SaaS or on-premise, channel partners and VAR’s are equally important

In the past month, I attended 3 SaaS industry events (Softletter's SaaS University, Salesforce.com's Dreamforce, and SIIA's On-Demand conference) to keep up with what is happening in SaaS and Cloud Computing, and to investigate new partner channels for IP Applications on-demand subscription billing and payments platform.

A key message at all three events was how channel partners and VAR's played a key role in almost every SaaS and Cloud infrastructure vendors' strategy. This was especially gratifying to hear because a couple of months ago I wrote a blog article challenging the wisdom of a significant analyst group that had suggested SaaS companies would not go to market with partners.

When researching to support my argument I came across Intacct, a SaaS company with what appeared to be a mature partner strategy. So at the SIIA On-Demand conference I was not surprised to see Daniel Druker, Intacct's SVP of Marketing and Business Development lead a panel of SaaS executives in a discussion on the importance of channels and VAR's to all of their businesses.

The point is that the SaaS industry from a partnering perspective is no different than the traditional on-premise software business. Software companies, whether on premise or SaaS, still need to develop new markets, deliver vertical expertise and service their customers and channels.VAR's will play a big part.

The Economic Downturn and SaaS Companies - Part 2

While attending the excellent SIIA On Demand conference in San Jose, there was a lot of talk about surviving the economic downturn as a SaaS company.  Many of the points in Part 1 of this blog were discussed (somewhat gratifying) but a more fundamental question was posed.

Are you selling oxygen?

Can companies breathe without your product?  Is your SaaS product a true "need" for businesses to succeed or is it a "nice to have"?  When companies look to trim costs, which column will your product fall into?

In stronger economic times, companies that sell "nice to have" products can grow and prosper.  In down markets, purchasing companies will cut the nice to have products to preserve margins and cash, while keeping those mission critical solutions.

As SaaS companies looking for success in a down market, we need to ensure that we are selling products that are critical to our customer's business success.  Here are several things to focus on:

1. Marketing must emphasise those elements of your products that keep companies running.  Do not promote ‘cool' features; stress the core features that will help drive costs down or revenue up.
2. Product value must be quantified and provided to our product champions.  Ensure that product champions within enterprises have the tools to defend it against the forces of rationalization.  Often the decision to cut will have nothing to do with the department that uses and loves your product. The decision likely comes from the finance department but a strong dollar oriented argument can stay the execution.
3. Think sticky.  Focus energy on integration and engagement with key clients such that the switching costs grow greater than the option to cut or downsize.
4. And ultimately, if your product is not oxygen to your customers, change it or find customers who breathe your particular type of air.