Office 365 itself is a notoriously low margin offering, and adding Pickit to it, in what should be a low-touch transaction, can double those margins.
Pickit, an asset management services for imaging that lives inside Office 365, and is the most down-loaded add-in for Office, is expanding its business model to include the channel, and distributor Ingram Micro. In a new global distribution relationship being announced today at the Ingram Micro Cloud Summit in San Diego, Pickit will now be available in a bundle for new Office 365 sales, along with DropBox and SkyKick, through the Ingram Cloud Marketplace.
Pickit is an image service that lives inside Office 365, which lets organizations store, access, and share company assets within PowerPoint and Word. Designed for the end user to be able to provide more impactful presentations, the service provides access to unlimited photos, clipart images and slide designs, all legally cleared, and free to use for anything.
Pickit’s original office was in Visby Sweden, and that office is still there, but one of their two CEOs, and a second office, is now based in Redmond, to facilitate their increasingly important collaboration with Microsoft.
“When we started, 5-6 years ago, we acted as an image bank for mobile images,” said Rob Dysell, Pickit’s CMO. “But where was the biggest demand for photos? PowerPoint! So we went all in on PowerPoint. We constructed a service that lives in Office 365, and established a strong relationship with Microsoft. We essentially replaced Clip Art in PowerPoint, and established another layer of functionality.” Mathias Björkholm, Pickit’s co-CEO and founder, moved to Redmond in 2015 to further consolidate that relationship – ergo the Redmond office.
Pickit’s design is similar to DropBox, having both a personal space and a business space within the same app.
“We don’t have all the features a full-service Digital Asset Management application would have, because our focus has been on the end user,” Dysell said. “That’s why we are in Office. But we are very popular in PowerPoint and also Word, globally. We get at least a thousand new users every day.” Microsoft liked Pickit enough that in 2017 they became an investor in the company.
“It’s not a substantial share, but they are an investor,” Dysell indicated. “Microsoft wants more stickiness for Office. Anything that makes their products more attractive is vital for them. Given that we are their most downloaded add-in for Office, we are attractive there. It’s not complicated.”
Until now, Pickit has sold through Microsoft to reach end users.
“The consumer app has been the most important channel for PowerPoint to date,” Dysell said. “The business model for that is to provide a 7-day free trial, and then go to a premium upgrade. The corporate model is a monthly subscription with a three-month cancellation provision, to give them more flexibility. What we are doing now in moving into channel sales will be splitting the margin with both the distributor and resellers.”
Pickit and Ingram Micro have been working on bringing this relationship together for over a year and a half.
“Mathias Björkholm, who now basically lives inside the Microsoft campus, pulled the strings to make this happen,” Dysell indicated.
The new Ingram Micro bundle which encourages channel partners to sell Office 365 bundled with Pickit, Dropbox, and Skykick coincides with a new Microsoft discount of 28 per cent to resellers. The Office 365 margin still remains low, however, and selling complementary products and services on top remain the keys to successful monetization for the channel.
“If you add our service on top of Office 365, you double the margin of your Office sale,” Dysell said. “It’s an easy service for resellers to sell, and easy for them to get. We also provide the marketing and sales kits for them. It’s a low touch sell for a reseller – which doubles their margins.”
Even though Pickit has their large consumer-based business, they expect that the Ingram Micro deal will be huge for them, and over the long haul, will transform their revenue base, with more revenues eventually coming more from the B2B side than from consumers.
“We think this will be really big,” Dysell stated. “We have the consumer product, but competition there is really fierce. We think that its long-term value is more of a great marketing approach for us. But the real commercial opportunity to make good money is B2B and will be with the channel. I believe the channel will be our main source of income – not on Day One of course, but over time. We won’t drop the consumer product. It makes sense from a marketing strategy point of view. But we see the channel providing most of the revenues longer-term.”