The Role of VARs in SaaS
I just got back from Las Vegas from having participated in a panel for CompTIA Breakaway 2009 where the focus of the panel was on the role that VARs can play in the SaaS space.
First I need to get something off my chest that has been boiling inside of me since my first few conversations with some of the attendees and VARs at the conference: Hosted Exchange or managed IIS servers is NOT SaaS, call it Managed Services, or whatever you want to call it but it certainly is NOT SaaS and certainly not PaaS for that matter.
Now with that out of the way ;) it doesn’t mean that VARs don’t have a role in SaaS and frankly the reason why most VARs use the term SaaS interchangeably with Managed Services is because they really can’t be bothered with the details that actually define SaaS; they simply care that you use it as you go and it lives outside of your premises. SaaS just happens to be today’s cool buzzword, so why not ride the wave, right?
Anyways, back to the point I wanted to talk about; VARs and Channel players are normally considered the Trusted Expert for their customers and as such they can still provide expertise on SaaS applications and arguably much easier than traditional on premises applications.
There are many ways that VARs can make money in SaaS and a lot of them, the same ways they make money today; here are just a few:
Commissions: Many SaaS vendors have referral programs were you can make a decent commission by a simple referral. Even if some of the vendors don’t have an official referral program, I’m sure that most would be happy to talk to you about making something like that work for you if you are bringing them real business that wasn’t already part of their pipeline.
Training & Support: Become real experts of the solutions that you are proposing and go to the extent to offer training & support. Even if the SaaS vendors offer support and training on their own, you have the upper hand of up-selling your existing customers who already trust you as their loyal advisor plus it will make you that much better selling the solution since you know it so well.
Integrations: Native SaaS applications are inherently built to scale (the ones that are properly architected at least and if yours isn’t, check out SaaSGrid for some help!), this requires the applications to be built as service oriented applications so by default most properly written SaaS applications will automatically expose APIs for extensibility and integrations via web services. If you are a technical enough shop, you can actually provide value added services by extending the SaaS application or bridging two solutions much easier than you would normally be able to do in an on premises application.
Consolidation: If you are offering your customers multiple services, you can actually consolidate the services for them and give them additional benefits like central billing and alike.
Clearly these are only a few ways that VARs can play a role in the space and some changes to your core business model might need to be made but what I’m interested to know is really what you think? Are you a VAR making money with SaaS? If so, what are you doing and how is it different than your other traditional on premises offerings; also, how is it affecting your bottom line? If not, why not?
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