Why does Software as a Service (SAAS) make so much sense for dealers?

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With so many acronyms being invented because of the "cloud" we'd like to explain what SAAS or Software as a Service means and give an example of a splendid use of the concept for auto dealers. At the end of this blog post we have a link to a story on just one dealer who has adopted this solution.

In a survey that we did at one of my companies, Microsoft Cloud Services, we started to scan dealership technology and survey how many P.C.s are on the lot inclusive of laptops as well as details like which operating system and version of Microsoft Office they have installed because in our studies the two were a requirement to get business done.  We also asked how many unique email addresses are being utilized and what those email addresses are being utilized for.  We also asked which provider they used for email services as well as how many mobile devices are in use at the dealership.

We have the surveyed information from thousands of dealerships from Digital Dealer, Driving Sales, Kain Automotive Conference and some of our dealers at another company I own, RyanTech who serves the automotive industry in many capacities.

This article focuses on the eMail providers, Antivirus solutions, Windows versions and Office versions.  We're going to go into detail on the other items in a future article.

Albeit these facts are staggering for a technology company like ours, they are extremely typical of a business that has less than 100 employees.  For this reason we are moving fast to solve these issues in automotive. 

• Over 90 percent of stores had over 90 percent of the Windows P.C.s running Windows XP, an 11 year old operating system set to be unsupported by Microsoft soon.
• Of the Windows XP P.C.s, more than half were running "Home Edition" versions of the operating system which has less features, is less secure and is not legal to use in a business setting
• Over 70 percent of stores that had Microsoft Office (Word, Excel, etc...) installed on the desktop P.C.s were running Office 2003 (10 years old) and almost half of those were illegal versions of Office installed on the computers.
• When asking about anti virus solutions on the computers, typically a smile was the response followed by "Yeah I don't think we're very good at that".
• When we installed tools to look into the hardware status, software status, viruses, spyware and status of the P.C.s we found that nearly every P.C. had a virus, multiple spyware programs and toolbars yet they were spending money on solutions or used a FREE solution that obviously wasn't working.
• MOST of the dealers we interviewed were using gMail as their professional email addresses communicating with customers when an Android mobile device was involved.  Essentially forwarding their business email to a gMail address and communicating with customers via that non professional address i.e. kevincarguy@gMail.com. The reason for this was that they received tons of spam in their inbox, their current provider wasn't compatible with mobile or the user felt the gMail system was "easier".
• When asked "Why use gMail?" it was typically because the user could send and receive email from their Android device and see it on their desktop as well.
• When asked the question: "Can you see what your Manager's schedules are from their calendars all on one screen?" we received not one dealer that answered "Yes".

This begged the question, "Why do dealers have these issues?"

The answer, we believe is simple.  Although there ARE exceptions to the rule, the facts are the facts and we feel there is a real problem in automotive.  Most Auto Dealer employees are not technology gurus although they do like tech and they do like gadgets.  They use and trust the tried and true technology of the past and make decisions to adopt the easiest technology when it's new to them.  This creates a fragmented assortment of products all by different providers and none of them are integrated.

Now that we've explained all that let's detail why SAAS is best for the above problems. Stop writing checks for software that becomes outdated in less than a year!  Here are some more facts:

1. In order to bring an Auto Dealer's systems up to the most recent and secure operating system we would have to buy the full retail version of Windows 7/8 for all of the machines with Windows XP Home on them ( 35 computers on average ) and we could buy the upgrade for the remaining 15 computers on average.  Total cost for upgrading Windows to today's most secure version and fastest version of Windows ever; $9,200. ( $184 per P.C. )
2. In order to bring the same dealer up to speed on Office to the new 2013 version we would have to buy the new retail version for 35 computers; $17,500 ( $500 times 35 P.C.s )
3. To protect these P.C.s we would need to find a solution that could remove this problem all together. One packaged solution, Symantec AV totals; $4,400 ( $88 times 50 P.C.s )
4. Finally gMail is free and easy to use and pretty compatible with all devices, extremely effective on Android devices. But if your staff is using a gMail address to represent your store, the user owns the data in the emails. Your store is disconnected from all communication and when the employee leaves your store they retain the relationship with YOUR customer.  Free is not better and letting a search engine/ad company run your business email is NOT best for your business. Moreover there are discussions out right now about the liability on the dealer when customer information is shared in personal email.  To fix this problem we need to replace gMail with a viable corporate solution that is easy to use, free or inexpensive and compliant with privacy laws but that provides the same value users see in gMail.

When comparing the above with a SAAS model ( Software as a Service ) it looks more like this:

1. To bring all computers up to Windows 8 would cost $550 a month and would include a  full anti virus, anti malware and windows update solution. When Windows 9 comes out, it would automatically be available at no charge. ( Total Year One: $6,600 - savings of $2,600 )
2. To update the 35 computers to Office 2013 of many versions to accomplish the tasks necessary the cost would be $560 a month ( Total Year One: $6,720 - savings of $10,780 )
3. No Antivirus solution is necessary because it's all taken care of in number 1, Windows Intune includes Microsoft's best anti-virus and anti-malware solutions ( Total Year One: $0 - savings of $7,040 )
4. Lastly, 35 of the computers will receive Office365 provided by Microsoft which is Microsoft Exchange in the cloud so there is no cost for those computers for email.  The other 15 will cost $4 per month or $48 a year ( Total Year One: $720 - loss of $720 ) however the dealer owns the email, data and can wipe a remote device anytime. Money well spent.

So let's analyze this as a summary of everything mentioned above.

Windows - To get all P.C.s up to current Windows and legitimate save $2,600
Office - To get all users to current Office and legitimate save $10,780
Internet Protection - Included in the package and save $7,040

eMail - Moved to dealership .com address and loss of $720

Net Totals: Savings of over $20,000 in year one and everything is legitimate and protected.  It's possible that some of the computers will need upgrades to run Windows 7/8 but we've not yet seen that.  So let's say that we use that $20,000 in savings to replace computers.  We could replace every P.C. in the dealership, all 50, with brand new ones in this example at $400 per P.C. and break even in the first year.

Moving forward you'd have a net cost of approximately $14,000 a year to stay perfectly current with Windows, Office, Antivirus and eMail which CAN in fact see everyone's calendars on every device and every screen.

What's more is you'll get a dedicated staff to handle every I.T. need and manage your store from the cloud.  They'll reset passwords, add printers and install software at no charge.  

Finally, this SAAS model when provided through a partner like Microsoft Cloud Services, powered by RyanTech is almost FREE.  Our division charges $50 per month on top of the Microsoft fees to do all of this for you.  We deliver the solution, answer your calls, handle the licensing and bring you up to current.  It's our pleasure to partner with Microsoft and change automotive once again.

SAAS makes sense and if you're interested in making this happen for you, contact our staff at:

Microsoft Cloud Services, powered by RyanTech

helpdesk@mscloudservices.com

866-804-9040

If you have any questions or comments, we'd be happy to continue the conversation below.  Thank you for reading.

Still not convinced?  Head over here and check out our Case Study done by Microsoft on the Murdock Hyundai stores in Greater Salt Lake City, UT.

Kevin McMillen, Founder

MS Cloud Services and RyanTech