The white van movers

A particularly good example of how cloud service providers can become the glue not just for linking partner businesses technically but as a core part of the on-going business management and the creator of new business opportunities can be found in NetDespatch.

The company provides a SaaS logistics management service for the parcels courier services world, or as CEO Becky Clark puts it: “we provide the datastream underpinning all their activities. We facilitate the process by providing all the back office functions that are required.”

This may at first seem a rather mundane marketplace but, as Clark points out, it is in fact huge, and global, with an estimated total world revenue of $1.2 trillion last year.

“We now manage the shipment of millions of parcels a month, and currently have 130,000 retailers worldwide using it for free,” she said.

That last observation is, in its own right, of interest. It would be easy to assume that it would be those retailers which have the most vested interest in signing up for such a service, as they are the ones who need to organise the physical link between themselves and their customers. But in practice, NetDespatch identified that the real target market for its services are the carriers, the owners of the millions of vans and lorries scampering around, 24 hours a day.

By using NetDespatch, they not only get a centralised logistics management service, but also get the chance to add services provided by NetDespatch that they can sell on to retail customers as value-adds to their core offerings. And as it is a cloud service, the cost is essentially a pay-per-use model.

The core NetDespatch service , therefore, can also act as the backbone of a service aggregation environment that the carriers can build up and offer to their retail customers. It provides a full end-to-end logistics management service, but also comes with a variety of client services.

The company has also already formed partnerships with many of the leading SaaS front office and business management providers, such as Netsuite and Salesforce.

“This is the obvious route to take,” said Clark, “each providing their core skill, especially when it comes to omnichannel marketing which is now becoming a key tool for retailers. Why should we try and learn to build systems they already provide? Using the cloud makes this very easy.”

It is also a service that is equally at home with small carriers and some of the largest: Ryal Mail’s ParcleForce, for example, is a user. Straddling the small and large carrier divide is another customer, APC in the UK, which is in fact a cooperative of 120 individual courier companies across the country.

“That would be impossible to do without the cloud,” Clarke observed.

The cloud even allows the company to work with some unusual business models. For example, the smallest start up courier will pay the most, though it is only 25 pence per parcel. As such companies grow, however, the cost per parcel comes down.

“We want to push out customers towards growth,” Clark said, “though the cloud is so good an environment for start-up businesses that the top price we charge is just that 25 pence per parcel. And as it is pure-play SaaS, we can start a new customer in as little as 10 minutes.”

It is now looking at additional services it can provide for its customers. For example, it has now accumulated some 10 years’ worth of data on parcel deliveries and is now looking at ways it can be exploited. So Clark is now starting a SaaS-delivered analytics service for carriers and retailers. This will look at such areas as consumer patterns and models and aim to model them so that customers can model future business opportunities.

In this way the company is something of an object lesson on how SaaS can be core part of entire industries and the glue that holds them together. It provides companies whose core business is far removed from IT or the glitzy financial, media or knowledge industries with the underlying skills and services they require, plus additional services that extend their `stickiness’ to retail customers.

And as the wealth of data generated mounts up, the ability to sell analytics services based on it becomes another revenue stream to exploit.