Channel for SaaS

ISV’s adopting SaaS are facing challenge in creating a new business line which is different from the traditional license based revenue stream. One of the major challenge for them is to create a channel to sell their services. SMB's are too fragmented and difficult to reach even with a broad based campaigns, so creating channels is becoming a big requirement for SaaS vendors.

Today there are 3 different channels available

1. Direct sales by the ISV

2. Resellers

3. Market places

Today the resellers are primarily telco's or financial service providers or business service providers. They take the service in a bulk contract, rebrand and deliver it to their customers, example for such resellers could be XO Communication, AT&T, AMEX

The Market place provides a different model, where the buyers and sellers meet. Market place can be

• Vertical / Horizontal focussed like AppExchange, which has supplimentary applications for the CRM product from salesforce
• Demographic based like BT's market place for SaaS, which is more tagetted towards UK market
• Market place for Resellers like Jamcracker's JSDN

In future we will see more market places proliferating in the market. ISV's should build proper infrastructure to manage the reseller and market place channel, who knows some large ISV's might have thousands of resellers and participate in 10 - 20 market places in future and with out an infrastructure to manage that, it will be difficult for them .

Microsoft's software + Services - Discussion between Gianpaolo and Phil

I have great respect for both Phil and Gianpaolo, most of my understanding of the SaaS market and the architecture principles come from their posts. I was following the discussion that was happening between Phil and Gianpaolo on Microsoft's strategy on S+S, in this post i have covered my perspective on this discussion.

I accept with Gianpaolo that what is required for the Office custmers is not hosted office, but services that would help them to collaborate. In one of my previous post on office 2.0 i had discussed a similar view on this topic.

Ofcourse, we cannot take a similar argument for large enterprise applications, which require huge cost for setting up and running the software, which is why SaaS came into existance. I think a strategy involving a Managed Appliance (software) and Services would work well for Enterprise Apps. Staying connected with in the customer's network through an appliance strategy will create huge potential to deliver multiple network based services to the enterprises.