A new white paper is available, covering some of the challenges vendors and partners are having when building a channel for Software as a Service solutions.
The white paper is publicly available through either the SIIA website or directly here from the channel excellence blog.
The white paper covers primarily the differences between SaaS Channels and traditional IT channels and the opportunity for the industry to build such channels and for new entrepreneurs to become a “Catalyst” for the SaaS industry.
As the new chair for the SaaS Channel Committee from the SIIA (Industry association for the software industry) I’m working on some concrete goals for 2007 and also search for committee members who will help grow the indirect business side of the SaaS industry.
Functional areas where I recognized a need in the industry:
– Guidance in regards to contracts for a three party relationship: user, partner and vendor
– Guidance in regards to compensation and margin questions
– Guidance for building and retaining indirect channel relationships
– Guidance for new partners: how to build a successful SaaS implementer
– Providing industry best practices and act as a sounding board for new ideas
Any feedback or support is very much appreciated. Please email to email@example.com
At this first “OnDeand Conference” from the SIIA in SanJose, channels will play an important role of the conference. On November 8, 3:45pm – 4:30pm, I will host a panel of SaaS vendors and channel partners discussing how vendors and partners can be successful by leveraging each other.
Channel Strategies – How partners make money in SaaS and how vendors and partners can leverage each other
How leading SaaS vendors and leading SaaS partners successfully leverage each other. How partners make money and what vendors invest in the partnership. What worked and what didn’t. Learn from channel thought leaders how they see the channel developing as SaaS products get more and more consumed in a global market.
Eric Berridge (BlueWolf – Reseller)
Jeff Hausman (Symantec – Vendor)
Robert Jurkowski (Intacct – Vendor)
Philippe Vincent (Accenture – Consultant).
You will find more information at www.siia.com
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.