The Information Technology Industry is going through an interesting migration. It is somewhat similar to the migration from “big iron” also known as main frame computers to personal computers in the 80’s.
Please don’t make the mistake to compare it with the Internet evolution as the Internet was an “add on” to the existing PC landscape. The Internet was an additive way of leveraging the PC as it was.
Cloud computing however changes the way applications are developed, delivered, maintained, used… PCs allowed for decentralizing the highly concentrated data and technology power from main frames and its connected terminals and get the full computing power under the control of its user. Continue reading “Cloud Computing Reseller & Publishing Industry”
There are hundreds of people trying to help technology resellers and VARs to transform from selling traditional IT to SaaS, lately to Cloud Computing or other new tech topics like social media or Web 2.0 solutions. The SaaS industry tried since 10 years and failed badly. Here is why I believe it just doesn’t make sense: Continue reading “Stop dreaming about channel transformation”
So let me share with you my experience from the past 10 years in the “SaaS industry”.
1) If something is 10 years old and hasn’t taken off – it’s better to leave it off
2) Cloud computing is the newer more sexy term for SaaS
3) People who sell SaaS sell the wrong thing. Continue reading “SaaS is dead – VARs for SaaS don’t exist”
The end of the channel – long life the channel. The end of the high tech channel was predicted the first time 1985 – 3 years after the first computer reseller opened shop. Ever since the end of the channel was predicted.
But then if we look at the typewriter resellers, that channel was predicted to die and it did. It did with no noise, silently vanished away – after 10 or so years of arguing. Look at the bakery, butcher, shoemaker – all predicted to die – and at the end: all did go out of business. Continue reading “See you at the funeral”
Bluewolf Group represents a new breed of channels, specifically designed for the SaaS industry. With the firms 175 consultants they help companies implement and integrate solutions from salesforce.com, Eloqua, Openair, Responsis, and do some custom work for SAP, Oracle and others. Bluewolf Group drives on-demand revenue through their consulting practice.
In accordance to Eric Berridge, SaaS channels make either money by providing consulting services around certain solutions or by developing products enhancing existing solutions. He states that salesforce.com does an amazing job for the developers making the product partner friendly.
Eric’s advice: Vendors need to ensure that their partners can be self sufficient and that the partner doesn’t require resources from their vendors to buy and implement a product.
In 1999 David Code was still running a traditional VAR helping customers with the implementation of procurement processes. After doing a J.D. Edwards implementation for his own company he decided there must be a better way to deploy business applications and started to look into ASP offerings. The challenge back then was to build a complete portfolio of applications that would a low to build an entire business on it. The key to his success David stated, was the fact that they did no longer sell a piece of software but helped people to reengineer their business processes. Suggesting an ondemand application was a result of the consulting work. Today AppsOnTap is selling SaaS applications from Salesnet (now RightNow), Vtrenz, Openair, Bridgeworks, Netsuite, QuoteASP, Ketera and Employease (now ADP). As Frank Brown stated, the industry goes like any other industry through those waves of disintermediation to reintermediation. The profitable and self funded AppsOnTap is one of the early leaders in indirect SaaS channels and a great example for a profitable SaaS implementer.
Salesforce.com is a very effective channel from big to small companies. For instance Vertical Response offers their solutions via the AppExchange to 400-500 customers. The AppExchange model is to help developers reduce their burden on integration and also reduce sales and marketing cost. Vertical Response is one of the examples who provide their solutions through AppExchange with an up to 40% lead closure rate in accordance to Salesforce.com’s Matt Holleran (VP Alliances). Also interviews with other partners confirm that Salesforce.com made it very easy to integrate their respective solutions without the need to get engaged with salesforce employees and be dependent on their resource allocation. For instance Salesforce.com provides ways to test drive not only the salesforce.com application but also their partners application. Some of their partners develop exclusively on the salesforce.com platform and can reduce cost of the development environment. The salesforce.com partnerships are highly integrated into the salesforce.com solution architecture which makes the salesforce.com channel a highly efficient group for all kinds of solution developers.
Matt’s advice: Companies need to design the buying process into their product. The easier it is to explore, try and buy a product the higher the chance to win the customer.
Jamcracker is providing a channel ecosystem through their webservices integration business. Partners can access the Jamcracker site and find and select those services. There are new success stories around the channel to be found on their website. JSDN is Jamcrackers On Demand Market Place. On a way similar to the AppExchange from Salesforce.com it was built to help partners buy, consume or market webservices.
Brent’s advice: Large percentage of traditional IT VARs aren’t there yet. Even so Microsoft is now pushing the SaaS business. A new breed of partners with no baggage is probably what it takes to build channels for SaaS. His channel began to grow substantially this year.
Infopia tried to develop a partner channel early on but faced great challenges. Even so the product is zero touch and easy to onramp a customer, channels wasn’t ready. In more complex projects they actually pulled in some VARs who helped to integrate Infopia’s ecommerce products into the customers on-premise IT world.
Now in a very recently new attempt to collaborate with partners they had more success. In a large project Infopia collaborated with a new partner and actually demonstrated great success for all participating parties.
Infopias sales organization is structured so that all business below $50k goes through inside sales and above through field sales. If partners are involved in a business Infopia provides both contract option: Customer signs partners paper or Infopias paper.
Bjorns advice: Since the partner model is so different due to the recurring revenue model, partners and vendors do need to fully understand the value chain in that business.
Today 7-26 I interviewed Bulldog Solutions CEO Rob Solomon
Bulldog Solutions is a Lead Generation Company, working as an enabler for the SaaS industry. Some of the underlying infrastructure to the lead generation business are conferencing solutions from Webex and Placeware. Bulldog seams to be one of the larger Webex and Placeware customers, using their services to provide webconferences to the customers of Bulldog Solutions. Even so for the web conference vendors this might be a channel, Rob Solomon (CEO) how ever views this just as infrastructure he is using. Bulldog Solution makes primarily money off of the services they provide, while the margin they get from the vendors are not substantial to their business.
Channel or not – it is one of the cases where a company such as Bulldog is an important catalyst to vendors like Webex and placeware. It is one of many examples how channels appear to be very different in the SaaS industry relative to the traditional IT industry.