About five years ago I remember discussing the IntelliFlo proposition with some industry contacts. A new approach to software delivery in Financial services – an ASP back office service. Would Advisers be ready for such a solution? How would it work in an offline world? Will Advisers trust a 3rd party to host their systems and indeed their data?
Five years on, IntelliFlo have held true to their core model and have taken a substantial share of the market. Indeed at the recent Adviser 2008 show their stand was the busiest of all the software vendors. They challenged the norm and benefitted commercially as a result.
It’s always refreshing to see a new business model take on established ideas and approach the market with a fresh pair of eyes – especially when it works. True Potential now seem to be challenging the norms in the same way Intelliflo did five years back. They not only have an ASP model but also an all you can eat pricing model covering front office, back office, portal services, help desk and training. Excitingly the charges are not based on upfront fees but on a percentage of business written. Again the sceptics have been dismissive but their business model is beginning to take hold and I expect them to be a major player in the coming years.
So where will the next new business models come from? Well, the more generic CRM market has four new models that may be worth considering:
• Open source CRM vendors such as SugarCRM – due to the opensource nature the price points are drastically reduced;
• Freemium Services – where the vendors, like Zoho, offer the service free to certain sizes of user base, market segments or indeed to all users for a time limited period;
• Free services such as FreeCRM which make money out of advertising and add on services;
• Platform as a Service (PaaS) models such as provided by salesforce.com that provide 3rd parties with the development capabilities to build customised versions the core products.
The generic ‘On demand CRM’ vendors are currently in high growth mode but often lacking in the profit margins they crave. As a result they are considering targeting vertical markets that show a characteristic, from their perspective, of exhibiting far higher margins. If they take aim at the Financial Services marketplace the outcome will be interesting to watch. The specialist nature of this segment should not be underestimated, especially considering the ever changing regulatory challenges. However if the vendors partner wisely and market effectively this can be overcome. However even if their attempts fail they will still almost certainly bring new and fresh thinking about the way business is conducted and the impact will be felt by all.
