John Howell, the founder of Solomon Software International, and an author of an excellent article on cloud computing, once said to me “if you are a reseller, you should be a reseller-and be the best one you can be.  Don’t try to be a software developer and a reseller because you will exhaust your resources and end up being great at neither the software development part nor the reselling/consulting part.”

For 17 years, we’ve resisted the temptation to turn one of the hundreds of useful programs we’ve created for our Minnesota-based Dynamics GP and Dynamics SL clients into a for-resale product.

What are the differences between a consulting (reseller) organization and a product-creating reseller organization?

1. Quality of documentation.  When you create custom programs for clients, typically, they want to pay for minimal documentation.  If you create a product for resale-you must create a user manual that teaches how to setup and use the software because the user did not help you with the design of the software.

2. Your support organization.  When you develop customizations for clients, you need to support those clients.  When you develop off-the-shelf software, you need to support clients you did not sell the software (or implement/understand) to as well as other resellers’ staff who are often quite demanding as they need help while on-site and are often not able to wait for support.

3. Overall business model.   A reseller organization makes money pleasing its biggest and best clients so they continue to buy more and refer their services to other large and well-funded organizations. They need to have a blend of large and small clients to make it through the times when larger clients don’t need work.   An ISV makes money by creating a quality product that can be sold often and requires little support.

You need a great idea and product to move you from being one type of organization, into both.  With the push from the main software firms in the ERP space such as Microsoft toward verticalization, making this switch to both reseller and ISV is becoming more and more a thought we reselling consultants need to consider.  This will be a topic I discuss with other Microsoft partners at Convergence this year.