The Implications Of DAM Software’s Gradual Transition Into A Channel Partner/Integrator Business Model

I have written a feature article for DAM News about the risks (as I see them) to the financial stability and long-term survival of the DAM software market based on a number of trends I have seen gradually emerging largely as a result of the use of cloud technology.  I need to make is clear that I am not opposed to this method of delivery, I think it is the easiest and most practical option, however, it brings some unexpected effects that those with an interest in DAM (whether users, vendors or investors) need to be conscious of.  I have made the comparison with sharecropping and I believe that basing a business solely on a single larger cloud technology provider exposes vendors to increased risk of that occurring:

Viewed from one perspective, the DAM industry has turned itself into a channel partner or integrator business model which depends on a small range of key suppliers to continue to exist.  This goes a long way to explaining why there are so many DAM vendors offering homogenous systems that are delivered and marketed using nearly identical methods.  If you view the current DAM systems market as largely an aggregate of similar operators who have slightly different implementations of the same set of services, they start to look a lot more like conventional channel partner or VAR (Value Added Reseller) businesses that can be found in sectors like IT hardware.  In these markets, participants usually compete on price or ability to successfully implement product (i.e. consulting skills). To use an analogy: if all the chefs use identical ingredients, there is a higher probability that their food will all taste the same, whatever restaurant you decide to dine in.” [Read More]

As well as cloud delivery in general, I also discuss the use of Dropbox as a core DAM services infrastructure provider and explain why I think this is not a good model for DAM vendors to follow.  As described in the article, I plan to write a follow-up piece about what solutions could be devised to avoid the worst effects of these trends but anyone who has their own ideas is welcome to comment here and now.

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