How VARs benefit from SaaS
Moving from selling on-premises solutions to SaaS is just one in a never-ending series of industry changes. It means resellers will have to change the way they do things, but it won't be the first time. To be sure, there are going to be lost revenues, but that's inevitable. VARs that want to stay in business will look at ways to replace those lost revenues, and when you look at the big picture, there are benefits from the SaaS sales model as well.
There's still plenty of value-add VARs and system integrators can offer, especially with larger deployments. "The value-add will be the security component, the management of upgrades and access to new features, as well as the creation of custom client portals," says Stephanie Atkinson, principal analyst at Compass Intelligence.
Despite complaints and resistance to change, the fact remains that customers will increasingly want SaaS options, and it's up to the resellers and integrators to have that option available. Opting out of the SaaS world on principle would be a disservice to customers, and would only result in lost business.
Traditionally too, channel partners have focused less on small and midsize business customers, preferring to seek out the bigger deals. SaaS, which appeals more to the SMB market, will ultimately give resellers an opportunity to target this market more effectively with an easy-to-sell and easy-to-maintain offering.
To survive, VARs and other channel partners will have to re-invent themselves, but so will the vendors. Channel programs that revolved around providing incentives for partners to sell high-margin, on-premises point products just don't work in the SaaS world. Dave Kubick, Vice President Worldwide of Channels and Alliances at Iron Mountain Digital, a vendor of SaaS and storage-as-a-service data backup and archival solutions says that the best channel partner approaching the SaaS world is one who can create an overall value proposition as opposed to just selling individual products. "If you're just in the business of selling backup and recovery, that is a time-based relationship. You're not going to last very long. But if you're doing it in accordance with other offerings, and complementing other types of products, then your ability to garner margins, retain a customer for a period of time, and enjoy compounding recurring revenues, will certainly offset any short-term loss of top line revenue or top line margin."
Ultimately, though dealing in SaaS solutions will eliminate the huge up-front fees that VARs are used to, the new model provides for more compounding, recurring revenuesâ€”making it much easier to withstand the ups and downs of the industry. This makes the modern-day VAR who embraces SaaS as the primary delivery model "recession-proof"â€”and in today's economy, that's important.