At GetApp.com we have always been convinced that a new channel will need to emerge soon to address the challenges faced by the Cloud vendors as well as the traditional vendors embracing a SaaS strategy.
With the advent of Software-as-a-Service (SaaS), the software vendor is now responsible for the delivery, hosting, upgrades and support of the application Is there enough work (and money ?) for the traditional channel partners to engage with customers and be viable in this scenario ?
In the mean time millions of SMBs are embracing every day business software for the first time in their existence moving away from Excel & Exchange. This represents a huge opportunity for SaaS and Cloud vendors to reach out to millions of new customers. But how to do it efficiently maintaining the customer acquisition cost low and scale globally ?….leveraging the channel will be key but a new approach and mentality is needed.
To illustrate those points, check out this great discussion between Kamesh Pemmaraju from Sandhillcom and Taylor Macdonald and Daniel Druker of Intacct.
Key Takeaways
Cloud companies have gained successes on the back of the cost savings, rapid innovation, and easy to use value propositions compared to their on-premise predecessors. But for them to really create a massive exodus of companies towards the cloud, they have to engage with the Channel.
- As the opportunities for large implementations/upgrades dwindle, the pure-play SI vendors need to re-focus on subject matter expertise, high touch value-added services that still need to be delivered.
- Channel partners now have an opportunity to go up the value chain instead of low-end activities like hardware upgrades, help-desk, maintenance and so on. They should focus on areas like Business Process orchestration, integration, and building vertical applications for the micro-domains (For example: hospitality, not for profit, professional services in case of Intacct).
- This gives them a wonderful opportunity to generate software revenue with the Intellectual Property they built that they can then sell at higher margins and create sticky customers for themselves.
- Cloud companies that want to be channel friendly need to develop channel-centric cultures from the CEO on down. Invest in key executives that bring channel experience to the table and be prepared to focus their product roadmap investments on features like development tools and customization capabilities that are attractive to channel partners
What is your Channel Strategy ?
