Taking saas to market : Which Channel to chose
Software as a service model is bringing specialist software to small to medium size businesses like never before. Its a great news for the SMB business owners, and the market size is huge across the globe so why hasn’t the saas caught a wildfire by now already? Aren’t there Independent software vendors(ISVs) who are making such software? Of course there are saas ISV’s but there is a middle problem, the channel. So far, the traditional software were expensive and to implement the same took ages and then further time went in training people for using the software, the very difficulties had created a huge middle market called as Value added resellers(VAR) whose bread and butter were earned from re-selling such non-saas software.
Now for the saas, the implementation time, the huge at a time expense and to top it all, the extensive training are all cut down to the point of extinction. The modern saas software are all easy to use, pay as you go model and instantaneous to start using, hence the role of the VAR is cut down to almost nothing. So the middle market which used to be the most important channel for traditional software’s can no longer be considered for the modern saas software, there is barely any money to be made by them apart from the meager commission fee on the low cost software.
There have been suggestions of using banks and telco’s as the resellers as they are the ones who have a huge repository of the SMB’s and have a strong billing and collection system in place. But are they the right candidate to partner with for selling saas to SMB’s? The concern of the telco’s remain how to sell their packages of hardware incrementally such as phones and notepads to the huge SMB network and bundle the software application along the way. The SMB users across the globe are not entirely happy with the telco service providers for various reasons such as bad network, incorrect billing statements, difficult to get support from customer care which is more often than not lousy, so expecting them to sell and keep customers happy is not a very bankable idea for the saas ISVs. Second option suggested has been the banks. Banks are even less successful at the job than the telco, they might be excellent with their finance but expecting a bank to sell you a business software is more often than not quite an amusing idea to most of the people you may ask. Unless the bank is suggesting you some personal finance and other finance related software, which makes sense.So who fits the bill now?
The channel partner for the saas ISVs has to be a company which has a close online relationship with the SMBs. If you are expecting to sell an online based software your channel partner should be based online too. People use several online products today day to day in their lives, google, facebook, amazon and so many more. Perhaps these could be the channel partner ISVs should look for? Google is already running its appstore and is populated with many software with a live feedback from its current users. Its certainly lacks the famous human factor as once was the concern when online applications were coming up, but the very reason can be its strength. Because of low investment in manpower, these channels would be able to make better money than the traditional VARs.
There are only few big names who are currently doing this and hence there is a huge space in this arena for new players to come and grab the opportunity. Maybe saas will be a wildfire once the channel partner goes online too?
