Reaching the SMB – Can Telcos Lead the Charge?

Jun 5, 2007 by

A few months back I wrote this post which discussed trying to get SaaS offerings into the hands of SMBs.  The question was a.) Would traditional channels (e.g. VARs, stores, etc.) play a role and b.) what new channels would develop to push SaaS out to the SMB. Well, a combination of some conversations with telcos as well as this article over at Tech Target helped highlight an answer to b.)

The article discusses the current desire for some telcos to push SaaS services to their business customers, providing the telco a lucrative way to tap into the SaaS space and experience a new revenue stream. But will it be an important channel? In my opinion, absolutely. Telcos already have the SMBs ear: SMBs purchase phone, internet, and other services from telco providers. Practically each and every SMB uses a Telco. SaaS really fits the telco product mix well, augmenting their offering and exposing SMBs (and micro-businesses, for that matter) to our beloved SaaS distribution model. Could telcos be the answer to pushing the model deep into customer territory? I think it has a good shot. Any thoughts? Do you see another channel taking the lead or will telcos not understand the dynamics well enough to capitalize?

 

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Do Traditional Channels Matter in a SaaS World?

Feb 15, 2007 by

From the vendor’s perspective, SaaS is more than just a distribution model; it’s a new way of doing business. Many of you have heard it before; no more large license-fee deals, issues with compensating your sales team, planning around incrementally growing yet recurring revenue, etc. The single most important question, however, is “How do I sell?” SaaS poses an interesting scenario: as a provider, you now have extended your distribution power and reduced your per-unit cost basis low enough that your application is a no-brainer deal for the small-to-medium sized business (SMB), but how do you reach these SMBs? Obviously, the mid to enterprise market has warmed up to SaaS so that’s a great market to tackle, but there are established IT inroads into members of this market. There are many, many SMBs out there each without a CIO or CTO or any other obvious “goto” inroad. Getting the idea of on-tap software functionality out to this market is a very big challenge. In my opinion, SaaS providers that attempt to leverage traditional distribution and sales channels with SMBs in mind probably won’t find it to be too successful. I’m betting that SaaS providers targeting this space will have to use a lot of creativity to achieve a broad and deep reach across the SMB space.

A good starting point would be to answer the question “Where do SMBs do business?” or “Who do SMBs work with that I can utilize as channels?” An example (albeit experimental in feel and nature) was NetSuite’s deal with CompUSA last year; CompUSA has many SMBs as clients, and could potentially act as a point of sale for NetSuite subscriptions as well as provide NetSuite training to customers. Although this might not be the “killer channel”, it’s a decent example of creativity. We’ll see more of this unfold as vendors try and tackle the space. Any thoughts? If you’re a SaaS provider, have you had any success with some sort of non-traditional channel or partnership pairing?

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