THINK IT Services

One of the hottest topics of discussion in the Software-as-a-Service (SaaS) market and broader Cloud Computing arena is the role of the channel in selling and delivering these web-based services and solutions. What few people have discussed is the opportunity for SaaS companies, as well as Cloud vendors, to become important channels to market themselves.

The most intriguing scenario in this SaaS-as-a-Channel (SaaC) possibility revolves around the Data-as-a-Service (DaaS) idea. The most recent illustration of this scenario is today’s announcement by Host Analytics of a new Decision Hub service which pulls industry data from a variety of third-party information service providers, such as Edgar Online and Data.Gov, into Host Analytics’ SaaS-based corporate performance management (CPM) solution.

The Decision Hub enables corporate decision-makers to examine their company performance in relation to a broader set of industry benchmark data or key performance indicators (KPIs).

This isn’t a new idea, but today’s leading SaaS vendors have the opportunity to aggregate this information from a variety of data sources more quickly and economically because of an assortment of application program interfaces (APIs) and generally accepted web services.

Another case in point is Salesforce.com which has had a longstanding relationship with Reuters and acquired Jigsaw earlier this year to pump valuable data through its customer relationship management (CRM) and salesforce automation (SFA) solutions to help its users achieve their business objectives.

So, as these data aggregation capabilities become more prevalent, it changes the nature of the SaaS company. Rather than simply being an application provider, it is now providing a higher level business service powered by a mixture of third-party data sources.

In essence, SaaS companies are now becoming information distributors in addition to application providers. In other words, they are now becoming an increasingly important channel to market for information service providers.

It will be interesting to watch other types of vendors attempt to employ SaaS companies and Cloud service providers as new channel partners as well. Of course, as they do, they will encounter a new set of challenges regarding how to properly package, price and promote these new relationships.

Anyone who has been in the Software-as-a-Service (SaaS) business for a while is well-aware that this model has a fundamental impact on every aspect of the software business. However, a growing number of established independent software vendors (ISVs) are just beginning to venture down this path and are confronting these painful realities for the first time.

Most ISVs are fixated on how SaaS changes the architecture of their applications and impacts their revenue streams. These are big issues, but SaaS disrupts traditional sales and support models as well. I had an opportunity to attend two events in the Boston area last week that addressed these two issues.

The first was a roundtable session hosted by The First Wednesday Group, an organization focused on software support issues, which examined the unique support challenges of SaaS. The session was led by Renee Bochman, Vice President of Support Services at Axeda, a provider of  a cloud platform and applications which enable companies to connect their products remotely. 

Renee provided candid insights about the support challenges created by SaaS, starting with the changing nature of the end-user and the kind of support questions which they pose. While she admitted that the company is still learning how to respond to these challenges, she was also convinced that moving to SaaS has dramatically improved Axeda’s understanding of its customers and strengthened its customer satisfaction, resulting in greater profitability and giving the company a stronger competitive advantage.

I will be leading a workshop which will delve more deeply into SaaS support at the First Wednesday Group’s Voice of the Customer Conference on Wednesday, October 27 at 1:00-4:30pm ET. Click here to learn more and register for this workshop.

The second event was hosted by the Boston College Tech Counciland looked at the sales challenges associated with SaaS. Although David Skok of Matrix Partners gave a fascinating talk about the power of web-based, viral marketing, the most interesting revelations came from Greg Pesik, President/CEO of Passkey, a SaaS-based group reservation and optimization provider.

Unlike many SaaS companies which strive to encourage prospective end-user customers to try their solutions on a trial-basis via the web to acquire new customers quickly, Passkey uses traditional face-to-face sales techniques to convince CXOs that their solution can help them dramatically improve their business success. And, rather than charge a nominal fee, Passkey has won sales deals worth tens or even hundreds of thousands of dollars. But most interestingly, Passkey is able to convince its customers to pay upfront for 2-3 year agreements. That is because Passkey processes billions of dollars in room reservations on behalf of its customers at a time when the travel industry is facing unprecedented challenges. Because of these tangible business benefits, Passkey clearly demonstrates that there is more than one way to ’skin a cat’when it comes to selling SaaS.

The same holds true when it comes to other aspects of succeeding in the SaaS. In the same way that the broader software industry is composed of various business models, the SaaS market is also evolving to encompass multiple paths to success.

THINKstrategies announced today that Earth Class Mail has been named the latest winner of the Best of SaaS Showplace (BoSS) Awards program, which is aimed at promoting the measurable business benefits being delivered by today’s Software-as-a-Service (SaaS) solutions.

The BoSS Awards is an ongoing program which recognizes SaaS companies that are producing tangible business benefits for specific user organizations. These benefits can include increased sales, lower costs, higher customer satisfaction, faster operations and greater profitability.

Earth Class Mail provides postal online mail management services designed to meet the needs of individuals, small businesses and international license partners. Services include: document scanning and storage, check deposit, mail and package forwarding, will-call services and secure shredding and recycling.

Click here to read the announcement about the measurable business benefits which earned Earth Class Mail a BoSS Award.

Click here to learn more about the BoSS Award program or to apply for an Award.

Based on the success of the BoSS Awards program which focuses on SaaS solutions, THINKstrategies has launched the Cloud Computing Business Value (CCBV) Awards program to recognize companies which are delivering Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) solutions producing measurable business benefits for their customers.

For more information regarding the CCBV Awards, go to http://www.thinkstrategies.com/cloudcomputingawards.html.

Verizon unveiled a new cloud computing offering yesterday, the latest in its series of “Computing as a Service” (CaaS) packages, aimed at small and mid-sized businesses (SMBs).

The real target of the announcement is Amazon Web Services (AWS), which has pioneered the Infrastructure-as-a-Service (IaaS) frontier that has redefined the way computing power is packaged and delivered to the marketplace.

Although AWS hasn’t threatened to enter the telecom business, like Google, its success in the cloud computing market has raised the bar for telcos who have been laboring in the hosting business for many years.

AWS’s claim to fame in the cloud computing arena has been the hyper-elasticity and minuscule price-points of its IaaS solutions, which are bolstered by a myriad of third-party tools vendors. These services have primarily appealed to tech-savvy users, large and small, willing to cobble together these on-demand, online resources to meet their situational computing needs.

Verizon is countering with a bundled program which promises greater ease-of-deployment and more management control for SMBs with less hard-core technology skills and more comfortable doing business with service providers they know.

Amazon continues to challenge the tech industry’s computing norms by offering increasingly frictionless service delivery and spot-pricing for its cloud computing capabilities. The most recent example is its new EC2 Micro Instances low cost option for low throughput applications.

Unable to match AWS on price, Verizon (and other major players such as IBM, AT&T, etc.) is betting on the greater comfort levels which mainstream businesses feel toward established brand-name companies who can serve as strategic sources boasting better support.

The good news about the heightening competition in the cloud computing market is that the growth in demand is not likely to be satisfied or subside anytime soon.

After casting doubts about the durability of the cloud computing model for the past few years, the major market research firms now admit that interest and adoption of cloud computing by organizations of all sizes across every industry is exploding.

Therefore, today’s upstarts as well as the fast-following established players can both compete on their own terms and find success. However, no industry can survive a ‘cloud rush’ like today’s proliferation of players without a shakeout.

A few cloud vendors will survive trying to compete on price in a cost-sensitive marketplace. But, most of the long-term winners will be those cloud vendors who offer other value-propositions, such as greater ease-of-deployment and support, and win the confidence of customers despite their premium prices.

SMBs and large-scale enterprises will benefit from the escalating competition in the cloud which is producing faster innovation and accelerated maturation of service provider business models.