate Value Proposition – End Customer
End customers have now come to expect on-demand access to their Telco and Utility billing accounts on-line in a similar manner to which the large players such as Spark, Vodafone and the large power companies provide their billing and usage analysis reporting. End customers of the smaller resellers who use Datagate will get all the advantages of data immediacy that they would have in dealing with a large corporate supplier (thanks to Datagate billing and analytic services) with the added advantage of dealing with a smaller, more flexible supplier. This expectation will continue to grow; something that many resellers are unable to economically provide.
Datagate will continue to raise these end-user expectations in the market, whilst giving resellers an effective way of delivering to this expectation.
Optimum Time
Datagate is entering the market at an optimum time when global Telcos and Utility Companies are under increasing price and margin pressure and are seeking to expand their reach through wholesale reseller channels (on the basis that smaller business customers are best served by smaller, more agile resellers). A major barrier to smaller resellers operating in this space is the complexity of Telco and Utility billing. It is not economically viable for smaller resellers to develop their own specialized systems and standard off-the-shelf accounting systems will not handle this billing complexity (nor be able to automatically process the Telco & Utility data-feeds).
From a technology perspective, Datagate’s timing is perfect, as Cloud software and mobile computing have reached widespread acceptance and massively-scalable yet relatively low-cost global deployment platforms such as Microsoft Azure have emerged.
The technology answer to the needs of large Telco’s & Utility companies and their reseller channels, is a common Cloud-based solution charged on a subscription (per end-customer) basis, with relatively low up-front costs. This is Datagate.
The need is there, the technology and the low-cost scalable hosting platform is there. The time is right for Datagate.
Mark Loveys 