‘VA‘Rs must begin to understan‘d
where their expertise is and become
known for their ability in a certain area.
TAYLOR MACDONALD, CHIEF CHANNEL AND STRATEGY OFFICER, SAGE SOFTWARE ‘
way to boost revenues and strengthen the relationship between partner and client.
“VARs that integrate SaaS solutions into their
value proposition will be able to provide their customers the widest choice of [protection] options,”
says IBM’s Mitchell. “The VARs that provide hybrid solutions—combining a SaaS solution with
an on-premise data backup, for example—can
help address those concerns.”
COMBO DEALS
It is steadily becoming easier for solution
providers to offer both SaaS and on-premise applications. Top-tier software developers are creating SaaS programs and integrating them into their
channel programs. “We’re encouraging our channel partners to select solutions from our portfolio
of SaaS providers and incorporate them into their
offerings,” says IBM’s Mitchell.
For example, Microsoft created the SaaS Incubation Center Program to assist partners with
the commercial, financial, and technical challenges often surrounding the creation of a SaaS
application. The Redmond, Wash.-based software
giant’s partner program specifically addresses
SaaS, and gives partners access to product and
solution information, sales and marketing support, licensing help, support and security options,
and a training and events calendar.
For its part, Oracle unveiled Siebel CRM
On Demand Release 14, which is designed
for customers ranging from SMBs to enterprises.
Pricing begins at $70 per user. The Redwood
Shores, Calif.-based developer has other SaaS solutions as well, such as PeopleSoft On Demand.
Given the momentum behind SaaS, it is critical that VARs embrace their vendor partners’
SaaS solutions. By the end of 2011, the global
market for SaaS is expected to reach $19.3 billion, compared with $6.3 billion in 2006, according to analyst firm Gartner Inc. And research firm
Pacific Crest estimates that the market for hosted
software will hit $10 billion by 2009.
“IBM recognizes that companies can’t simply
transform their current license-based applications
and deliver them over the Internet,” Mitchell
says. “As more and more companies are adopting this model, they are beginning to realize that
it is imperative to align themselves with strategic
partners who will offer technical expertise to help
transition to the model, provide reliable services
support to host their applications, and most of all,
make the transition profitable.”
SaaS helped drive profitability at Sonic
Foundry Inc., a developer of media communications software based in Madison, Wis. In its most
recent fiscal quarter, according to the company’s
quarterly financial report, service billings, comprising SaaS and support contracts, installation,
training, rental, and event and content hosting
services, were $2.17 million. That’s about 38
percent of net billings for the quarter and an
increase of 136 percent over the $918,000 the
company billed in the third quarter of fiscal
2006. With boosts like that, it is not surprising that developers continue to invest their resources in SaaS-related technology and affiliated
channel programs.
LOOKING AHEAD
Working closely with their vendor partners,
VARs can increase profitability and enhance
customer relationships by incorporating SaaS
into the solutions they offer. As in any new
product type or delivery mechanism, there is a
learning curve. And any time there is learning
involved, fast-moving SMB VARs can reap
some valuable rewards.
ALISON DIANA isafreelance writerand editor
who has been covering the channel for almost
18 years. Reach her at alisondiana@hotmail.com.
FOR MORE
INFORMATION
Forrester Research Inc.:
Downloadable teleconference:
Will a SaaS Deployment Yield
Better ROI Than On-Premise
for ERP?
www.ChannelProOnline.com/oct/
forrester.html
Gartner Inc.: Searchable access
to free SaaS research.
www.gartner.com
IBM SaaS Resources:
www.ibm.com/developerworks/
spaces/saas
Microsoft SaaS Resources:
www.microsoft.com/service-
providers/saas/ business.mspx
Oracle SaaS whitepaper:
www.ChannelProOnline.com/oct/
oracle.html
Sage Software:
Small business solutions, including
SaaS offerings.
www.sagesoftware.com/products
Salesforce.com:
Credited with a leadership role
in SaaS adoption.
www.salesforce.com
