Traditional modes of selling software are becoming problematic for resellers
looking to go beyond box-dropping. Channel
partners focusing on packaged, traditional ways of selling software are normally at the mercy of vendors’ product rollout
schedules, with all the uncertainty of revenue and repeat custom that it brings.
Growing diversification in industries means niche resellers are also under pressure to bridge the customisation gap for each customer. This means that the long-term benefit for resellers is limited, in part because time and money is invested inefficiently on one-off projects instead of recurring revenue.
Software-as-a-service (SaaS) is disrupting the old business models, as a complement to on-premises application sales. In times of financial uncertainty, customers can be nervous about signing up for expensive software implementations.
Hosted, on-demand software requires few upfront hardware costs and subscription-style pricing offers far greater flexibility, including an ability to scale the number of users up or down as required.
Unlike on-premises applications, there may be no fees when a version is
upgraded and no complex deployment to worry
about because the application is hosted elsewhere. Then there are the benefits of outsourced datacentres and automatic application maintenance, saving the customer energy, space and money.
SaaS helps users access their systems anywhere and any time, in real-time. Many businesses require employees to fit the business in around family life or a day job. Many more businesses simply need to access their systems 24 hours a day.
Mid-market and enterprise businesses are also moving into new locations or adopting remote and flexible working policies. On top of that, customers are beginning to demand the kind of benefits offered by web-based applications from their existing infrastructure. By offering SaaS applications alongside traditional on-site software, customers get to choose which is best for them.
So what is in it for the channel? SaaS affords many benefits that traditional
applications find hard to match. The
subscription-based model provides the vendor and reseller with a solid opportunity to earn ongoing revenue from a single sale.
Until now, the channel has relied on support and vendor upgrades for repeat revenue, but both can be risky. If upgrades damage the customisation or integration with other applications, or do not meet the customer’s needs, that ongoing revenue stream may be lost.
With SaaS there is no possibility of this upgrade hassle. Any customisation in place before an upgrade is carried forward. This can be a huge obstacle for packaged software, where a business might be forced to hire a consultant to re-customise their setup when they want to upgrade.
Development platforms built on hosted suites represent a new mode of software
sales, by allowing resellers to build
highly tailored applications and then sell them multiple times to their customers.
An example of how this works is Nolan Computers. Nolan used NetSuite’s SuiteBundler SaaS customisation platform to add a fixed asset management module to the core NetSuite application.
The module was designed to enable growing businesses to maintain all aspects of their fixed assets, from depreciation to maintenance schedules and insurance.
By developing this micro-vertical application on a hosted platform, it can be rolled out any number of times to any number of customers.
While this particular example relates to back-office operations, the flexibility of SaaS means resellers can develop their own application for any specific vertical. One innovative reseller has built highly specialised seaport management functionality on top of a hosted suite, adding niche features to manage traffic.
Channel partners not only develop and re-use their own SaaS applications for increased revenues, but can use SaaS to appeal to more customers through increased knowledge and expertise.
Businesses are turning to SaaS to deliver flexible, economic and scalable solutions that help them extend into new locations. Combined with the huge development potential SaaS has to offer the channel, hosted software is increasingly appealing for resellers and end users alike.
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