Virtual Trade Show: Vendors Urge VARs To Embrace SaaS

That was a central message of a Tuesday panel discussion during Everything Channel's Virtual Trade Show, in which several SaaS vendors discussed how VARs can take advantage of the technology shift that SaaS represents. The panel, moderated by Robert DeMarzo, senior vice president and editorial director of Everything Channel, addressed key sticking points that exist around SaaS in the channel.

One thorny issue with SaaS is that some VARs feel it threatens their control of the customer relationship. Microsoft, which last November rolled out SaaS versions of Exchange, Sharepoint, and Office Communications Server, has run into static from partners for its insistence on controlling the billing relationship for these offerings.

Dan Fennell, director of marketing for Microsoft's Online Services group, acknowledged that some partners are concerned over losing their customers but urged them to keep in mind Microsoft's longstanding commitment to the channel, and the opportunities that SaaS creates for them to move higher in the stack.

"I would argue that a billing relationship isn't a customer relationship," Fennell said.

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But Joel Allen, CEO of Allenport, a Princeton, N.J.-based SaaS solution provider, argued that vendors should play a more complementary role with SaaS that doesn't infringe on existing VAR-customer relationships. This is especially important in the SMB segment, he added.

"Whoever provides that additional value owns the customer, and should also handle the first level of support and billing," Allen said.

None of the panelists denied that SaaS necessitates far-reaching changes in terms of how vendors engage with channel partners. Bobby Napiltonia, senior vice president of worldwide channels and alliances at, said these changes are actually beneficial to VARs' ability to build and maintain trusted advisor relationships.

"The cloud has pushed them so far upstream that they're even more of a trusted advisor," Napiltonia said.

SaaS does require VARs to invest in technical training, but in Fennell's view, that's simply a matter of finding the best way to convey the benefits of the technology to customers, something that Microsoft is also figuring out how best to achieve. "Our field is learning what it's like to sell in an online services world. That's the investment that partners need to make," he said.

One common misconception around SaaS is that everything will eventually run only in the cloud, but it's important to realize that there will always be a role for client software, according to Allen. This line of thinking is similar to Software Plus Services, Microsoft's term for a future IT architecture that blends elements of on premise software with cloud based services.

"When people talk about SaaS, many think it's just Web-based, but there's also going to be a client component, and that's where the VARs come into play," Allen said.

Security and mobility are two areas that are driving the most momentum in SaaS because this delivery method makes the most logistical sense, panelists said. In the case of security, SaaS is tailor made for keeping up with the rapid pace of malware development, said Cody Leser, senior director of channel sales at Trend Micro.

"There's no way to push patch files continuously; you have to do it in the cloud," said Leser.

One point on which all panelists agreed is that the economy and the need for greater business efficiency will continue to propel SaaS forward. "The masses are looking at SaaS, and the technology is there from a data center perspective," said Fennell.