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 .