Just located an excellent whitepaper on SaaS channel strategy from the Software & Information Industry Association (SIIA) written by Axel Schultze.
The executive summary was the best explanation I’ve seen on why SaaS channel strategy needs to be different from installed software.
In SaaS, partners don’t take title to the product, there is no inventory or logistics, no contractual reselling activity, no repair service and no physical goods to install or connect.
The main focus for partners in the SaaS world is on business process alignment, optimizing the use of the information, solution deployment, application support and integration with existing systems.
While traditional IT products are sold in a “fire and forget” mode, SaaS solutions are sold with an opportunity for ongoing services. Successful SaaS companies not only think in terms of recurring revenue but in a “Recurring Services Model”.
As SaaS vendors host the application, they effectively become part of the IT organization of their customers. Hence, tech support is a vendor internal activity. That fact results in a very different channel structure.
Because of the different structure and services in the SaaS model, channels are no longer “resellers” or “Value Added Resellers” they are – CATALYSTS. Catalysts are companies or individuals that understand the various business needs in terms of organizational improvements in areas such as Sales, Marketing, HR, Operations, Logistics etc. and also understand the advantages of SaaS-based applications. They help small, medium and large firms transform their “Information Technology” into “Information Management”.
And that SaaS partners should value add …
Given there is nothing to resell, nothing to technically install and no opportunity to provide any kind of logistics, what can a successful SaaS partner contribute?
The most important value a partner can add is to provide business-process-relevant implementation and integration services to the customers. While an application may be generally easy to use, the more important question within an organization is “how are we all going to use it together”. SaaS partners are not “resellers” delivering software, but rather catalysts for this new industry, making it work long term. They help customers become quickly productive and ensure the service is fully embedded into organizational processes.
In order to do that successfully, a SaaS Catalyst needs to understand their customer’s business processes and have a good understanding of the respective verticals. A CRM, HR, Project Management or Marketing Application can be used in variety of ways, but the partner helps orchestrate the configuration and implementation to shorten the “time to value.”
SaaS enables even very small companies who don’t have IT departments or capabilities to leverage software to better run their business. SaaS Catalysts will play a very strategic role in the vendors’ success in reaching that market and retain customers long term.
I completely agree. Some other good material in the full document.
20 December 2008 #