SaaS: Five Challenges For The Channel

Building Trust
With SaaS, customers don't have physical ownership of the application, so they're buying the value that the provider is delivering. Maintaining that trust relationship is a matter of communicating what SaaS can and can't do when it comes to improving business efficiency. VARs that make outlandish, P.T. Barnum-like claims about SaaS do sully the waters for the entire IT channel.

Customers sometime think that because software is in the cloud, leveraging an application is a matter of flipping the switch. Solution providers therefore need to set the proper expectations, and explain that the road to SaaS involves a lot of training and patience.

Finding SaaS Talent
SaaS is still software, and the hiring process begins with finding talented software developers and architects and letting them loose on projects. But SaaS isn't just a matter of finding the best and brightest technology minds.

SaaS requires a certain type of iterative thinking and multitasking ability that not everyone possesses. For sales and marketing positions, the most qualified prospects on paper aren't always capable of grasping the nuances of SaaS, or they might be stuck in the old software delivery model. VARs need to remind new SaaS hires that they're not in Kansas anymore.

Growing Faster
Speed is of the essence with SaaS. Deal sizes are smaller with SaaS than in on-premise software deployments. SaaS vendors take the top line revenue, and partners get a commission, but there can be a huge discrepancy between on-premise and SaaS revenue. To compensate, VARs need to crank up the frequency with which they cultivate, sow, and harvest the fruits of SaaS opportunity.

The good news is that SaaS is all about speed. With quicker implementation cycles than on-premise software projects, VARs that find creative ways to accelerate their business and sales processes will find themselves fishing in a fast-moving river of opportunities, like grizzly bears during a salmon run.

Coping With Outages
Network outages are inevitable, and certain aspects of outages are beyond the control of SaaS providers. But VARs can mitigate customer anger over outages by communicating these incidents to customers and staying in close contact with customers until the issue is resolved.

If a SaaS provider suffers an outage or two, and the VAR's client insists on finding another provider, the VAR must be clear about the huge amount of reconfiguration that's going to be necessary. That's why it's crucial to sit down with clients beforehand and map out a migration or exit strategy.

Morphing Into Business Consultants
SaaS is moving the traditional VAR's 'cheese' by taking away legacy revenue from day-to-day grunt work associated with on-premise software deployments. But the dollars are still there, and VARs that learn to be creative 'mice' will find out how to get them.

SaaS creates the need for higher-end services that many VARs have traditionally offered, so there's a significant learning curve. The key, according to SaaS vendors, is for solution providers to intensely study their customer's business and figure out where to add value in the form of ongoing business consulting services.