What are the different types of VAR partnership models available for SaaS products?

As a SaaS company, you know that using channel sales can generate more business and increase revenue without hiring a sales team. However, it is important to choose a sales channel that suits your business model, and even better if the channel you choose adds value for your potential customer and can help you guide them through the software buying process.
There are three common types of channel relationships that SaaS companies can use. Cost, flexibility and market adaptability are three major factors that will determine which channel to choose, and you need to understand which channel relates best to your customers’ requirements. The three sales channels are:
Application Developer Model
The Application Developer Model is slightly different in that the vendor directly supports the customer and the customer pays the vendor. However, a third party can help the customer set up or customize the vendor’s software. For example, Zoho CRM sells its service directly to customers and customers pay them directly.
Brokerage Channel Model
The Brokerage Channel Model helps customize software for customers. This may entail bundling or stacking software to customize a solution for customers; this method can also include account management. It’s similar to an insurance broker sourcing and building a policy for you and works best for simple SaaS products that focus on high transactional requirements.
Value Added Reseller (VAR)
VAR provides customers with a fully customized software service. The reseller builds, operates, services and supports and also invoices the customer. The reseller will then pay a license fee or royalties back to the vendor or in some cases the customer can pay the license fee directly to the vendor.
For example, Roketto is a HubSpot Certified Partner, which means that we can sell HubSpot Licenses to our clients. Clients who buy a HubSpot license through Roketto are usually going to work with us for inbound marketing services, and the Hubspot software helps us in our service delivery, marketing strategy and with measuring and tracking results.
And because Roketto is a VAR certified partner with Hubspot, we can provide them with a special link that lets them save money on the regular $3000 onboarding fee. The client will pay HubSpot directly, but we will provide the client with training and support. However, we are the reseller who makes the sale to the client on the behalf of Hubspot.

Resellers, integrators and IT services companies -- channel partners of all types -- are evaluating cloud computing, with some firms building their businesses around that software delivery model.
Companies such as Google Inc., NetSuite Inc. and Salesforce.com Inc. offer on-demand, vendor-hosted Software as a Service (SaaS). Products range from office productivity wares to enterprise applications. But for service and solution providers, the cloud provides more than an application set. Those players can tap vendor-provided development tools, hosting infrastructure, storage and data center capacity.
While partners fear disintermediation -- many say the model shifts account control from third-party service providers to the vendor/host -- the cloud providers invite channel interaction. Partners can resell Software as a Service solutions or customize a solution for a given customer segment. They can also wrap services around the on-demand offerings: up-front business consulting, implementation assistance, systems integration with existing systems, and post-implementation support.
Daston Corp.'s path to partnership started when the company tapped NetSuite to provide an array of business applications: customer relationship management (CRM), finance, human resources and payroll. The McLean, Va.-based professional services firm is a federal contractor that must operate in accordance with the Defense Contract Audit Agency (DCAA) requirements. Daston modified NetSuite to meet the compliance demand.
Now the company sells its instance of NetSuite -- dubbed DCAA On-Demand -- to other government contractors as a prepackaged solution, said Greg Callen, senior vice president at Daston. The company offers consulting and implementation support services as well.
"We've developed a whole business line around a NetSuite practice," he said.
Appirio Inc., meanwhile, has built its entire business around accelerating the adoption of on-demand software. The San Mateo, Calif., company's services lineup includes strategy, implementation and education. Appirio partners in the cloud with Google and Salesforce.com.
Appirio leverages Salesforce.com's cloud to develop custom applications for such clients as CRC Health Group, a provider of drug and alcohol treatment services. The company has also built a Salesforce.com-based professional services automation solution that it plans to release in the next two to three months, said Narinder Singh, founder of Appirio.
Cloud computing as development environment
On the custom development side, channel partners take advantage of the platform cloud providers offer.

To work with vendors, VARs have to become authorized and meet certain requirements. For example, some vendors like HubSpot require partners to hit yearly revenue targets, or take technical and sales training programs and become certified sellers.
For example, when customers are researching software, they may find that the software they need doesn’t exist in one package; a VAR can help customize the software to their specific requirements. VARs are particularly helpful for certain industries. In fact, many VARs specialize in certain industries such as the financial or healthcare industries, so they understand the regulations and technical requirements of their customers, and they can provide customized software with greater detail and efficiency because of their knowledge of a specific industry. These VARs also have the background knowledge and data to understand what your market’s pain points are at each stage of the funnel.
While the Value Added Reseller Channel is a popular choice, the traditional VAR model may not be the right choice for all SaaS products. Not to worry, just like putting a porsche engine in a old VW campervan, you can also customize your VAR partner model with an engine that suits your software. You may be able to choose one of the following options:
- Advocate Partners offer a low-touch partnership where your software will be recommended to the partner’s customers only when it makes sense.
- Referral partners will pass leads to your company in exchange for commission on either the lead or the sale.
- Strategic partners offers a higher level of partnership where your company will work more closely with a partner company towards common goals aligned with the same messaging and brand values.
At Roketto, being a VAR partner with Hubspot has proven to be a most valuable asset for our customers. Using Hubspot marketing software makes our process more efficient and gives us immediate access to the information we need to develop an effective inbound marketing strategy for our customers that engages at each level of the buyer journey.

- Teaming Partners – a partnership designed for one project opportunity at a time or an occasional need to resell VoltDB to satisfy specific customer requirement. This type of relationship tends to be used by system integrators.
- Certified System Integrators – a partnership designed to provide valued differentiation and a measure of quality for VoltDB customers who engage professional services and consulting organizations to design and develop VoltDB solutions.
- VARs – formalized programs that provide a continuing relationship for the partner to resell full use licenses of VoltDB products and services as part of an integrated solution sold to various customers.
- Strategic Partnerships – a relationship that typically requires customized terms crafted on a case-by-case basis, these partnerships will include OEMs looking to embed VoltDB as part of an application, appliance or other complete integrated solution offering.
VoltDB Launches Partner Program
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Value Added Resellers
The VAR partner program is for partners who offer customized solutions - essentially a combination of domain, vertical, or application expertise that includes ProActive School technology. VAR partners focus mainly on driving license revenue through the resale of all or part of the ProActive School product suite. These partners also offer professional services to support the deployment of our technology. This highly organized program provides a clearly defined environment for VARs to work within and includes four achievement levels: Platinum, Gold, Silver, and Bronze. Top-performing VARs are also eligible to participate in our Authorized Education and Authorized Consulting partner programs.
Through this program, VARs can:
Increase revenue: ProActive School helps our partners create new business opportunities to maximize revenue potential and close more deals at higher margin with the broadest range of new and improved services that showcase high incremental value.
Increase customer satisfaction: Through the provision of market leading ProActive technologies we elevate the value of VAR offerings enabling our partners to focus on delivering robust solutions that provide their customers with access to the valuable data locked inside applications.
Deploy faster: Our ProActive tools and framework enable deployment in weeks and eliminate the maintenance and customization effort associated with custom development.
Superior account management and a host of other benefits are available to VARs through this program. Depending on achievement level, partners are eligible to receive services discounts, referrals, demo licenses, and sales collateral. Marketing support includes access to marketing funds, the partner extranet, events, newsletters, logos, jointly branded collateral, and more. We offer web, email, phone-based technical support and a full range of product training and certification options.
Partner requirements vary depending on achievement level but are predominantly determined by annual revenue commitments. Annual program fees are mandatory for all partner levels except Bronze, although this may vary by country. Partners must also commit to sales and pre-sales training activities as well as achieve technical certifications for the products they sell.
Contact email@example.com for more information.

Vendor Programs Guide
Vendor Programs | Technology | Computer Hardware
A descriptive, comprehensive guide to the vast array of vendor programs available to VARs and channel partners.
PartnerDirect is designed for business owners who are interested in taking advantage of the programs marketing, support, and financing benefits to grow their company.
The F5 Advantage Partner Program is intended for well-established, financially-stable businesses with extensive sales experience and clients who are likely to be interested in F5s products and services.
AMD's Fusion Channel Partner program offers Select, Premier and Elite tiers. Partners are categorized by business models and goals.
Under the Fujitsu Accelerator Partner program partners can participate in the mobile program, the enterprise program, retail program, or the Interstage software program depending on their business needs.
SonicWall operates a two-tier distribution model that includes distributors and channel partners. The company works with about 7,000 resellers in the U.S.
Lenovos Partner Network is tiered by Premium and Registered partners. Business Partner levels are determined by sales volume and certifications held.
The Samsung Power Partner Program is tiered with Platinum, Gold, Silver and Bronze levels. The program allows partners to attain levels by product categorydisplays, mobile and printers.
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The Concerto Partner Network offers a choice of partnering models. Discuss which model best suits your business objectives with a Concerto Partner Development Specialist today!
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Here are five best practices cloud service providers might want to consider as they develop their own channel partner programs.
1. Clearly define objectives and incentives.
Recruiting the right cloud partners is a big factor in building a successful channel program. Even though business models are slightly different from VAR to VAR, cloud service providers should draw a clear image of their ideal partner. That could mean specifying location or size. It should also consider technical skills or expertise in a given market or account type.
Zetta.net, for example, is specifically signing up VARs or integrators that already have skills in backup and recovery and are seeking a cloud-delivered option, said Art Ledbetter, the company's director of channels.
"It makes it easier for them to walk into the program," he said.
On the other hand, IaaS provider Infinitely Virtual is taking a much broader approach by creating two tiers for its program, said Adam Stern, CEO of the Encinitas, Calif.-based company.
Its entry tier pays VARs for referring customers to Infinitely Virtual, which handles all provisioning and technical support. VARs must sell at least $200 in services in a given month to earn their commission, which increases with the volume of business they refer.
Infinitely Virtual set the $200 minimum to weed out companies trolling for an additional discount to use its services internally, Stern said.
The service provider's second partner tier is meant for those that want to become completely involved in selling its offerings. Under that model, Stern explained, partners buy services at a discount and set their own prices, which means they control the margins they earn.
2. Don't get between your partners and their customers.
One mistake some cloud service providers make when structuring their channel program is offering their partners the same technical support they offer individual customers. Be aware that your partners will require a much richer set of these resources, just like your internal support team.
First, they'll need a way to manage multiple accounts. That means cloud service providers should invest in developing tools that help partners maintain a view into more than one customer's infrastructure or services simultaneously.
A major focus of Zetta.net's recent channel program revamp was creating a multi-tenant portal that partners can use to provision accounts, set (or reset) configurations, monitor service levels and make other changes, Ledbetter said.
"Previously, we were treating MSPs like they were customers, but that wasn't a very good policy for helping them manage their own customers," he said.

More members of the traditional IT channel are experimenting with adding cloud services to their portfolios. But few have the technical or financial resources to do this on their own, leading more of them to seek partnerships with large cloud service providers.
Nearly 60% of the value-added resellers (VARs) and other IT solution providers that research firm PartnerPath recently surveyed described themselves as representatives of other companies' cloud offerings, including Infrastructure as a Service (IaaS), Software as a Service (SaaS), cloud-based backup and disaster recovery services and more.
Approximately 40% described themselves as a "reseller" of those applications while 20% identified with the term "sales agent."
"Delivering IT as a service has forced partners to reevaluate their business model at a really fundamental level," explained PartnerPath analysts in its recent analysis of that data, The Biggest Cloud Winners. "Cloud leaders today come from different business model roots. Some are 'built in the cloud' with a nearly pure annuity services-and-applications model, but many more have had to retool their approach to staffing, training, marketing and revenue recognition from a legacy on-premises model."
Cloud service providers will need to rethink their entire incentive structure so that company sales people aren't tempted to swoop in on [partners'] deals to make their quotas.
Those differences mean that cloud service providers must be flexible in their approach with individual VARs, systems integrators or managed service providers (MSPs), said Jaywant Rao, vice president of global alliances for cloud service provider Savvis, a subsidiary of CenturyLink based in St. Louis.
"Every partner is slightly different," he said. "They each have a different flavor of how they go to market. That means you have to focus on which models make sense for your own business and align things from there."
Given Savvis' ties to the telecommunications model, developing a partner program was almost a given. But other companies evolved into that position.
Zetta.net, a Sunnyvale, Calif.-based provider that offers enterprise-grade backup and disaster recovery services, announced its enhanced cloud partner program last September. The company made the decision to build a channel program after experiencing an explosion of interest from MSPs and VARs that lacked the ability or resources to build a similar infrastructure on their own, according to Gary Sevounts, Zetta.net's vice president of marketing.
Regardless of the original motivation, successful programs share several common elements.

Also, customers may see the value of a direct sales team that understands the manufacturing market as well as the types of problems specific to small businesses.
However, history has shown that value added resellers (VARs) are critical to penetrating the local markets with their regional touch and knowledge. See The Cha(lle)nging World of Value-added Resellers. Thus, Microsoft has opted for a hybrid subscription hosted model named Service Provider License Agreement (SPLA) program, which is a "monthly rental of ERP" in which Microsoft and its partners are increasing deployment options for customers. Namely, partner VARs and independent software vendors (ISVs) can provide Microsoft Dynamics ERP products (which will remain in a single-tenant architecture for the foreseeable future) as a service and as a monthly fee, with the on-premise switch option if necessary. Time will only tell whether this customer choice will be more important to customers than the above mentioned potential benefits of true multi-tenant SaaS deployments.
Discrete, "to order" manufacturing companies in the high-tech, electronics, capital equipment, and automotive sectors with annual revenues up to $50 million (USD), and smaller subsidiaries of larger companies, should evaluate GSInnovate as a cost-effective option for up to a few dozen users. Similar manufacturers with fifty or more users should consider, instead, the traditional on-premise glovia.com ERP system, which should have a lower total cost of ownership (TCO) for these larger organizations that require much deeper and broader functional scope. However, such companies still pondering to use SaaS for the short term because of IT resources or financial constraints might find GSInnovate a practical transitional choice before migrating the on-premise system (since Glovia grants a full credit for what they have spent on the hosting arrangement).
Glovia.com is well suited for upper mid-market companies with multiple locations and multiple business units in diverse markets. It is also suitable for organizations with versatile, discrete manufacturing styles (mixed-mode) within the automotive, capital equipment, electronics, telecommunications, and similar industries. Companies needing software to address mixed-mode manufacturing (from engineer-to-order [ETO] and complex projects through to high-volume and repetitive), projects and contracts, and service management may want to include Glovia on an initial list of vendors for a particular ERP software selection.

For the last decade, an agent model has been the easiest way vendors had to engage solution providers in cloud offerings. The shifts a cloud business model demands in marketing, sales, compensation methods and customer success are difficult for both vendors and solution providers. Thus, a simple referral or an agent model was a quick win for vendors looking to gain awareness of their cloud offerings. There isn’t enough margin available in a referral deal for the solution providers to be profitable long-term so we've seen growth in other solution provider roles in cloud models.
What are solution providers selling?
Not surprisingly, software as a service tops the list of cloud solutions the solution provider respondents* are selling. Software as a service (SaaS) remains the largest segment of the cloud market, with revenue expected to reach $73.6 billion in 2018. Gartner expects SaaS to reach $117.1 billion and 45% of total application software spending by 2021. “In many areas, SaaS has become the preferred delivery model. Now SaaS users are increasingly demanding more purpose-built offerings engineered to deliver specific business outcomes.” (Sig Nag, research director at Gartner.)
It is interesting how many solution providers indicated they are selling disaster recovery as a service and security as a service which followed closely behind the expected unified communications as a service offerings. The thought-provoking data is that more solution providers indicated they are selling disaster recovery and security as a service than the well-hyped infrastructure as a service and platform as a service. Gartner predicts the fastest-growing segment of the market is cloud system infrastructure services (infrastructure as a service or IaaS), which is forecast to be the second largest segment at $83.5 billion by 2021.
32% of solution provider respondents indicated they are selling storage as a service, which is nearly equal to the number of solution providers indicating they’re selling infrastructure as a service. It’s a little disheartening so few solution providers indicated they are selling business process as a service since it’s a growing services market which Gartner estimates will reach $58.4 billion by 2021. This is indicative of the solution provider audience we survey. They are primarily traditional partners who are now selling the technologies they’ve known and loved for decades in an as-a-service offering. They haven’t yet fully adopted pre-sales or business process consulting services, so it’s understandable they don’t claim these as part of their cloud-based offerings.

As channel partners analyze the ebb and flow of their various revenue streams, they might discover that adding something new to their portfolios could provoke a flood of new business. A hot opportunity for selling more services into one’s existing base is software as a service, to be discussed in one of this morning’s concurrent sessions.
This panel, moderated by Steve Hilton, vice president of Yankee Group’s Enterprise Research group, will analyze SaaS opportunities available to agents, see what’s in it for resellers and give tips to channel partners on how to best communicate the benefits of SaaS to the end user. Hilton, who writes the Ask Steve column for PHONE+ magazine, said attendees can expect to learn about the pitfalls and the best practices for channel partners selling both communications products and SaaS-based applications.
Panelist John Krzykowski, general manager for 19Marketplace, said SaaS is gaining momentum for a number of reasons, including the rise of multitenant applications delivered over the Web, the ease of implementation and the availability of broadband access to access applications from anywhere.
Panelist Robert Bye, executive vice president of nGenX, agreed that SaaS allows companies to get the benefits of new technologies such as collaboration and remote access without the investment in server hardware and IT resources to maintain these systems. “Agents can learn how to add incremental revenue from existing customers without having to become an expert in IT,” explained Bye. “SaaS provides a consultative sales opportunity that increases value to the customer and also decreases churn because these products are so sticky.”
Clark Easterling, vice president of marketing at Perimeter eSecurity, also joins the panel to discuss SaaS applications in the security arena. “Attendees will learn how they can bundle Security SaaS with their services and increase their close ratios, increase customer ARPU and decrease churn,” he said.
“Whether you use the services to attack your customer base or your new sales, someone will be offering them security SaaS and it might as well be you.”

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As a One Network VAR partner you will have the resources and knowledge to build expertise on One Network SaaS solutions. VARs can resell One Network applications to One Network customers as well as new customers. One Network is building ecosystems of consultants and ISVs around our industry cores to encourage specialization and tailoring of services and solutions that encapsulate the nuances of the target industry. Key industries include Automotive, Food Services, High Tech, CPG, Retail, Healthcare, Military, Logistics, and Pharma. One Network charges VARs a monthly fee per user and per business transaction for each application sold.
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Adding value to your Critical business applications
Enterprise software is an investment every organization needs to make carefully, and ensure they are getting the most out of what they’re paying for.
When it comes to your critical business technology infrastructure and applications, working with a partner that can add value to your solution is probably the fastest way to see your ROI. From assessment to implementation and support, your Value-Added Reseller is there to make every invested dollar count.
VantagePoint is a Value-Added Reseller of SAP software. This allows us to support you through the entire decision process, during, and after the implementation. Engage us to help with sizing, negotiation, business case development, and creating the final pricing structure. We also work closely with SAP to determine if any existing maintenance base can be converted to credit towards cloud software purchases.
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Choosing VantagePoint means you are working with a certified SAP Software VAR and SAP Gold Partner. It also means you are supporting your investment with our 25+ years of experience working with SAP products.
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To get started, explore our documentation of these new ways to engage with customers and grow your sales.
At least ChannelBiz boldly commented along these lines – pointing to research that proves channel critics wrong – in any case, those “who have longed for the day when resellers are cut out of the equation”.
It’s a fact that power is shifting into the customers’ hands and purchasing habits are changing due to “online-first”, while the channel ecosystem is struggling to adapt to the new cloud challenges. This may make it seem like the only way to distribute SaaS products is to sell direct.
Yet a recent Forrester research, commissioned by Avangate, contradicts this assumption: 66% of software vendors surveyed say that channel partners are of strategic importance to their SaaS revenues. The channel is here to stay, although it is and will continue to undergo major disruptions as the software industry shifts from on-premise installation to SaaS delivery and from perpetual licenses to pay-as-you-go subscriptions.
In the next Avangate webinar, on April 16th, we are attempting to answer this question: “Are Channels Any Good at Selling SaaS and Cloud Services?”, together with Peter Sheldon, Principal Analyst at Forrester Research. More than this, we’ll look at what it takes to develop and optimize your channels to increase SaaS and cloud sales. As software companies need to work harder than ever before at retaining their customers, it is critical to leverage the power of the channel to increase retention rate and reach further out in the market. Coverage of the topics below will help you get started using channels for customer acquisition and retention:
All webinar participants will receive the supporting whitepaper “As SaaS Goes Mainstream, ISVs Invest in Channel Support Tools” conducted by Forrester Consulting (and commissioned by Avangate), which reflects the importance of channel sales to SaaS.
Sign up now to learn how channels can revolutionize your SaaS revenues. Feel free to share from your experience, or ask a question for the presenters below.
Like traditional installed software vendors, software-as-a-service (SaaS) providers are often interested in selling their products through a network of affiliates. But can the affiliate model, which traditionally focused on download portals, work for SaaS companies? This article explores that question in depth.
What is SaaS?
Before we establish what SaaS affiliates actually are, and what makes them different from “traditional” affiliates, we need to understand SaaS.

In this, they forget that other vendors are almost certainly doing the same and that most channel partners are not in an exclusive relationship (quite the opposite).
In the same way that not enough businesses do meaningful research into their end customers, the same tends to apply to the channel. Taking time to talk with partners, understanding their specific businesses and challenges, will pay massive dividends over the long term.
These should all be seen as basic hygiene factors for a successful programme.
3: All partners are not created equal
A small VAR is very different from a big VAR. System integrators are different again, as are distributors. A one-size-fits-all approach will tend to be a poor fit for everyone.
You may of course already have gold/silver/bronze-style tiers for partners, each with a commitment and programme attached. If not, consider creating one.
If this is not possible, look to segment your partners the same way you (hopefully) segment your customers. Look at all the elements such as geographic focus, average deal size, vertical sector specialism, level of exclusivity etc to build up personas for your different partners.
Then, start to look at the kind of support and activity each may require.
For example, a large VAR focused on high-touch enterprise sales is likely to benefit from a more collaborative ABM-style approach or RFI support. Whereas an SME-focused operation may require more in the way of telemarketing scripts, demo materials and objection-handling guidance.
4. Not just datasheets and PowerPoint
There is, of course, a wide range of content and activity you can provide and co-create. All the usual suspects will be there from the obligatory datasheets and PowerPoint through to the event-in-a-box and other swag that is often part of these programmes.
As we’ve mentioned, every partner is different. But remember, every partner also gets this kind of material from other vendors. So what will make yours stand out (and get used)?

Contrary to popular belief, SMBs have been slow on the uptake of SaaS (application hosting outpaces SaaS adoption by SMBs by a factor of 3-4x) ...
... due to the fact that VARs, in ownership of the customer trust asset, haven’t been pushing SaaS. But the financial barriers to channel partners’ SaaS advocacy are being broken down.
Now that the path for VARs to play in the cloud is being forged, and their play along with software vendors, aggregators, and ISPs being validated, distributors and DMRs, long wedded to on-premise license models, are going to have to figure out their place in the new cloud channel order.
What do you think? Is this one of many experiments? What is the role for distributors and DMRs in cloud computing?

Both along a whole life cycle, so partners can be used in the discovery process.
Customers or prospects discover your solution.
Partners are used to evaluating your solutions – you know that old RFP is still alive and kicking.
And then along with the process of closing a deal with co-selling. Microsoft started to make wholesaling in 2010 or so. It's still in its infancy if you look at the whole IT industry over time.
So, wholesaling, and then enabling a great purchasing experience, and then a fantastic post-sales experience, where the partner will take on certain things, like the ongoing management, or maybe even the renewal.
That's one of the trends: an expanded scope of partners or the channel function.
Related to that, there's a broader variety of go-to-market models: selling with partners, selling to partners, and then they integrate your solution, and resell a package.
Related to that, a broader set of business models, i.e. simple MDF funds and market development funds. This could be commission-based, bounties, there could be revenue share and ongoing subscription models.
It could be an OEM license if you integrate it into a bigger platform, and so on.
So, a broader business model differentiation, if you will.
And the last thing where this all sort of comes together in my mind is the relationship between the vendor, and the channel and the ecosystem becomes way more bidirectional.
Balthasar Wyss: It's not just hey, put that bottom up on your website and then, at the end of the day, we'll give you a few dollars if somebody buys a book from us. It's way deeper.
For example, partners help a vendor to understand their prospective customer base, to help them get the strategy, how to deploy it, and those kinds of things.
These are sort of the few trends that I'm seeing.
The last point I want to make is this no surprise that more recently people started talking about partner ecosystems or the Chief Ecosystems Officer at a company.
Where we look more from an ecosystem perspective, holistically, as opposed to just sort of a point solution we’re engaging with.
Paul Bird: You mentioned Microsoft. I worked for a couple of Microsoft Gold Partners, pre-co-sell.
It was left to us, as the reseller, to take discovery through to closure.

This partnership is particularly helpful for tech companies who want to reduce the friction points between their customers and their products. Having a service delivery partner can make implementing their products easier and increase product use and adoption post purchase.
High Velocity Partners
If you’re attempting to scale your business and its sales, then you’ll likely need a high velocity partner. These are often referred to as fulfillment partners because their goal is to help you fill orders quickly and efficiently. This type of partnership doesn’t offer any added value to your customers, but it does speed up how quickly you can fulfill large numbers of orders and reduce your internal administrative costs.
This option is great for companies who are trying to rapidly scale their business and increase sales numbers. It’s usually used for products that are easy to set up or install, which is why customers will still opt in even without value added services.
As an added bonus, your high velocity partner might even be able to push your product into previously untapped or hard-to-reach markets through existing contracts. This means you not only can sell more products, but you can also sell to more people.
Channel partnerships are a great way to maximize the value and earnings from your products by using a network of other businesses ot help you sell and help customers. Keep in mind there are many types of partnerships and choosing the best fit for your needs is key to success.

This lets you and your partners get down to the nitty-gritty and cuts out all the room for extra error that comes with extra work.
Establishing, sustaining, and maintaining the complex channel relationships critical to success in SaaS can’t rely on simple phone calls or emails—they require real-time collaboration. At each stage of the game, all of the players need to be talking to each other in real time: brainstorming ways to meet everyone’s needs and maximize value. Tools that can take you beyond the partner portal allow for anytime/anywhere communication that’s logged and tracked so that there’s never any risk of crossed wires.
Training and Content Delivery
For your partners to adequately be able to position your product, sell the newest features, and know what the product is really capable of down to the minute, they need training. And not just any training—they need information that’s presented in a way that will stick with them and that they can conveniently access at any time.
Active, Intelligent, and Accelerated
Selling your SaaS solution through the channel offers an unprecedented opportunity to generate revenue and create value for you, your partners, and your clients. But going in with old tools is like trying to work on a dial-up modem: It might be theoretically possible, but you’re needlessly handicapping yourself from the outset. Go beyond the outdated partner portal with a cutting-edge sales acceleration solution that maximizes ROI.

Indeed service providers may remain numerous, given the nature of discrete domain expertize that often characterizes their business models, unless a selection of professional services aligned to competencies of resellers are also migrated.
A sourcing or procurement organization that chooses to acquire products and solutions from a range of distinct services providers may make limited progress in consolidation. The business benefit of those specialists however may be considered more than worthy of managing additional relationships.
Consolidation may best be achieved by categorizing and identifying requirement types that logically fit together and the synergy with domain providers. A primary software and cloud services reseller for example, plus a primary networking and security reseller, plus a primary hardware reseller … or the same organization may be used for all three if complete consolidation is sought.
As for the term VAR …
It’s become an unproductive and unnecessary TLA, whereby it’s used to collectively describe resellers and service and solution providers. When analyzing the supply chain and portfolio of partners and providers, it’s far more appropriate to distinguish what type of supplier your organization chooses to deal with for given requirements.
Which products, solutions and potentially professional services would you choose to acquire from a reseller?,
Which professional services and potentially products or solutions might you acquire from a services and solution provider?
Feel free to use the term VAR to describe the video football ref, please don’t use it to describe your reseller or service providers.
Footnote – this blog was partially inspired by Hank Barnes series of posts which commenced with Things I’d Like to See Go Away – The Logo Slide
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Adding Value through Reseller/ISV PartnershipsBy Jessica Davis | Print
Re-Imagining Linux Platforms to Meet the Needs of Cloud Service Providers
Looking for a way to pump up margins? Partnering with an ISV may be the answer. Solution providers who team up with ISVs find they add more value for end-customers -- value that end customers will pay for.
In an age of squeezed margins for IT hardware sales, everybody is
looking for higher-margin value they can add to the deal, whether its
integration, services or even software as a service.
And one road that some VARs are traveling down to boost margins is partnerships with ISVs (independent software vendors). It’s value that resonates with end users who are increasingly looking for complete solutions rather than single components of overall solutions.
"Customers we deal with are frustrated at the lack of cooperation between hardware and software vendors," says John Cannington, CEO, of @hand Corp., a company that provides enterprise applications for handheld devices in primarily industrial and energy industries.
Cannington served as one of the panelists talking about collaboration between VARs and ISVs and how such partnerships can pay off for both parties. The panel discussion was offered at the VSR Business Optimization Summit in Philadelphia this week.
"We are educating our sales force on the various types of our hardware our software gets deployed on," says Cannington, who previously worked at companies such as J.D. Edwards. "I’ve long avoided being in the hardware business, but I want to actively partner in it."
And that partnership is likely to help the VAR as well, he points out, saying that his biggest customer just bought 5,000 handheld hardware devices.
That’s a message that has resonated with Jeff Weidler, president of WineWare Software Corp. as well. Weidler’s company provides software for the tasting rooms of vineyards so that they can sell and ship wine to visitors’ homes. But without a hardware component, the solution was incomplete.
"Our missing solution was POS," he says, and his company partners with pcAmerica to provide that element. David Gosman, CEO of pcAmerica also sat on the panel, and says that customers are more likely to go with companies who partner because they don’t want to shop around to several places to find hardware and software that works together.
As always, when partnering with a software vendor, solution providers are likely to be cognizant of the potential for channel conflict.

Savvis offers its high-level partners access to the same high-level technical resources that its internal support team uses.
"They have full access to their customers," Rao said.
3. Ensure your sales team works with channel partners.
One of the most difficult parts of the transition from a direct sales model to one that includes channel partners is putting policies in place to ensure internal sales teams work in collaboration with VARs and systems integrators, rather than treating them as competitors.
That means cloud service providers will need to rethink their entire incentive structure so that company sales people aren't tempted to swoop in on deals to make their quotas.
At the very least, internal sales employees should be rewarded in a "channel-neutral" way. That is, they should get credit for deals they help partners develop in their coverage area. If you want to develop your company's channel business more quickly, you can reward the direct sales team with something extra for working with partners, a model often described as "channel-positive."
Either way, changes need to start at the top with ensuring senior level management has bought into the overall channel strategy, Ledbetter said. "You really need to design a program that rewards your direct sales team to work with partners, not against them," he said.
4. Make sure required investments are worth the effort.
Historically speaking, IT solution providers are leery if channel programs require massive upfront investments. That means any cloud service provider's program should offer cost-effective resources for training, customer support, and sales and marketing initiatives. These sorts of resources should not be treated as a profit center.
More on cloud partner programs
Cloud channel programs finally reach maturity, survey says
Still, partners are still wary of channel opportunities in cloud
Xerox's priority for 2013: Build a stronger cloud channel program
At the same time, though, your company's closest partners will want to be rewarded for taking extra steps to offer distinct, expert solutions based on your cloud services.
More often than not, the program will need multiple tiers along with multiple levels of incentives. Aside from the structures described above, another example is the Premier Consulting Partner program created by Amazon Web Services (AWS).
As of February 2013, just 15 VARs and IT consulting companies held the distinction of membership in the program. In exchange for building their services on top of AWS's IaaS environment, Elastic Compute Cloud, these partners get extra attention and additional money-making opportunities.

These days, software as a service (SaaS) isn’t a far-out techie concept the way it may have seemed just a few years ago. It’s a broadly accepted, widely adopted paradigm for software deployment and management in businesses of all sizes. In a surprisingly short period of time, it has changed the way people work, and it’s also changed the way people sell. The old days of moving boxes of software has given way to today’s subscription-based, cloud-deployed solutions. As the market has changed, so have the needs of the channel partners that position, sell, and implement SaaS products.
Back in business computing’s past, alongside install CDs and various iterations of the floppy disk, is the partner portal. Those pieces of rudimentary communication software kept vendors just in touch enough with their partners to make sure product was moving. They were necessary, and they did their job. But these days, the job is infinitely more nuanced, and a portal is not nearly enough to get the job done. To best support your partners, you need to think beyond the traditional partner portal. Let’s explore exactly what that consists of and how you can use it to manage the entire partner lifecycle and close more deals.
The New Demands of SaaS
Maintaining healthy relationships has always been critical to channel partnering, but when selling subscription-based solutions, quality, streamlined communication is even more important. Your partners need to establish deeply rooted relationships that keep clients subscribed and seeking out more of your services, and they need more from you to do it successfully. Here’s what your partners are expecting in a modern portal:
When it comes to getting SaaS tools implemented and opening up those recurring revenue streams, things can become complicated. And the bigger you scale a channel program, the more partners—and individuals within those partner companies—it involves. In days gone by, partner portals were fine for keeping track of a few aspects of a channel program, but simple portals required that everyone involved needed to do a lot of manual work outside the portal—typically swapping information via iteration after iteration of spreadsheet..
With SaaS solutions, this is a recipe for disaster: There’s simply too much going on in a single partner relationship (let alone a partner program with tens or hundreds of partners) for anyone to keep track of manually. Partner acceleration software takes you beyond the portal by automating “busywork” tasks.

What's the buyer journey? In the enterprise space, it's completely different than in the mid-market, or at the lower end.
I'll get back to that in a second, but that's just one of the segments.
The other way you can go is obviously geographically.
How do you expand?
Let's say you start your company in Canada, where you are based. How do you expand?
Do you build a beachhead with partners and then validate your model? Or do you go into Asia and Europe and other parts of the world as in geo-segmentation? It is very helpful. But how do you tackle that?
And then the third thing that comes to mind is segmenting by partner type.
What kind of partners do you fundamentally need to be successful?
Is it more, on the technology side you need to integrate with a lot of different systems? For example, Avalara, later expanded into the accounting space. And I happened to lead that team at the end of my tenure there because accountants do tax compliance for businesses.
So, what kind of partner types do you need, whether on the technology side or more, on the sales and marketing side is another sort of segmentation that I think you want to go through.
I think it's important that you understand the environment that you're operating in. By that, I mean, where your customers ultimately are.
So how you go about this?
The company I work for right now, for example, we are purely U.S. based. We don't have any partners really outside of Europe.
We're getting there for some data. Partners that provide this data are useful.
So we focused on U.S. market and built that up. But that's not true for many other companies, because they are global in nature.
Paul Bird: Absolutely.
And in my background managing channel, we basically did our channel management locally in Canada and the U.S.
And then we used value-added distributors (VARs) globally, so we could spread our footprint.
And that was a model that really worked for our software platform.
To be able to have that kind of regional representation and give people the ability to get localized support and things like that.
So I guess that was kind of an early ecosystem 20-plus years ago.
Balthasar Wyss: Yeah.
What I always recommend people do, is sort of build a channel, or a partner ecosystem map. Really map it out.

Cannington freely admits that his company has both direct sales and channel sales. Bigger customers like to buy direct from the company and integrate solutions themselves while mid-market customers prefer the kind of one-stop-shopping that solution providers can offer.
Cannington recommends that solution providers ask ISVs how they pay their own sales reps and how they pay their partners and how they go to market.
"There will be strategic partners," he says, noting that some companies just make better partners for each other in the long term, while other deals may be one-off deals.
How can VARs find the right ISVs as potential partners? Mark Brown, vice president of marketing at Lowry Computer Products, a solution provider, says that he relies on distributor BlueStar to act as a matchmaker.
Cannington recommends VARs decide what business they want to be in and then ask customers who they are working with. Another strategy is to do a Google search, he says, because the most savvy ISVs will make sure they have good Google listings.

But the partner puts together the overall solution and is often the face to the customer and the one-throat-to-choke if there are issues. It's unlikely the solution providers will readily hand over customer relationship management though they will need to step up their customer lifecycle policies, processes and people.
The referral or agent model has decreased in importance for vendors, falling from fourth to sixth priority in the last four years. And although most of the solution providers still engage with a few vendors as referral partners, they rank that activity near the bottom of what produces gross margin though it’s still above traditional software and hardware. They’d prefer to take the referral fees which require low sales and support investments rather than slog through the traditional resale process which can include arduous amounts of training, certification and support requirements.
*This blog is an excerpt from the PartnerPath 2019 State of Partnering report: Driving Cloud Adoption using data gathered from 100+ vendors and 200+ partners in our annual State of Partnering study. More excerpts will be published in coming months. Be sure to subscribe to our blog below!

Recently, I found myself having similar conversations about how to manage channel partners with several customers from very different industries. The customers were in retail, technology, and hospitality respectively, but they each had similarities in the way they dealt with these partner relationships. The differences in their channel partner strategies were not due to their industries but rather were influenced by the stage of their business was at, or very specific market factors.
Despite their differences, there was one overriding principle to how they approached their channel partnerships; it’s a strategic investment for their business. While their reasoning may differ, this didn’t detract from the importance of these relationships to their sales efforts and bottom line. For example, FMCG producer Dabur Asia explained how channel partners were a critical player linking their retailers and customers. At the other spectrum, enterprise cloud platform producer Nutanix utilizes these arrangements to help them unlock doors in new geographies quickly.
Common threads also appeared in terms of their sales model and their enablement strategy, so much so, that I identified three broad channel partner strategies. Before I launch into these, it’s helpful to outline what I mean when talking about channel partnerships.
A channel partner specializes in various aspects of the sales process and undertakes this as a service on behalf of a business. Nutanix uses channel partners to help them scale quickly by undertaking just lead generation in some geographies, while they use their own sales engineer to conduct demos. But in new locations where they have no sales team, the channel partners help them expand with minimal investment, by managing their entire sales process right through to closing. They also have premium partners who are able to unlock doors which they cannot directly.
Based on these recent customer discussions the three channel partner strategies I’ve identified are: Exclusive, Targeted and Global.
1. Exclusive channel partnership strategy
Best for when you have a point solution.
A friend of mine has a software startup that sells email encryption software to large enterprises. As large companies tend to purchase their product as part of a broader email security solution, their only go-to-market strategy is to use channel partners who have expert knowledge. They bundle several point offerings as part of an overall solution for the larger business problem. Businesses in this position prefer aligning themselves with channel partners who are SMEs in their field, who they can provide with exclusive access to their solution.
The key challenges in an exclusive channel partnership are to engage your channel partner reps.

Yesterday I attended Computacenter’s Analyst Event. It’s a major independent provider of IT infrastructure services in Europe, ranging from reselling hardware and software to managing data centers and providing outsourced desktop management. My main interest was how it manages the potential conflict between properly advising the client and maximizing revenue from selling software. For instance, clients often ask me if it's dangerous to employ their value-added reseller (VAR) to advise them on license management in case the reseller tips off its vendors about a potential source of licence revenue.
An excellent customer case study at the event provided another example. A UK water company engaged Computacenter to implement a new desktop strategy involving 90% fully virtualized thin clients. Such a project creates major licensing challenges on both the desktop and server sides, because the software companies haven’t enhanced their models to properly cope with this scenario. The VAR’s dilemma is whether to design a solution that will be cheapest for the customer or one that will be most lucrative for itself.
As we said in our recent report “Refresher Course: Hiring VARs,” sourcing managers should decide whether they want their VARs to provide design and integration services like these or merely process orders at a minimum margin.
Computacenter will do either, but they clearly want to do more of the VA part and less (proportionately) of the R. So, according to their executives, they have no hesitation doing what is best for the customer even if it reduces their commission in the short term. But they didn’t think many of their competitors would take the same view.

Local VARs Do Best
with SMBs"> Close connection Its the local and specialized VARs that are closest to SMB customers and thus have a handle on the kinds of specific applications they need to run their businesses, industry experts said."The cost of building out a service infrastructure is huge," Driscoll said. "We can leverage the expertise that already exists and partner with what we call benchmark delivery partners on both a regional and national level to fulfill opportunities." For their part, ServiceConnection partners get a built-in sales channel to drum up leads. ServiceConnection also promises its partners a level of commitment. "Less is more," Driscoll said. "We have a fairly monogamous relationshipwere not going to sign up 10 partners in their area so theyre exposed." Instead, Driscoll said, ServiceConnection is handpicking between 30 and 40 tier-one players in major markets and with specific expertise. SAP has embraced some of those same principles in its PartnerEdge Channel Partner Program announced in May. SAP officials said they place a high value on partners with micro-vertical expertise, as well as those with a track record of long-term customer satisfaction and retention. As a result, the PartnerEdge program recognizes and rewards partners for sales transactions (how much SAP software is sold) as well as for capability-building activities such as training and customer satisfaction. "By placing a value and measuring the capability and skill set of the partners, SAP and prospects can have the confidence that their partner can manage an SAP solution in a way that delivers timely business results to the company," said Michael Sotnik, SAPs senior vice president of channel and SMB in North America, who is based in Newtown Square, Pa. Its the micro-vertical expertise that is the partners most compelling asset, according to Brad Nicolaisen, president of Et Alia LLC ("et alia" is Latin for "and others"), a Milwaukee-based SAP business partner. His company markets Crew, a professional services application aimed at construction and project-based assembly SMB customers. SAP, as a large organization, has to keep a broad focus, Nicolaisen said. The company may have best practices for professional service providers, for example, but partners such as Et Alia can go one step further and prepackage best practices specific to businesses doing such things as project-based assembly and fabrication. "All we do are these industries," Nicolaisen said. "We eat where they eat.

Channel partnerships are a huge segment of both the B2B and B2C market. It’s how vendors and manufacturers distribute their products to customers when they don’t have their own sales operations.
As a manufacturer, you might use exactly this model in your business. There are lots of pros (and only a few cons) to this structure if you use the right type of partnership to support your business. In this blog, we’ll go through the pros and cons of using a channel partnership, as well as a few different ways to set up your partnership.
Pros and Cons
There are some obvious benefits to using channel sales in your business. For example, you reduce your overhead costs by not needing a storefront. Plus you have lower customer acquisition costs, can broaden your geographical stake, strengthen brand credibility and have time to focus on your end of the business.
There are some trade-offs to secure these pros, though. With a channel partnership, you’ll have to give up some control of the sales process when you hand over your product. There’s also more risk for your brand reputation if a partner doesn’t reflect your core values or gets into trouble. Lastly, it’s much more difficult to get direct feedback from your customers, which makes developing new products and fixing issues tough.
Overall, if you’re not willing to run the sales side of your business, then channel partnerships are likely a good choice. Just be aware of who you’re bringing into your brand and the type of partnership you choose.
Value Added Resellers (VARs)
This is the most popular type of channel partnership. In this set up, a reseller will buy your product, adjust for their profit margins, and add extra value services through their business. It’s an excellent way to not only move your product, but also build on your brand reputation through trusted resellers.
Using VARs can significantly boost your sales numbers and help you reach a broader market than you would on your own. It’s a good choice for businesses who are releasing new technology, want to break into a specific geographic region or simply don’t have the capital to expand their operations on their own.
Service Delivery Partners
These partners aren’t reselling your products, but they do offer additional services to your customers. Most of their services are customized to the potential customer’s needs, such as consulting before purchase, installing the product or technology and managing it throughout the life cycle.

Companies such as Dropbox, Moazy and Google Apps enjoyed great opportunities from cloud based services in 2010....
In 2011, it seems we will see greater adoption and opportunities in the channel in the cloud space. Most value added resellers (VARs) understand that they’re in competition with the many cloud computing providers that market and sell directly to customers. Your potential customers will be encouraged by the cloud providers seeking a quick sale to “cut out the middle man.” So where are the business opportunities for VARs?
There are three specific tactics VARs should take when trying to gain margin from the cloud: Identify appropriate channels understand the cloud market place (both real and perceived) and watch competitors’ movement in the cloud space.
Choosing appropriate channels
Although this may seem obvious, I watched many VARs miss cloud opportunities last year for not having appropriate distribution channels and business relationships in place for them to resell cloud products or services.
In two specific examples, VARs focused on hardware and software sales instead of taking advantage of product and migration services.
In both cases, the customers had just moved their email to Google Apps because mailbox volume hardware maintenance made email cumbersome and expensive The customer not only bought the services from Google, they also purchased several months of professional services. These professional services brought in twice as much revenue as the hardware support would have. These services included assisting with putting a retention policy in place to delete old email and migrating the remaining email to Google.
Although I’m not saying the vendor should have been a Google Apps partner (which is becoming an attractive option for some VARs), but they should have had some cloud or traditional hosting available to meet the customer’s desire to not host their own email.
By having this channel in place prior to a customer request for the service, you’re acknowledging the market to your potential customers. Most customers will understand that you‘re still adjusting and adapting to the market, but just showing that you have a grasp on the tech trends will assure the customer that you can help them. Of course, you also bring safety and experience with existing platforms, so that should the cloud technology not work, you can quickly provide other options.
If you need assistance in defining your market and products with supply channels, candid conversations with existing customers can help quite a bit. Make this a listening session and not a sales pitch. If you start pitching your solutions under the guise of developing your channels, then your future requests to talk business development will land on deaf ears.

This is still goes on today using .NET applications, ActiveX controls and Flash. It isn’t transformational or a paradigm shift in thinking, it just requires thinking through the design and aligning it with the business objectives.
A survey by Gartner Inc found that, among users and prospects of SaaS solutions in 333 enterprises in the US and the UK, the apparent acceptance of SaaS as a viable model has not entirely translated into satisfied users of SaaS. Vendors of these on demand solutions will point out that a large percentage of respondents will maintain their current levels. The Hybrid SaaS model provides various choices, from a full installation, through to a plug and play hardware appliance. These solutions sit within the enterprise and allow more seamless integration and scalability within your environment. This model is suited to larger enterprises, with a large number of technicians and end users, typically with multiple points of integration that require sub-second response times.

A onesize fitsall solution for an enterprise Ecommerce solution
by philippe bodart
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Today enterprises have different models to choose from when it comes to implementing e-commerce solutions. The choices vary from a buy model, a build model, a hosted build model or an SaaS model, better know as a software service model. For small to medium sized organizations, and for non-profit organizations the choices are quite often more limited to either an open source hosted model or an fits-all SaaS solution.
I will elaborate on each of these models and develop their pros and cons, and also develop the levels of skills you need within the enterprise to implement these delivery models.
When you are evaluating models and vendors within the different models, it is important to first have a solid look at your requirements, your budget, the level of risk you want to take and also your IT skills altogether.
It is also in a first instance more important to evaluate what model is best suited for your enterprise or organization, and then choose a suitable vendor within this model, and surely not the way around.
I will cover 4 delivery models and elaborate on their pros and cons:
The first delivery model is the buy model, whereas the customer is actually buying an e-commerce software and buying the licensed software that goes with it.
A licensed software is usually Feature-rich, is robust and well tested and has some pre built integration tools available. There is a continuous investment done by the vendor on new features and enhancements, although they might come at a steep additional cost to the purchase price.
Your time to market will be relatively slow, but faster then the build model, which will be discussed later. Most likely there will be sufficient system integrators and developers available to help you with all integrations with needed with internal systems.
On the negative site of the buying model, you have:
the difficulty of choosing the right product for your requirements.

By Adam Atlas
Attorney at Law
These days, an ISO without VARs/ISVs isn't an ISO. That's an exaggeration, but today's savvy ISOs are negotiating agent relationships with value added resellers (VARs) or independent software vendors (ISVs). In this article, I'll highlight some of the legal issues around these relationships, which are becoming central to the ISO business.
So what is a VAR or ISV anyway? There is no official industry definition of these terms, but in plain language, VARs and ISVs already sell something to merchants who might have merchant accounts with ISOs.
As an example, consider a dentist practice management software-as-a-service (SaaS) provider that has a portfolio of a few hundred dental clinics. Through its SaaS, this ISV helps dentists maintain client records, set appointments, communicate with patients and create invoices. This ISV may see value in adding payments to its own offerings or at least in integrating to the payment services of a given processor or ISO.
Once that integration is technically possible, the ISV can easily solicit its dentists to offer them payments with the unparalleled convenience of the payment services working hand-in-glove (pun intended) with the SaaS dentist platform. From the point of view of the ISO, this ISV adds value to the resale of merchant services, and they are therefore a value-added reseller (VAR).
It's best not to get hung up on jargon, because it often changes, and different people will understand jargon to have different meanings. It's perhaps best to understand the roles of the various parties and use acronyms that they like to use for themselves.
Two factors drive ISVs and VARs to also want to sell processing: profit and competition.
The profit incentive is straightforward, as payment processing gives them a chance to participate in an entirely new revenue stream that is separate from their original business objectives. The ISV/VAR looks at their merchant customers the way others do: as sources of revenue with an associated cost of acquisition.
Adding payments to an existing portfolio has a relatively low cost of acquisition for both the ISV/VAR and the processor behind it. In fact, in the contemporary landscape it probably costs more—from the supply side and also the merchant's purchasing side—to procure payments in a way that is not integrated with the merchant's core operating platform.
Competition as a motivator is more complex.

SaaS products that must integrate into the Enterprise will require services for integration into those products. Finally, for SaaS products that are not fully configurable, or for very complex operations, some customization may be required in modules that interface to SaaS products.
SaaS sales models vary widely, but all are more internet focused. Freemium models are common for low cost products which can provide a base level of functionality at no cost, ideally paid for by advertising revenue. The intent is to provide sufficient value to “up-sell” to the paid version, typically costing $10 or less per month. These SaaS products are sold by “no-touch” internet sales and marketing. Products that are somewhat higher priced rely on internet marketing supported sales with the potential for online chat. Enterprise SaaS products are sold directly or through a channel, due to their complexity and likely services component. These Enterprise SaaS products are heavily supported by internet marketing which helps educate the customer and reduce the direct sales costs.
Strategies vary greatly depending on the horizontal or vertical market served. Different markets have differing propensities to move to SaaS and different competitive landscapes. Generally SMB markets have a greater demand for SaaS with the desire to reduce in-house IT complexity, a reduced need for customization, and reduced integration requirements. Certain vertical markets such as medical and financial have greater security, up-time, and compliance requirements which may increase the time to move to a SaaS solution. Consumers are now very comfortable with “applications in the cloud”, and do not have a “switching cost” from current applications. Consumer markets are most cost conscious and can be highly competitive. Cloud Strategies will work with you in whatever market you focus on.
Who We Work for
Venture Capitalists and Private Equity Firms
Providing assessments and due diligence reports to evaluate the company’s SaaS business strategy, or to scope the opportunities and risks to transforming a software business to a higher value SaaS model.
Providing independent assessments to explore the opportunity for the company to move to a SaaS model, or assist in the implementation of a SaaS model.
Providing expert SaaS resources to facilitate the financing, building, and running of a successful SaaS businesses. We work with company management to develop and build a successful new SaaS company or transform an existing software company to successfully support a SaaS model.

Google App Engine, RightScale, and Microsoft Azure are good examples of PaaS vendors, and besides Google's stable of apps, Salesforce.com is a classic example of SaaS in action.
For most of these vendors, the flexibility and choices of what they can work with to deliver an end-to-end solution mean that they can usually tailor a deployment to meet customer requirements. The customer wants a hybrid cloud running a CRM software? How about AWS, managed by RightScale, all running Saleforce? Or some other combo that makes sense technically and fiscally.
But there are some vendors that see the best approach to the cloud is to own the entire stack, so they can deliver and manage the whole thing for customers. The appeal is understandable: by not partnering with anyone (except perhaps SaaS partners, because the huge diversity of SaaS offerings prevents any one vendor from having them all), a vendor can avoid changes in licensing and business arrangements, and -- let's face it -- keep all the revenue for themselves.

CRN’s VARBusiness ran a nice story on SaaS the other day.
… Software-as-a-service applications from Google, Yahoo, and Salesforce.com are driving change in architecture, appearance and business model of enterprise applications, turning the sector from a niche into a multi-billion dollar market. But the business model isn’t without its challenges.
Calling the trend a "disruptive phenomenon," Merrill Lynch & Co. analyst Kash Rangan said in a report released Friday that upstarts, such as Salesforce.com, WebEx, RightNow, Taleo, Blackboard and NetSuite, will benefit most, compared with traditional software players Microsoft, SAP and Oracle attempting to move into the space.
Part of the disruption will come from the method in which traditional software companies recognize revenue from SaaS sales, according to AMR Research Inc. senior vice president Jim Shepherd. "If SAP sells a system today for $1 million, they recognize the million dollars on the day they sell it and it goes into the revenue for that quarter," he said. "If they were to sell that same system as a software as a service, they may get $20,000 per month for the next 10 years."
The same dollar amount is spent on applications, but logged in accounting books differently under the SaaS business model. Assuming there’s a strong demand for these services, it could have a negative short-term impact on license revenue at traditional software vendors, Shepherd said.
That’s part of the reason Microsoft, Oracle and SAP didn’t rush into offering these services offerings, which companies like Intuit Inc. have been offering for years ….
Although in general the author is right by stating that “pureplay SaaS vendors” may seem more flexible with regards to their business model when it comes to SaaS, I don’t think the article fully takes Microsoft’s efforts in this field into account.
For one WebEx is mentioned as a company that benefits most. As you may know Microsoft acquired PlaceWare a few years ago and turned this service into Microsoft LiveMeeting; one of the most successful Web conferencing services offered today (here and here).
Next to Services in Office System, also Windows Live is introduced and Microsoft officially launched its first service earlier this week : Windows Live Messenger which in the first 36 hours after the launch had over 2,4 million downloads; hmmm that’s quite successful isn’t it.
Currently there a huge list of Windows Live Services in Beta and planned.

Their marketplace has generated over $250M since the launch in 2012. It’s a triple win for Atlassian because developers are making money building add-on’s to their products while reducing R&D costs for them ultimately making their products more compelling to the users.
While their competitor Box has taken a traditional B2B approach to growth with Enterprise/Inside sales, Dropbox was able to get 500K+ developers to integrate to their platform. Both companies are successful in their own way but proves that integrations can bring serious $$.
What an ideal partner strategy looks like – Okta
Their partner ecosystem shows the evolution of a traditional partner strategy being focused solely on resellers to a modern mix of cloud alliances, ISV’s, SI’s, and resellers(for large accounts).
Want to trade notes on partnerships/channel or want feedback to grow your SaaS partner strategy? Ping me here.

Software vendors choose one of the following delivery models or a combination of both:
- Hosting on its own servers, databases, networks and IT resources
- With public cloud service providers, who manages the cloud environment on which the SaaS solution is hosted
SaaS applications are typically accessed through web browsers. Therefore, companies do not have to deal with the configuration or maintenance of the software themselves. You only pay for a subscription and that gives you access to the application.
If updates or new functions are developed for the application, these are generally made available to all customers. The majority of SaaS applications are off-the-shelf, plug-and-play products, where the vendor manages everything behind the application, including:
- Hardware components such as networks, storage and servers in the data center
- Platforms such as virtualization, operating system, and middleware (application independent programs that mediate between applications)
- Software requirements such as runtimes (how long a program runs), data, and the application itself
Other applications can also be integrated with SaaS software through application programming interfaces (APIs). For example, you can link your CRM software and your ERP software to use the synergies between the applications.
Characteristics of SaaS services
- Shared cloud architecture (or multi-tenant cloud architecture): all users use a centrally managed infrastructure.
- Access from any device connected to the Internet: Data and information can be accessed from anywhere in real time, making synchronization easy.
- Great usability via familiar web interfaces: Application user interfaces are often structured similarly to websites. Since the user already knows the structure, this accelerates the acceptance of the software in the company.
- Collaborative features: By centrally storing the data and features that enable collaboration, collaboration can be designed efficiently across teams or sites.
SaaS offers your business a number of key benefits.
Low investment risk
Since there are no costs for hardware and infrastructure when introducing SaaS applications, the investment is lower than for an on-premises solution. Studies show that the investment costs are even 30% lower in comparison – regardless of the number of users.
SaaS providers attach great importance to the fact that their software is always available and therefore rely on redundant systems. This means that comparable systems are available in parallel at least twice.
This ensures that data, systems, networks, etc. remain available even in the event of an error and that errors can be corrected without failure.

Usually, the service provider or vendor leaves a slight scope of customization or configuration of apps according to the user. As the apps or software expect to use as deploy. However, in the case of specific needs, a customer can ask the vendor to make updates and changes accordingly.
QlikView does not offer any direct service as SaaS. There are some QlikView-based applications which are available as SaaS by a few QlikView partners. As per the SaaS model, a single application type develops and distribute among the customers. This model does not fit the QlikView user purpose as customers want to have apps, in which they can use their data for analysis. Due to this, other cloud computing services than SaaS works well in the case of QlikView.
Some partner service providers of QlikView provide apps as SaaS (QlikView based). Which are either domain-specific or industry specific such as workforce management, channel management, market research, etc. For example, some such solutions are; IFR Monitoring, CONTEXT, InContact, Kenexa, SynerTrade, etc.
Thus, this concludes our explanation of QlikView on cloud and SaaS. We hope this information was sufficient to establish a fundamental of both the concept and their relationship. You may also like to know about Different types of QlikView Certification and Exam details.

Even though a VAR will sell your product and probably market it, the SaaS company still plays the biggest role and will reap great benefits from marketing efforts to create demand for their products.
Engage Buyers in the Software Evaluation Process
For these SaaS companies that need to promote a new product or stand out from the competition, inbound marketing can help engage buyers at every level of the buyer journey by delivering information that relates to their research. When the buyer is at the evaluation stage of the journey, you can help customers realize that your software is the answer to their problems and that it is the best choice on the market by publishing content that answers the questions and concerns they may have. For instance, when the buyer is going through the software evaluation process, you could publish a software buyer guide that informs the buyer of the pros and cons of similar software products on the market.
Just as we take stock of what we want and need when buying a car, and then research each vehicle before heading to the car dealers, buyers will conduct over 60% of their research online before contacting a seller. According to TechTarget 65% of IT buyers will consume at least four pieces of content before contacting the vendor, and the 2014 B2B Buyer Behavior Survey from Demand Gen states that over 61% of buyers will choose the vendor that supplied relevant information at each stage of their journey.
It’s all about building trust in your product and company. Therefore, it makes sense to invest on inbound marketing content that provides the research material your customers are searching for.
Marketing software can help you manage your inbound marketing strategy.
Marketing software can help you plan your content, meet deadlines and coordinate your team to develop content that is specific to buyers at each stage of the funnel.
The software will also help track engagement and the progression of buyers through the funnel, which helps you create and repurpose content and send the information to the buyer just when they need it most.
Selecting a channel partner to work with can be hugely valuable in amplifying your message and increasing your reach. Many SaaS startups recognise the advantage in partnering with larger companies that have a more established brand name, a broader network, and a larger sales and marketing team.
SaaS and the Value Added Reseller Channel
SaaS companies that choose the VAR channel can offer customers the added assurance of a one-stop shop of customized software and ongoing support. On top of IT services, the VAR channel may also offer customers professional services such as consulting, design and training.

Software as a service (SaaS) is a “software delivery method that provides access to software and its functions remotely as a web-based service.” Consequently, SaaS affiliates must promote a service, rather than a physical or digital product or software license.
Usually delivered as a subscription on a cloud-based web (and/or mobile) application, SaaS represents a shift from traditional software licenses and products that must be downloaded and installed, than accessed from anywhere using the web. This change in delivery mode can affect the sales model as well.
Does SaaS emphasize the service offered or the software delivery method?
Let’s use the example of PadiAct, a SaaS-based email subscription optimization tool, to answer this question. With the SaaS model, PadiAct users enjoy full access to their email services immediately after registering an account and choosing a pricing plan. No download or installation is required.
What SaaS affiliates are promoting and marketing to the end customer in the case of PadiAct is the attractive service provided by the merchant—that is, the email lead optimization tool for websites—rather than the (less important) fact that is offered via web-based software. In short, SaaS sales emphasize the unique service, not the delivery method.
Who are the SaaS vendors and SaaS affiliates?
In order to answer this question, we need to look closely at the SaaS merchants that want to grow their business using affiliate marketing.
As previously mentioned, a SaaS vendor is any merchant that offers access to a remotely hosted software application that lets end users access a value-added service. Because SaaS primarily changes the delivery model, not the need to sell software, many SaaS vendors still want to use affiliates to expand their business.
Thus the question becomes: which of today’s proven affiliate models are most likely to convert from the current model to the SaaS model?
Taking the example of the B2C shareware software world, we can confirm that traditional affiliate selling points centered on download portals, once the favorite channel for any software company interested in starting the mass distribution of their product.
How can the download portal be adapted to SaaS?
At a first glance, we might think that the portal model will not work for promoting SaaS products, mainly because the download portals are built around the idea of promoting software products designed for specific purposes—such as security software, video editing software, or PC optimizing software—instead of promoting services.
However, the shift to SaaS-friendly “download” portals is already happening.

Report Outlines SMB SaaS Strategies for Vendors
- By Herb Torrens
- August 22, 2008
Software as a service (SaaS) for the small to medium-size business (SMB) market has opened potential opportunities for vendors, and a report released last week by Forrester Research offers some advice for gaining entry.
The report, "Forrester's SaaS Maturity Model," describes a six-step approach to help service providers and independent software vendors (ISVs) assess their SaaS business goals and technical means of achieving a successful SaaS business.
SaaS is going global. Forrester says that North America has the highest adoption rates, the Pacific Rim has the most pilot projects and the European business community has shown significant interest in SaaS. The most notable success for SaaS has been in providing customer relationship management apps to SMBs, such as those provided by Salesforce.com. However, other hosted apps may gain momentum.
Forrester's SaaS Maturity Model describes levels of sophistication of hosted services. It provides tips for making business and technical assessments, with basic questions such as "Who does what for whom?" and "What is the approach for customizing processes, data and user interfaces?"
The maturation range of the Forrester model is from 0 to 5, with 0 being a simple outsourcing of an application by a single enterprise customer. A level 0 operation is not considered to be a true SaaS implementation, according to Forrester's definition. Level 5, at the top, relates to dynamic service applications with a "build for change" approach to application development. By contrast, Forrester puts Salesforce.com's initial CRM operation at level 3.
The SaaS Maturity Model aims to match the technical foundations of the service provider or ISV with its business goals. The report warns that "targeting the highest maturity level is not necessarily the best fit for every vendor."
The Forrester SaaS Maturity Model can be accessed here.
Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media.

"However, that lower cost might mean that they're weaker on security, so how do you compare those costs? The impact on VARs is that they might end up spending a lot of time and money on the service end."
Meanwhile, other vendors' pricing programs show there's no one magic solution for the entire industry. Stephen Richards, CA's executive vice president of sales and field operations, says the company's FlexSelect plan has received very positive results so far, but acknowledges that it best serves CA's preferred partners. Oracle has tinkered with its licensing and provided helpful tools like the software investment guide, which shows customers how to set up their implementations the way a stereo manual shows you how to set up a home-theater system. And at Sun, the company has begun helping its VAR partners realize new revenue streams.
"The reseller community tells us the value-add is in the up-selling and cross-selling of service for things like consulting and migration," says Sun StarOffice product-line manager Iyer Venkatesan. "We help them by marketing these services and pointing out other opportunities for value-adds."
Ultimately, it's crucial that VARs are more attuned than ever to clients' needs. Relavis, which resells IBM software, is committed to demonstrating a technology's usefulness before requiring its customers to buy it. Baum says the move to a complete service-provider model may still be a ways off, but there's no doubting customers' feelings about software prices. "We're seeing a strong downward pressure on pricing because companies are tired of expensive projects with long implementations," he says. "They're telling us, 'We've bought a lot of stuff over the past few years, so what you're selling better work with what we have and with minimal impact on our infrastructure." By listening to such input and adapting accordingly, Relavis and other VARs are giving themselves the chance to compete in this ever-changing marketplace.

We’ve listed some of the multi-vendor SaaS marketplaces we’ve joined as well as some other top SaaS marketplaces that are well worth considering to join.
Salesforce is probably the most widely known SaaS or CRM. They have a vast marketplace or app exchange with various searchable product categories. You also have the ability to offer your solution on their partner programme marketplace, resulting in being listed in their app exchange.
Typeform, a leading provider of interactive forms, also has a marketplace. They make it easy to add your SaaS application through their product partner initiative. All you need is a Typeform integration.
Other popular online SaaS marketplaces include:
- Campaign Monitor

Software as a Service (SaaS)
Software as a Service (SaaS) is a cloud based software delivery model in which the cloud typically hosts the application and data centrally and provide services to its users using a web browser. Our SaaS services ensure following practices are in consideration during software development.
- Global reach with capability of serving concurrent users efficiently up to its critical level
- Implementation and use of latest technologies in order to deliver rich user experience
- Ensure intuitiveness, stability, scalability, and robustness in delivered SaaS application development
- Smooth upgradation from older version to newer version of solution
- Compatibility checks across widely used browsers with easy to use interface
Your Requirement - Our Expertise:Complete SaaS Solution
Our SaaS application development solution covers variety of industries that we have covered so far
- E-Commerce Solutions (Generic, for many industries)
- Facility Management System (Facility Management Industry)
- Project Management System (IT Industry)
- Document Management System (Print & Media Industry, Law & Accountings)
- Content Management System (Generic, for many industries)
Additional SaaS services benefits available from Verve
- Software is hosted externally by a vendor
- Hosted on the Cloud
- Accessible via a browser over an internet connection
- SaaS is the pay-as-you-go model provides flexibility.
- Scalable architecture, changing your usage plan is easy. Adding more database space or more compute power as usage increases.
- SaaS is Cost Saver as vendor maintains the servers and infrastructure that support the application, as well as on-going costs like maintenance and upgrades.
- Highly secured access to developed solution to a large customer base
- Knowledge of building scalable Software as a Service (SaaS) application development on popular cloud infrastructures such as Amazon AWS, Windows Azure, Linode and Rackspace.
- Flexibility to clients to increase the size of the target market
- Rapid development and enhancement of products
- Overall low cost of solution development
- Better and Instant Scalability with faster development of dynamic products
- Minimal Management Overheads since inception of concept to its implementation

This takes customisation to the next level; offering micro and macro additions to make your storefront feel truly yours.
Truly make your eCommerce platform your own by capitalizing on the software’s overall branding capabilities. Grow your business by catering your storefronts to your clients. Offer them a one of a kind tailor-made experience, (e.g. look, feel, products, pricing, shipping and payment methods).
3. CRM software
The Customer Relationship Management software allows critical purchasing information and trends to be relayed to your sales teams for more optimised approaches.
The VARStreet CRM eliminates duplication by integrating it with the quoting model. This allows sales personnel to access complete data for every customer account.
Know more about the FREE CRM.
4. Sourcing and procurement
Costing is an important part of sourcing. How do you ensure you are not just getting the best deal but are able to validate quality and access distributor information? VARStreet offers the simplest way to increase your profit margins; sourcing right.
The sourcing and procurement functionality allows you to maintain real-time watch over distributor prices and inventory availability along with the ability to implement the necessary changes within the same portal.
Hunting for distributors? It stops with VARStreet that offers a ready list of over 45 verified IT and office supplies distributors within the United States and Canada.
Crisp, clean and rich content is now easily achievable. VARStreet helps you integrate detailed images, technology specifications, related products, descriptions, etc. Anything you feel will enhance your customer experience, VARStreet offers.
Welcome your brand into the digital age of marketing with a bang! VARStreet offers the best in online marketing tools to enhance brand visibility and image. Capitalise on the email marketing, SEO and social media integration features to spread the word.
6. Reporting and analytics
Need to understand how well your business is doing? The reporting and analytics capabilities offered by VARStreet help you keep tabs on real-time figures of your sales cycles and make better-informed business decisions.
And a lot more!
Selling with VARStreet is not limited to its extensive software catalog. The company offers a range of additional benefits that help both back and front end users maneuver their activities with ease.
- Customization extends to the workflows as well. Set up your own bundles or automated workflows to ease the complexities of staff and product management within your business.
- Ensure your business activities are compliant with your government contract.

Channel? Alliances? It’s where bad sales reps get hired. This is what the historical perception of those teams have been.
While it’s foolish to generalize every person in that role, truth is most of them relied on resellers to push their product. This worked great in legacy businesses since they wanted to procure new products through resellers that they had built long lasting relationships with to cut risk.
But…this buying process has since been disrupted by SaaS and Cloud products. From the person with the hands on keyboard to the CIO, everyone is purchasing solutions collectively as well as individually. Traditional Resellers are no longer needed as much because products can be simply purchased with a credit card and doing month-to-month contracts.
Companies are now forced to look at other channels for revenue. Studying successful SaaS companies of today and based on my experience, two channels will slowly replace resellers:
- Solution Partners
- Integration Partners
Solution partners act as an extension of the sales/CS/support teams, taking away the burden of recruiting and salaries.
They wrap their consulting services around SaaS products and earn a commission/referral fee for the sale. In exchange, they they are responsible for sales, tier 1 support and ongoing customer success. In a way they are resellers but with much more skin in the game.
It’s a win-win for the SaaS company as well as the partner. The SaaS company gets to grow in areas where they don’t have expertise in and the partner gets to be the product thought leader in the niche, whether it’s a particular geo or market (SMB, Mid-Market, Enterprise etc.)
The company had limited expertise selling to Enterprise clients so they decided to launch a focused partner program targeting System Integrators and Solution Providers. They’re calling it $1.45T opportunity ;)
Zendesk recognized in their 2017 annual report that their Enterprise clients needed more support than their smaller clients. As a result, they hired an executive in 2018 to expand their partner strategy with a focus on SI’s.
Integration partners create a deeper value prop for respective products and allow them to become more “sticky.”
SaaS companies often have an open API or a platform product strategy which makes it easy for their products to integrate with others. As SaaS stacks of companies get bigger, this approach allows two products to be gelled together for a unified customer experience.

Although this model is relatively risk free and easy to control budget wise, it still requires a solid IT skills sets, ideally internally or sourced through a vendor that has good knowledge of the open source platform and the internal e-commerce requirements. It will overall cost more time to implement then a straightforward SaaS model, described hereafter.
The fourth and by far the model that has the most appeal and traction lately is the SaaS model, whereby the E-commerce application is sold as a service and whereby the software is provided to you as a one-size fit-all solution.
There is first no customization needed, as everything is out-of-the-box and all data input can be done via a standard browser and Internet connection.
Your time to market can be counted in days, not weeks and certainly not months. Whatever your input is, can be in your e-commerce application almost immediately.
There is literally no upfront cost and there is no scaling issue, as the application will scale with the growth of your e-commerce application.
Updates and upgrades are part of the contract and included in the monthly or yearly service fee, so no extra hidden cost for that.
There is no hardware investment needed, as the service is hosted on the servers of the software vendor.
And most importantly, you do need to have an IT staff to run your e-commerce application, you can leave it in the hands of the business people making commercial decision, not technical decisions.
There are very few negatives for the SaaS model, but a few objections could come from:
customers that have security issues as they share a platform with other customers
the pace of innovation and new features that is not fitting with certain customer's requirements
difficulty of integration, although the application can sit alongside other web applications.
The SaaS model is by far the most appealing model for the majority of small and medium sized businesses and for any non-profit organization that is taking an e-commerce approach. For larger enterprises the SaaS model could be sitting alongside a larger corporate bought or build e-commerce application. It is fast and easy to set-up, and it can serve a niche purpose in the overall e-commerce strategy.
But for any organization where brand recognition, merchandising and marketing is the key driver, the SaaS model should be prime strategy. Time-to-market and speed of deployment are other key drivers to choose this model as a prime model.

Software as a service
Saas (software as a service) is a cooperation model with business customers, which is based on delivering software localised on a cloud, so it can be available anywhere, on any device with access to the internet.
If users want to exploit the functions of a shared business application, they just have to open it in a web browser. More and more people assume this solution as the most viable, mainly thanks to low periodic fees, which are not apparent to company’s budget, as well as the lack of long-lasting period of implementation. Saas solution permits immediate access to application’s functions, thanks to the available trial version during the test period. Another key Saas advantage is the possibility of using advanced applications, without the need to install or maintain hardware or software.
Saas vs On Premises
Saas model is opposite to traditional On Premises model, which demands buying accurate tools located on media and their subsequent installation on particular devices exploited by the users. Such purchase involves one-time payment, which may vary from few to several thousand pounds. Not every enterprise can afford such a sum, so more and more companies prefer Saas, where the initial fee is relatively lower and further cost of subscription is proportional to the level of resource consumption. It means that the payment is adequate to the number of users exploiting the shared application.
Another asset of Saas is the fact that the amount of application users is typically infinite. The length of subscription period depends on the conditions of the contract signed between the client and the performer. Saas solution may appear more profitable also because of the fact that the whole software is localised on the side of the performer. This means that the software house is responsible for software’s infrastructure, update, security, creation and restoration of backup copies of files and database in case of a breakdown. Therefore, there’s no need to worry about lack of access to the data or their complete loss. The users may also count on technical support within the software service, which is really helpful and time-saving. Because of this your company doesn't need to hire any additional IT specialists.
Despite the fact that Saas is definitely the most common and popular solution at this moment, it has its opponents. They acknowledge that this model is unstable, since the work of software is dependent on settlement of periodical subscription. Whereas the traditional business model guarantees unlimited access to purchased application.

Product Mix and IT VARs
An IT VAR is mid-channel; they buy white label hardware and software from manufacturers and developers up the chain who do NOT want to be bothered with retailing to the unwashed masses, and add their own branding to the final product.
Consider all those ~$100 tablets that came out last year. They all have the same chip in them. The manufacturers are mid-channel; they add value by completing the packaging job with screen, battery, sound, memory, etc, and put their own label on it. But then they have to SELL this thing somewhere...
They have relationships with chain retail sellers, small but highly trusted influencer organizations (eg. an accounting firm that also sells accounting software), IT shops who fix and install networks, and Managed Services providers who go around to different companies and maintain their IT equipment.
Each segment has its own needs and mix.
Now imagine you are the executive in charge of the sales and inventory managers of that VAR.
You need enough items in stock to feed the need (demand) from those different market segments.
You also want to avoid over-investing in inventory, because that ties up working capital.
Also, your sales staff are asking for direction. What should they "push"? Are the developers from the top pressuring you to move their product, or they'll consider giving the distribution rights to another VAR?
All this and more goes into the product mix decision. You have to see the future, watch your Planned vs Actual like a hawk, ensure inventory is on hand Just In Time, and a number of other crazy things.
Supporting this, ideally, is a robust integrated CRM, accounting, and inventory management system.

There are dozens of possible ways to develop software. A wide variety of existing programming languages with their own strong and weak sides, frameworks, libraries, and other development tools allow creating applications of different types: for desktops, for mobile devices, web applications that work via browser, etc. Different software development methodologies and frameworks like Scrum or Kanban will help you adapt the development process for various types of projects, reduce costs, eliminate risks, and use the available resources more efficient. But besides the development itself, there’s another important issue that requires close attention. We’re talking about the way of licensing and delivering the software.
When there’s a need to choose what framework, technology, or a programming language should be used during the development process, in most cases, the development company makes the final decision and the customer relies on the developer’s experience and skills. But the chosen software delivery model affects both the customer and the developer because different models have different pros and cons and require different development strategy.
In this article, we’ll talk about one of the existing software licensing and delivery models named Software as a Service, or SaaS, to be short, and the key benefits it offers.
What is SaaS?
SaaS is a centrally hosted software that is provided to a customer in the form of a service on a subscription basis. The applications of such kind run on the servers of SaaS providers and users can access them via browsers. Instead of buying an application, a user pays a “rent” that allows him to use it for a certain amount of time. Thus, users can decrease the use cost, which is one of the primary benefits of using SaaS. There’s no need for a user to think about the technical issues since the SaaS provider takes care of it.
Let’s continue with the main SaaS advantages and benefits for a customer.
Main Advantages and Benefits for Customer
When we talk about an application without singling out specific features, we usually mean in-house software, software that was created for using within the organization. In this case, the customer is responsible for the support of hardware, databases, storage, security issues, and other important aspects of successfully running application. As you can imagine, this approach entails high costs due to the necessity for a team of IT specialists and regular expertise.
For a small business or state-owned enterprises, this may become a headache. One of the possible solutions is SaaS.

can also become cumbersome, if not overwhelming, at times. Consider the following benefits when partnering with a Managed Service Provider.
Your MSP Is the Onl...
Comparison of SaaS, PaaS and IaaS
There are usually three concepts of cloud service, Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).
Whether it is IaaS, SaaS, and PaaS, each has its own intricacies, but today we're going to help you to differentiate SaaS, PaaS, and IaaS.
SaaS - Software-as-a-Service
Generally charged depending upon the number of users and charges are recurring monthly or yearly. Companies have the choices to add or remove users at any time without additional costs. Some of the most well known SaaS solutions are Microsoft office365, SalesForce, Google Apps. It is a responsibility of SaaS provides to manage Server, Network, and Security related threat intern it supports organization to reduce the cost of software ownership by removing the need for technical staff to manage install, manage, and upgrade software, as well as reduce the cost of licensing software.
PaaS - Platform-as-a-Service
A cloud service, typically providing a platfor...

We value partnerships as a way to expand our reach and provide even greater value to our clients.
We are always seeking to develop long-term relationships with like-minded organizations and individuals who share our commitment to delivering top-notch software development solutions.
Our partnership program is designed to create mutually beneficial relationships that enable both parties to achieve their business goals.
Our Engagement Model
Our partnership program is tailored to meet the specific needs of our partners and offers a wide range of benefits, including access to our expert team of developers, designers, and QA specialists.
Whether you're looking to expand your services, improve your existing products, or build new ones, we can help you achieve your goals.
As a CodeUp partner, you'll benefit from our extensive experience in software development, industry insights, and our commitment to quality and excellence. We work collaboratively with our partners to ensure that our solutions meet their unique requirements and deliver real value to their business.
We offer three engagement models to choose from based on your needs:
The Fixed Price model is suitable for smaller projects that take up to a month to complete or for projects with very detailed specifications where all functions and requirements are clear.
This model ensures that the project is completed within the budget and time frame as it allows us to accurately determine the duration and cost of the project. It's an ideal choice when requirements are well-defined and detailed.
Our team will estimate the scope and complexity of the project and provide a fixed price for the complete software development along with a project delivery schedule.
Time & Material
The Time & Material model is suitable for projects that have evolving requirements or lack well-defined plans at the outset.
It allows for flexibility in terms of team size and workload, which can help optimize time and costs. With this option, we provide skilled resources and bill the development effort at the end of each month based on a pre-negotiated hourly rate.
The engagement can range from a few months to several years, with the total project cost determined by the amount of time and resources expended, as well as the actual development effort contributed.
Dedicated Team (TaaS)
With the Dedicated Team model, you have the opportunity to hire a development team while leaving the hassle of managing salaries, hardware, software licenses, and other aspects of IT infrastructure management to us. You are free to interview, select, and manage each team member, and you retain full control over the team.

Firstly, because the SaaS model does not bring them the same income structure, secondly, because continuing to work with a distribution network was decreasing their profit margins and was damaging to the competitiveness of their product pricing. Today a landscape is taking shape with SaaS and managed service players who combine the indirect sales model with their own existing business model, and those who seek to redefine their role within the 3.0 IT economy.
|This section does not cite any references or sources. (December 2013)|
Unlike traditional software which is conventionally sold as a perpetual license with an up-front cost (and an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee. Consequently, the initial setup cost for SaaS is typically lower than the equivalent enterprise software. SaaS vendors typically price their applications based on some usage parameters, such as the number of users using the application. However, because in a SaaS environment customers' data reside with the SaaS vendor, opportunities also exist to charge per transaction, event, or other unit of value, such as the number of processors required.
The relatively low cost for user provisioning (i.e., setting up a new customer) in a multi-tenant environment enables some SaaS vendors to offer applications using the freemium model. In this model, a free service is made available with limited functionality or scope, and fees are charged for enhanced functionality or larger scope. Some other SaaS applications are completely free to users, with revenue being derived from alternate sources such as advertising.
A key driver of SaaS growth is SaaS vendors' ability to provide a price that is competitive with on-premises software. This is consistent with the traditional rationale for outsourcing IT systems, which involves applying economies of scale to application operation, i.e., an outside service provider may be able to offer better, cheaper, more reliable applications.
The vast majority of SaaS solutions are based on a multi-tenant architecture. With this model, a single version of the application, with a single configuration (hardware, network, operating system), is used for all customers ("tenants"). To support scalability, the application is installed on multiple machines (called horizontal scaling). In some cases, a second version of the application is set up to offer a select group of customers with access to pre-release versions of the applications (e.g., a beta version) for testing purposes.

Point: When choosing a vendor for your SaaS application, make sure that high availability is guaranteed to you in the vendor’s service level agreement (SLA).
Scale as needed
Instead of buying software, you simply subscribe to a SaaS offer. If you need more licenses for a limited period, you can flexibly add them online and vice versa cancel licenses that are no longer needed. So you only pay for the number of licenses you actually use.
Set up new workstations quickly and easily
SaaS frees you from having to install programs on local computers. A user only needs an in-app license, access data and an internet-enabled device.
SaaS makes it easier than ever for your team to work together. The data is stored centrally and is nevertheless available to every user in real time, anywhere and anytime. This is a decisive advantage, especially in times of telecommuting and remote work.
Always up to date
Software updates usually take a long time. With the SaaS model, the vendor ensures that updates, new features, and bug fixes are released for all users. A decisive advantage over on-site solutions. Here, updates need to be installed by users or IT. It may therefore happen that the software of different employees is at a different level.
Is SaaS the same as Cloud?
Software as a service is not the same as the cloud. The SaaS model is more of a subunit of cloud computing. In addition to SaaS, there are other ways to offer IT products “as a service” in the cloud:
- Infrastructure as a service (Iaas): The provider hosts hardware, software, storage space, components for the IT infrastructure.
- Platform as a Service (PaaS): Users can develop, operate and manage applications themselves. Because the infrastructure is in the cloud, you don’t need to configure or manage the servers yourself.
- Managed Software as a Service (MSaaS): MSaas goes even further than SaaS. Here, SaaS applications are monitored by IT experts, for example with regard to IT security, backup management, etc.
- Database as a service (DBaaS): here users can access databases without downloading or hosting them themselves
- Security as a Service: Security services are offered as a service via the cloud
Software-as-a-service providers rely on different pricing models, some of which can also be combined with each other.

Software as a service
Software as a service (SaaS; pronounced // or //) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software". SaaS is typically accessed by users using a thin client via a web browser. SaaS has become a common delivery model for many business applications, including office and messaging software, payroll processing software, DBMS software, management software, CAD software, development software, gamification, virtualization, accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM) and service desk management. SaaS has been incorporated into the strategy of all leading enterprise software companies. One of the biggest selling points for these companies is the potential to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider.
According to a Gartner Group estimate, SaaS sales in 2010 reached $10 billion, and were projected to increase to $12.1bn in 2011, up 20.7% from 2010. Gartner Group estimates that SaaS revenue will be more than double its 2010 numbers by 2015 and reach a projected $21.3bn. Customer relationship management (CRM) continues to be the largest market for SaaS. SaaS revenue within the CRM market was forecast to reach $3.8bn in 2011, up from $3.2bn in 2010.
The term "software as a service" (SaaS) is considered to be part of the nomenclature of cloud computing, along with infrastructure as a service (IaaS), platform as a service (PaaS), desktop as a service (DaaS), backend as a service (BaaS), and information technology management as a service (ITMaaS).
- 1 History
- 2 Distribution
- 3 Pricing
- 4 Architecture
- 5 Characteristics
- 6 Adoption drivers
- 7 Adoption challenges
- 8 Emerging trends
- 9 Data escrow
- 10 Criticism
- 11 See also
- 12 References
Centralized hosting of business applications dates back to the 1960s.

Offering Blesta licenses to your customers is a great way to add an additional revenue stream or value-add to your existing offering. There are two types of reseller accounts, Standard and VAR (Value Added Reseller). Which type is best for you depends largely on your target audience. If you want to sell licenses to the public, for installation with any hosting provider, a Standard reseller account is what you’ll need. If you are a hosting provider and want to offer licenses to your existing customers for free, as part of a hosting reseller plan for example, a VAR account might be right for you.
- Can sell licenses to the general public.
- Can sell both monthly and owned licenses.
- Pay per license model means you only pay for licenses you have.
- Pricing is determined by volume, the more licenses you sell, the lower per-license cost.
- Can only sell or offer licenses to customers as part of a value-add, such as inclusion as part of a web-hosting reseller account.
- Unlimited licenses for a flat monthly fee. Your cost stays the same regardless of the number of licenses, easy to budget!
- Just pay first month’s service to start.
Standard Reseller Pricing
Our tiered pricing structure means you get the best pricing for your volume bracket. To become a standard reseller and get discounted pricing you just need to contact sales once you have at least 4 active licenses.
Once a standard reseller, you can add and remove licenses from your account at anytime. Once a month we take a look at how many active monthly licenses you have and bill you for those. Owned licenses are billed when ordered.
|License Count||Monthly Branded||Owned Branded||Discount|
* Plan to offer Blesta exclusively? Email for further discounts on our standard reseller plan.
If you have an owned license, you can start with your first monthly license (Does not require 5 licenses). Signup in the client area under the “Reseller” section and get started right away!
VAR Reseller Pricing
Value Added Resellers get unlimited licenses for a fixed monthly fee. Give us a call at 714-398-8132, or email
so we can discuss this program and pricing.
Reseller API Docs
Version 2.0 of our Reseller API documentation can be viewed here.

The three main cloud computing models are Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS).
IaaS is a cloud computing model that provides users with access to virtualized computing resources over the internet. These resources include servers, storage, and networking. IaaS is a popular choice for businesses that want to reduce their IT infrastructure costs, as it allows them to rent computing resources instead of purchasing and maintaining their own hardware.
PaaS is a cloud computing model that provides users with a platform for building and deploying applications. PaaS provides users with a pre-configured environment that includes operating systems, databases, and development tools. This allows developers to focus on building their applications instead of managing the underlying infrastructure.
SaaS is a cloud computing model that provides users with access to software applications over the internet. SaaS applications are typically accessed through a web browser, and users pay a subscription fee for access to the software. SaaS is a popular choice for businesses that want to reduce their software licensing costs, as it allows them to rent software applications instead of purchasing and installing them on their own hardware.
Serverless computing is a cloud computing model that allows developers to build and run applications without having to manage the underlying infrastructure. In a serverless computing model, the cloud provider manages the infrastructure, and developers only pay for the computing resources that their applications use.
FaaS is a cloud computing model that allows developers to build and run applications as a series of small, independent functions. In a FaaS model, the cloud provider manages the infrastructure, and developers only pay for the computing resources that their functions use. FaaS is a popular choice for building event-driven applications, such as chatbots and IoT applications.
In summary, cloud computing models provide users with access to computing resources, development platforms, and software applications over the internet. The three main cloud computing models are IaaS, PaaS, and SaaS, while serverless computing and FaaS are newer models that allow developers to build and run applications without managing the underlying infrastructure.
Cloud Service Providers
Cloud service providers are companies that offer computing resources such as virtual machines, storage, and applications over the internet. These resources are usually provided on a pay-per-use basis, which means that customers only pay for the resources they consume. Some of the most popular cloud service providers include AWS, Microsoft Azure, and Google Cloud.

Cloud Strategies Services for SaaS Vendors
The challenges of SaaS startups and companies transforming to SaaS are different.
Cloud Strategies can help.
Each client’s requirements are unique, depending on the objectives of the client, the type of SaaS company profile, the stage of the company’s adoption of a SaaS model, and the resources required. Cloud Strategies can provide an independent assessment of a software company’s SaaS strategy for investors and boards, or work directly with the company to maximize its opportunity for success. Cloud Strategies can work at a high level providing an assessment and recommendations in an advisory role, or become an integral part of the company team to make their SaaS Business Work.
SaaS Company Profiles
The SaaS delivery and business models encompass a very wide variety of types of companies. The SaaS strategy will vary greatly, dependent on five primary characteristics of the SaaS company.
Greenfield or Established Businesses
Start-ups have the advantage of a clean slate, but don’t have the resources, image recognition, or channels of established players. Existing software vendors have many advantages, but the transition to SaaS can create competition with their existing products, additional working capital requirements, and issues with their existing channel.
Low or High Price Offering
Many basic SaaS products like Dropbox have a base edition that is free and entice their customers to move up to a paid version costing $5 to $10 per user per month. SaaS products vary in price from a few dollars per month for products like QuickBooks Online at around $30 to $60 per month to enterprise products such as NetSuite or Saleforce generally cost around $50 per seat per month with a wide variation up or down depending on the features. Some high-value, specialized SaaS products may cost as much as $600 per month. Services costs add significantly to the total cost of implementation in large, complex systems. The strategies and tactics for these SaaS offerings vary widely based on their price.
Degree of Services Required
Simple SaaS products have essentially no setup, or may have a minimum end user configuration such as setting up file locations for Dropbox. SaaS products have “Customer Self-Service” as a key attribute, allowing the company and the user to perform more of the setup operations for moderately complex products such as QuickBooks Online. More sophisticated products like NetSuite software have configuration which are beyond the scope of the end users and will generally be performed by the SaaS company, their VARs or other Implementation Partners.

Hybrid cloud combines best of both worlds, gives greater control that private cloud offers and also offers flexibility and cost effectiveness that a public cloud generally gives.
- Organization can maintain a private infrastructure for sensitive assets.
- Organization can take advantage of additional resources in the public cloud when you need them.
- Offers ability to scale to the public cloud, you pay for extra computing power only when needed.
SaaS, is a flexible cloud model that gives you access to software and applications like mail, ERP, collaboration and office productivity without purchasing a licensed copy outright. Instead, you engage with a platform’s tools via subscription, often through a web browser or custom desktop portal.
SaaS provider allows you to simply log in. This is typically available for a monthly cost by usage. No purchasing big software licenses that limit you to a single version.
With SaaS programs, your organizations IT department doesn’t have to manage patches and updates. These are performed regularly by the provider so you always have the latest version with full protection and functionality.
PaaS is best fit for companies who need development tools in a virtualized environment for more efficiency and productivity.
PaaS service lets you scale resources easily as the need arises, using only what you need, when you need it. Through this model, you can develop, deploy and manage your programs and apps without overloading your own server space.
IaaS is foundational cloud migration for your business. Through this model, your cloud provider, such as Amazon Web Services, Microsoft Azure and Google Cloud Platform, delivers and manages your storage, your computing power, your networking and your hosting.
In IaaS model, you maintain responsibility and control of your software, data and applications.
With IaaS, you get incredible availability, reliability and security for specific projects or variable workloads.
Each of the cloud offering model has its merits and is fit for different needs. Below table summerizes how they differ:
Many think that Azure offers all three model of cloud computing i.e. SaaS, PaaS, and IaaS. However that is not true, Azure only offers PaaS and IaaS.
A definition from Microsoft site for Azure:
"Azure is a comprehensive set of cloud services that developers and IT professionals use to build, deploy, and manage applications through our global network of datacenters. Integrated tools, DevOps, and a marketplace support you in efficiently building anything from simple mobile apps to internet-scale solutions".

Software As a Service (SaaS) – A New Product Delivery System
18 Mar. 2011 Software Development
Software as a Service (SaaS), also known as software on demand, is a software service that is accessed over the internet or is deployed to work behind a firewall on the local area network. With Software as a Service, a company licenses an application to clients as a service on demand, using a subscription pay model either by pay-as-you-go or at no charge, if there is an opportunity of getting revenue from other steams beside the user, such as through adverts etc. This application delivery model is part of the cloud computing business model where technology is in the cloud and accessed using the Internet.
Software as a Service is increasingly becoming the prevalent delivery model for services as the underlying technologies that support service-oriented architecture and web services matures. And also the popularity of new development approaches like Ajax have tremendously aided its growth. The ease of access to mobile broadband service have also supported user access to cloud computing services from anywhere in the world.
The conventional model of software distribution, where software is purchased and installed on personal computers is sometimes referred to as software as a product. The software as a service model has become a very common business application model which includes Accounting, Customer Relationship Management (CRM), Collaboration, Logistics & Supply chain, Enterprise resource planning (ERP), Human Resource Management (HRM), and Content Management System (Enterprise CMS).
Software as a Service has a lot of obvious benefits for the modern day business, which are as follows:
- It is accessible from anywhere in the world with an internet service
- There is no local server installation
- It reduces time to market
- It increases reliability of service
- It encourages pay per use or subscription based payment system
- It has easier administration
- Easy automatic updates and patch management
- Encourages compatibility, all users will have the same version of software.
Software as a Service is great for a startup company that aims to test before going full scale into their business or that wishes to start operating modestly. Besides, it is highly scalable which means that it has capacity to expand as the business grows. Since all aspects of the software as a service is left to the SaaS provider, a startup business owner will be able to focus more on growing his business instead of worrying about his IT infrastructures.
Companies have discovered that SaaS services are a more cost efficient way of using business software .

Types of cloud ERP
Publishers like to say that their ERP is ‘cloud.’ In some deployment models, the publisher moves the ERP’s underlying infrastructure without modifying the software package code on site. Publishers nonetheless praise such ‘lift and shift’ services because they are well suited to clients who are reluctant to adopt ERP products in SaaS mode but still want to take advantage of the scalability and management peace of mind that a cloud infrastructure brings.
The multitenant on-demand offering is the purest form of cloud (SaaS).
This is followed by the ‘monotenant on-demand’ model, where each customer has their own instance of the ERP software that runs on the vendor’s platform. In this ‘single-tenant SaaS’ model, the customer continues to have the scalable computing power and the flexibility of subscription pricing, but their data and ERP system is kept separate from other customers. Some companies choose this option for their security and confidentiality reasons or to meet the countries’ legal compliance in which they operate.
The two types of SaaS ERP (multitenant and single-tenant) are often hosted in a public cloud. The infrastructure and services depend on a provider other than the ERP publisher.
The third significant type of cloud ERP is the ‘private cloud.’ Monotenant SaaS is often one of them. In private cloud ERP, the software and hardware are those of a single customer. In some cases, the ERP client even exercises some control over the data center and does not delegate all the host’s responsibilities. A private cloud ERP can even run on-site within the walls of the client company. Rather than cloud, we could therefore speak of ERP in ‘hosted and managed mode.’
It is possible to combine private cloud and public cloud for an ERP, depending on the modules and layers. The same is right in the public cloud-only, where multitenant may be relevant for some layers and not for others. A customer can take advantage of the benefits of pooling at the database, operating system and hardware level while running their ERP application monotonously.
Cost-Efficient Cloud Storage
If you require a cloud solution that provides you cost-efficient storage, then an OpenStack based cloud is for you. VEXXHOST’s cloud offering is well integrated with multiple OpenStack projects that help you utilize your cloud resources to the maximum. Our pay as you go platform allows you to get started without any upfront cost, setup fees, or minimum costs.

Originally published on March 10, 2007
I have received an amazing amount of feedback on the Enterprise SaaS series; just about everyone who read it has contacted me with mostly positive comments, but usually someone has at least one concern. I am going to try to address all of their concerns at one time.
Hybrid SaaS != Hybrid Licensing Model
A couple of people have mentioned that trying to support a hybrid licensing (or business) model would be difficult at best. I couldn’t agree more. I never intended to support or even condone multiple licensing models.
I re-read what I wrote, and while it makes sense to me, you really have to follow it closely otherwise you could think I am supporting multiple licensing models. In fact, my “Hybrid SaaS” model is a hybrid technology model that is supported by only one licensing model, utility pricing. What I condone is pretty much technology agnostic and relies on the system being able to “call home” to handle the pricing. I think that is the future of the software industry more so than any actual technology.
That said, I think the SaaS delivery model is the future of software. I am definitely pro-SaaS, including Pureplay SaaS. This series was just to let people know that while we as technologists, entrepreneurs, and evangelists have adopted SaaS as the de facto standard for software delivery, Corporate America, as I have seen it, is not onboard with that. Are they changing? Yes. Will it get better? Absolutely. SaaS is just not ubiquitous yet and you must be prepared for that as a new SaaS start-up. In one or two years, these objections may go away completely; you still need to know your customer though.
A problem with many SaaS vendors is they come in and say “we’re a SaaS vendor” like the customer cares. Do on-premises software companies come in and say “our software is written in Java” or “we distribute our software on CDs”? No. And they shouldn’t because no one cares. The caveat with SaaS is that it is actually more difficult (hence the creation of my articles), because you actually need to make sure they can support that type of delivery mechanism.
But what about selling the benefits of the SaaS model? Yes, you need to do this.

By Clayton Browne
Software as a Service (SaaS), a relationship that provides on-demand access to a cloud based network with shared configurable computing resources, has enjoyed phenomenal growth over the last few years. But how successful have IT organizations been with structuring SaaS contracts to address SLAs and the variety of things that can go wrong? According to Gartner, global SaaS spending is anticipated to grow by 17.9 percent in 2012, totaling over $14.5 billion and SaaS is projected to grow into a $22 billion market by 2015.
SaaS providers generally price their services on the “utility” model where they charge clients a set fee based on volume of services used while the customer is responsible for security, data protection, compliance with laws, and contractually limited liability. SaaS contracts are very different from traditional outsourcing contracts where the provider typically offers service availability and quality guarantees, and both parties typically share significant liability.
SaaS providers today offer a broad spectrum of cloud-based services ranging from providing access to apps from remote networks to PaaS (Platform-as-a-Service) and IaaS (Infrastructure-as-a-Service).
Major players in the SaaS industry like EC2, Amazon, IBM, and Microsoft offer IaaS for customers that don’t want to manage proprietary IT infrastructure, but want to maintain control of their software environment. IaaS essentially provides a virtual machine network where businesses can run whatever software they want, with the provider simply maintaining the virtual network.
PaaS is an IT outsourcing service somewhere between SaaS and IaaS, where providers offer businesses a set of tools to develop apps, those business-specific proprietary apps are then run in the PaaS environment (ex. Windows Azure).
The one-size-fits-all utility pricing model of public cloud SaaS providers fits the needs of many small and medium-sized businesses with pay as you go pricing. However, the inflexibility and the lack of service availability guarantees make utility pricing models difficult for larger businesses to accept, especially when dealing with mission-critical functions. Sharing risk has practically become a mantra in big business today, and SaaS providers are discovering that they must share risk to convince larger businesses to outsource their mission-critical functions.

The types of cloud computing available are originally three. However, new demands and opportunities have led to new types gaining ground, as follows:
In the public model (Public Cloud), the resources used by users are shared.
In it, the service provider makes resources available, such as virtual machines (VMs), applications or storage, to the general public over the Internet. Public cloud services can be free or offered on a “pay-per-use” model.
The public cloud is characterized by being a virtualized environment, that is, designed by virtual machines on a set of servers (cluster). Despite the sharing of resources by users, each tenant in the public cloud has their data isolated from the others and both their privileges and access to them are individualized by user and password .
Another characteristic of the public cloud is the reliance on the use of high bandwidth to transmit data quickly to a large number of users. As for storage, it is usually redundant, with data replication in different locations, which results in high resilience and security.
Basically, the implementation of systems in the cloud is carried out by the cloud provider in conjunction with the IT team of the contracting company and the software vendor.
The cloud provider performs environment provisioning, database installation and configuration, access security, communication tools, among other activities. And softwarehouses are responsible for accessing the environments created by the cloud provider and installing their applications in that environment.
All teams (IT staff, softwarehouse and cloud provider) must follow the approval and start of production to make sure the migration is successful.
Cloud computing has become the next main driver of business innovation, with a focus on enhancing new business models and services across various industries, especially telecommunications, healthcare, and government. For some service providers, cloud service models can unlock access and create future opportunities for new consumer segments, such as small business and emerging markets. This is primarily because they provide opportunities for the acquisition and management of cloud computing tools and software systems.
Cloud technologies allow businesses to conduct their vital functions in a better environment that offers efficient support for starting or growing a company without significant investments. There is ample scope for optimization of business processes and adaptation to changing market conditions by introducing various cloud service models.
In this article, we will explain the difference between such cloud service models as SaaS, PaaS, IaaS and the likes. Check out the full article here.
The fundamental concept of the two is adaptability. It refers to the system environment’s ability to use as many resources as required.

The more responsibility you shift to the cloud service provider the less control you have over security, business requirements, etc. but the faster you can get to market. On the flip side, the more you control the more work you have to do and the longer it takes to get to market.
With SaaS, the consumer has very little control over the application other than who has access. The consumer can alter various configurations but often has no say in SLAs, maintenance windows, underlying architecture, etc.
The advantage is that the consumer can quickly be up and running using the SaaS solution and does not have to manage and maintain the application freeing up precious IT resources to work on other priorities.
Another advantage is that the SaaS provider keeps up with changes in technology so that the consumer does not have to. For example, as more devices and tablets hit the market, the service provider makes the necessary changes to ensure the SaaS solution can support these devices.
With PaaS, the consumer does not have to manage hardware, operating systems, database systems, programming stacks, etc. Instead they focus on building software on top of these robust platforms.
The downside is that the developers must work within the constraints of the platform which may not be optimal for high performing architectures. Another disadvantage is that the consumer is highly reliable on the SLAs of the PaaS providers. Some of these PaaS providers like Heroku run on top of Amazon Web Services (AWS), an IaaS provider. When AWS has issues the developers are at the mercy of PaaS providers like Heroku to stay highly available.
When the PaaS service goes down the developers are mostly helpless and must wait until the PaaS provider restores services.
With IaaS, consumers have the absolute most control over all three cloud service models. The advantage of IaaS is that the infrastructure is abstracted and made available as a collection of APIs.
The IaaS providers provide seemingly infinite cloud resources available in minutes on demand without the long procurement cycles of the past. Application can be built to scale on demand as workloads increase and decrease consumption of compute resources as workloads decrease, thus optimizing the infrastructure spend. No longer do companies need to by two or three times the capacity to sit idle in the case of a peak workload.
The downside is the consumer is constrained to a subset of virtual cloud servers. Some applications require very specific hardware requirements which may not be available from the cloud service provider.

SaaS is also known as “on-demand software”, and typical SaaS applications are web applications that are available over the Internet, with functions such as invoicing, customer relationship management (CRM) and service desk management.
Because these software applications are accessed via web browser, the users never need to think about set-up, updates or maintenance. The cloud provider manages the application and the users pay a subscription fee to gain access.
Platform as a Service (PaaS) is a service model that allows its users to run and manage applications without having to build and maintain the infrastructure associated with that process. PaaS is suitable for developers and programmers as it enables high-level programming with reduced complexity. The users manage the applications and services, and the cloud provider manages everything else, typically via a pay-as-you-go model.
Application Platform as a Service (aPaaS) is sometimes used interchangeably with PaaS, but it can be seen as a subcategory that includes only the services required for application development.
Infrastructure as a Service (IaaS) is a form of cloud computing in which the cloud provider manages the infrastructure (meaning servers, compute, network and storage resources) for users. The infrastructure is delivered over the Internet and accessed through an API or dashboard. While the cloud provider manages the infrastructure, the users are responsible for purchasing and managing their own operating systems, middleware and applications. IaaS enables users to scale resources up and down with demand via a pay-as-you-go model. This allows user to avoid high expenditures associated with buying and managing infrastructure, along with the burden of owning unnecessary infrastructure during fluctuating workloads.
There are 4 main types of cloud computing: private cloud, public cloud, hybrid cloud, and multi-clouds. To get the best value out of a cloud solution, it is necessary to evaluate the effectiveness of current solutions, identify the business objectives these solutions are failing to meet and evaluate those results to define a cloud solution that best suits your organization and its goals.
Cloud computing dedicated for (use by) only one business or organization, has a secure private network and is not accessible to outsiders. Thus, private clouds are often used by financial institutions, government and any other mid- to large-sized organization with business-critical operations seeking enhanced control over their environment.
IT services are maintained and hosted by an external provider, delivered digitally and shared across organizations as part of a public cloud. Some key examples include Microsoft Azure, Amazon Web Services (AWS) and Google Cloud.

- Multi-tenant architectures, which drive cost efficiency for SaaS solution providers, limit customization of applications for large clients, inhibiting such applications from being used in scenarios (applicable mostly to large enterprises) for which such customization is necessary.
- Some business applications require access to or integration with customer's current data. When such data are large in volume or sensitive (e.g., end users' personal information), integrating them with remotely hosted software can be costly or risky, or can conflict with data governance regulations.
- Constitutional search/seizure warrant laws do not protect all forms of SaaS dynamically stored data. The end result is that a link is added to the chain of security where access to the data, and, by extension, misuse of these data, are limited only by the assumed honesty of 3rd parties or government agencies able to access the data on their own recognizance.
- Switching SaaS vendors may involve the slow and difficult task of transferring very large data files over the Internet.
- Organizations that adopt SaaS may find they are forced into adopting new versions, which might result in unforeseen training costs or an increase in probability that a user might make an error.
- Relying on an Internet connection means that data are transferred to and from a SaaS firm at Internet speeds, rather than the potentially higher speeds of a firm’s internal network.
The standard model also has limitations:
- Compatibility with hardware, other software, and operating systems.
- Licensing and compliance problems (unauthorized copies of the software program putting the organization at risk of fines or litigation).
- Maintenance, support, and patch revision processes.
- Can the SaaS hosting company guarantee the uptime level agreed in the SLA (Service Level Agreement)?
As a result of widespread fragmentation in the SaaS provider space, there is an emerging trend towards the development of SaaS Integration Platforms (SIP). These SIPs allow subscribers to access multiple SaaS applications through a common platform. They also offer new application developers an opportunity to quickly develop and deploy new applications. This trend is being referred to as the "third wave" in software adoption - where SaaS moves beyond standalone applications to become a comprehensive platform. Zoho and Sutisoft are two companies that offer comprehensive SIPs today. Several other industry players, including Salesforce, Microsoft, and Oracle are aggressively developing similar integration platforms.

SaaS is very common for non-core competency type applications like customer relationship management (CRM), human resources applications, and financial and accounting applications.
Many companies are now going away from the legacy model of shipping software to clients or delivering software internally over the internal network to a SaaS model where the software is available 24 by 7 over the internet.
In this model, software is updated in one place and immediately available to end users as opposed to the old ship and upgrade method of the past.
TRP: What should users consider when determining which is the right cloud service model for their business?
MK: The proper question is what cloud service model is right for the application. Each enterprise should expect to deploy applications and services using all three cloud service models.
Use a hammer to pound nails and a screw driver to turn screws. There are many factors that determine which cloud service model to use.
The first is a build versus buy decision. Should we right the code ourselves or pay for a SaaS solution that provides the functionality on demand? If the service is not a core competency, SaaS is usually a very good alternative to building as long as the service is affordable, mature, and meets the business requirements.
The PaaS vs. IaaS decision typically is determined by the performance and scalability requirements of the application. PaaS solutions have limitations on their ability to achieve very high scale due to the fact that these platforms must provide auto scaling and failover capabilities for all tenants of the platform.
With IaaS, it is up to the consumer to architect for scale and failover. PaaS solutions have upper bound limitations by client that limit how much compute resources a consumer can request making PaaS less desirable for very high scaling and performing solutions.
The beauty of PaaS is that it abstracts away the infrastructure and application stack so that developers only need to focus on building business functionality. PaaS promises increased speed to market but is the least mature of the three cloud service models. Some companies do not trust PaaS yet and will simply default to IaaS.
IaaS should be used when high scale and performance requirements are important. It is also a desirable option for companies who want more control over the application stack whether it be for performance, security, or control reasons.
TRP: What are the pros and cons of each service model?
MK: With cloud service models, there is a tradeoff between control and agility.

The cloud has had a transformational impact on businesses of all sizes – from small and midsized businesses (SMBs) to large enterprises – and it’s showing no signs of slowing down.
According to analyst house Gartner, the use of cloud computing is still growing and will become the bulk of new IT spend by 2016, a year that the company predicts will see hybrid cloud overtake private cloud, with nearly half of large enterprises having deployments by the end of 2017.
Despite its high uptake, the most suitable route into the cloud is not always so clear cut for many organisations moving on from the tried and tested client-server model.
To shed light on the advantages and disadvantages of cloud computing’s three main service delivery models – software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) – we spoke to Mike Kavis, VP and Principal Architect for Cloud Technology Partners and author of ‘Architecting the cloud’.
TechRadar Pro: Can you summarise the different cloud service delivery models available?
MK: There are three cloud service models: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).
With each cloud service model, certain responsibilities are shifted to the cloud service provider allowing consumers of cloud services to focus more on their own business requirements and less on the underlying technologies.
IaaS abstracts the underlying infrastructure and data center capabilities so that consumers no longer have to rack and stack hardware, power and cool data centers, and procure hardware. Computer resources can be provisioned on demand as a utility, much like how we consume water and electricity today.
PaaS takes us one level higher in the stack and abstracts that operating system, database, application server, and programming language.
Consumers using PaaS can focus on building software on top of the platform and no longer have to worry about installing, managing, and patching LAMP stacks or Windows operating systems. PaaS also takes care of scaling, failover, and many other technical design considerations so that developers can focus on business applications and less on the underlying IT "plumbing".
SaaS is the ultimate level of abstraction. With SaaS, the entire application or service is delivered over the web through a browser and or via an API. In this service model, the consumer only needs to focus on administering users to the system.

The premise of PaaS though is not only to offer maintenance free application stack but also additional services that you can utilize in your application. Very often PaaS providers are exposing middleware and databases as services and abstract the connectivity to those through APIs in order to free up developers from the need to locate the actual systems. Additional services can be authentication and authorization, video encoding, location based services etc. Using the PaaS services will allow you to abstract your applications from the underlying stack and as long as the APIs are kept intact it will be protected from failures between platform updates.
Software-as-a-Service (SaaS) Model
SaaS is the model with the highest abstraction and offers the most maintenance free option. As a SaaS consumer you are just using the software offered by the vendor. As depicted on the picture the whole stack is maintained by the vendor. This includes also updates for the application as well as application data management. SaaS model is very similar to the off-the-shelf software model where you go and buy the CD, install the software and start using it.
Traditionally one of the hardest problems application developers had to deal with was the data migration between different versions. SaaS vendors are also responsible for migrating your data and keeping it consistent. Similar to the off-the-shelf software model you can rely that you can access and read your data once you upgrade to a new version.
The SaaS model is the most resource-efficient model because it utilizes application multi-tenancy. What this means is that the same application instance handles multiple user-organizations. This is good for both the vendor and the customer because better resource utilization brings the maintenance costs down and hence the price for the services down. On the other side though tenant data is comingled and there is the security risk of one tenant accidentally getting access to another tenant's data.
Although not exhaustive the cloud computing service models explanation above should be enough to kick-start your initial discussion about your cloud strategy.
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Oct.

Software as a service company (SaaS) is a software distribution company in which a third-party provider renders hosting services for applications, availing them for customers over the Interest. A SaaS company delivers applications to its customers over the Internet in form of a service. The user does not have to install or maintain a software, but rather has to access it via the internet.
A SaaS company frees the user from the complications of managing intricate software and maintaining hardware. Sometimes, SaaS applications are also known as web-based, on-demand or hosted software which runs on the SaaS provider’s servers. The service provider manages the security, availability, and performance of the application.
Through SaaS, data can be accessed from any remote device which has access to an internet connection and a web browser. This method is advantageous as the company is not required to buy comprehensive hardware to host the software and allows the buyer to externalize IT issues like troubleshoot and maintenance of the software.
A SaaS company eliminates the need for clients to install and run applications on their computers or data centres. This eliminates the expense of hardware acquisition, provisioning, and maintenance, as well as software licensing, installation and support. It also provides a flexible system of payments as the customers subscribe to the applications on either a monthly or pay-as-you-go method.
The ascent of SaaS model is parallel to the rise of cloud-based computing, which makes it highly scalable giving customers the option of accessing as many services as they require. For large organizations, updating software was a time-consuming endeavour. Depending upon the service level agreement (SLA), the customer’s data is stored locally, in the cloud or both.
Types of software that have migrated to a SaaS model are often focused on enterprise-level services, such as human resources, customer relationship management, and content management. These types of tasks are often collaborative in nature, requiring employees from various departments to share, edit, and publish material while not necessarily in the same office.
SaaS has numerous uses including tracking leads, scheduling events, managing transactions, automating sign up, auditing and more. The only drawbacks involved in adopting SaaS model is the issue of data security and speed of delivery. As the data is stored on external servers, companies have to be sure that it is safe and cannot be accessed by unauthorized parties. Slow Internet connections can reduce performance, especially if the cloud servers are being accessed from far off distances. Internal networks tend to be faster than Internet connections.

This is common in applications like VoIP (voice over Internet protocol).
The fifth model is service-based. The vendor sells managementservices. Examples are Red Hat and JBoss.
“We see companies falling into several of these categories. The debateis the question, is it legit to do this? My response is yes. Opensource can accommodate a variety of models. This is great for theindustry. I see no need to pick sides,” Roberts told LinuxInsider.

In 2019, the public cloud services market was expected to reach around 214.3 billion U.S. dollars in size and by 2022 market revenue was forecast to exceed 331.2 billion U.S. dollars. | Statista
Public cloud services are gaining a lot of traction. Startups, SMEs, and enterprises are recognizing the benefits of cloud and thus, are migrating to the most relevant service provider to improve ROI, efficiency, and time-to-market.
When moving to cloud, it is important to understand the different types of services that can be availed by an organization. Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) are three popular models of cloud services. The later segment discusses what they are, their benefits, differences, and how to choose the right according to business requirements.
SaaS, also known as “on-demand software” is a software distribution model wherein a service provider hosts an application at a data center for customers to be accessed via the internet. Such a service frees up the customers from maintaining hardware or other resources to use the software. All that’s needed is a web browser or a client program.
The source code of the software is the same for all the customers and any change/updation in the software is rolled out to all the subscribers of the software. Organizations also have the option to integrate SaaS solutions with their own applications using APIs. For example, a business can create its own software and integrate the functionality of a SaaS solution through APIs.
Human capital management (HCM) software, collaboration software, and customer relationship management (CRM) software are amongst applications where SaaS has a high penetration rate. | Statista
Examples: Salesforce, Hubspot, MailChimp, Shopify, Slack
- Since the SaaS model doesn’t need to install and run applications, it saves organizations from the expense of hardware acquisition, maintenance, and software licensing.
- For availing SaaS services, customers have the pay-as-you-go model. PAYG allows users to pay for the services only for the time it is utilized.
- A SaaS service can be scaled as required. Users can start with fewer features and functionalities of the software and then extend them as the demand strikes.
- With a SaaS solution, the updates are installed automatically.

If you’re a traditional on-premises software company, you’re in the right place. Today, I will talk about how cloud computing can transform your business. In a subsequent Cisco Blog, I’ll discuss the implication this move will have on your sales and distribution strategy.
Model One Business Model
Traditional software companies have operated in a Model One Business Model. In this on-premises model, the customer buys a perpetual license for software and then pays annual support and maintenance fees, which turn out to be another kind of subscription revenue stream. While that might seem to be the end of the cost to the customer, it’s not. The customer is going to have to spend money managing the software – and it’s not cheap.
Read More »
Tags: CIO, Cloud Computing, isv, onpremise, software
Many years ago I found myself talking to venture capitalists about the differences between SaaS, outsourcing, ASPs, MSPs, online applications; etc. Also I noticed that my Stanford students had little understanding of the economics of software, so I developed the idea of seven business models to cover everything in the software business, and remove the buzzwords and replace them with economic models.
In my previous blog post we discussed the first four models, this post will cover Models Five through Seven.
We ended the last blog talking about Model Four being able to provide management of the security, availability, performance and change of the software at nearly 10x less cost.
The question we left with was “how”?
How is it possible to decrease the cost of management without just paying people a fraction of what they made previously?
Read More »
Tags: business models, CIO, Cloud Computing, isv, on-premise, open source, outsourcing, SaaS
Many years ago I found myself talking to a venture capitalist about the differences between SaaS, outsourcing, ASPs, MSPs, online applications; etc. Also I noticed that my Stanford students had little understanding of the economics of software, so I developed the idea of seven business models to cover everything in the software business, remove the buzzwords and replace them with economic models.
In my previous post, I talked about the Seven Ways to Move to the Cloud. In the second issue (there’s a lot here), I’ll break this into two separate posts, discussing models one through four here, and models five through seven in the next issue publishing on Monday, March 2.

Stages of the product-led SaaS pricing roadmap include the following:
No usage-based pricing or packaging
Just like it sounds, with this type of model, you don’t price with a usage-based pricing model, and you don’t have any usage elements incorporated into your packaging strategy. This model is usually best for products with per-user pricing where everyone in the organization is intended to be a user.
A good example is Lattice, a provider of employee engagement software. This model is typically a starting point and ending point for companies that are unlikely to deploy a usage-based model.
Usage-based tiering with traditional pricing
This is the predominant model among today’s product-led SaaS leaders. With this model, you have traditional subscription pricing with a flat-fee or per-user pricing model. You define clear tiers of your product (typically three to five), with each tier imposing limits on consumption.
Tiers are defined around a clear pricing metric that ties to your value metric, and a small number of other critical usage metrics. This model incentivizes customers to upgrade when they need more features or users, as well as for usage when they exceed the imposed limits of their selected plan.
Usage-based tiering with traditional pricing, plus conditional usage-based pricing
This model uses the same tenets of the previous model but applies additional charges based on usage-based pricing. Most commonly, these additional charges are for overage.
EXAMPLE: A business intelligence software company may charge a flat-fee or per-user price for a given plan and impose a plan tier limit of published dashboards.
With this model, the company would then charge an overage fee per additional published dashboard. Other variants of this model use the same structure but apply different rules for what triggers the conditional usage-based pricing.
A common example is feature-based pricing, such as that used by Stripe or others in the payments market. There is a base charge and other charges that are enabled based on situational usage of those features. These are different than add-on products in that they can be dynamically enabled or disabled on a transaction-by-transaction basis.
Pure usage-based pricing
This refers to a model in which the company prices solely based on usage.
How to choose the right product-led SaaS pricing strategy
The first step is to ensure that your organization properly defines what being product-led means for your business. Being product-led is a company ethos that extends well beyond pricing and impacts all facets of your business.

In this day and age, technology has seamlessly integrated itself in the way we trade. For example, cloud computing has exponentially grown as a business producing billions of revenue in the US alone.
From large-scale enterprises to lean startup teams, several companies have adopted cloud computing services to improve their system. One of the most popular among the cloud-based services is Software as a service (SaaS). The flexibility and scalability that SaaS provides greatly appeal to new and veteran entrepreneurs alike.
But, does SaaS really work for all types of businesses? How will you know if it is right for your company?
The answer, learning what the model is about and assessing whether or not it suits your operations.
In this entry, we’ll dive deeper into what SaaS is all about and why businesses clamor towards it. Before that, let’s first understand what is cloud computing.
The term cloud has come a long way from simply being a celestial cotton-like matter. In the world of technology, a cloud is an analogy for the Internet. Back in the day when diagrams and presentations were the things, they used to draw a cloud in their charts to represent a vague picture of the Internet.
So, if you’ve heard the phrase “it’s in the cloud,” that means you’ve stored information over the Internet instead of your local hard drive. Since its conception, the famous cloud gave birth to various kinds of software services.
Today, cloud computing comes with nomenclature of services namely: Software as a service (SaaS), Infrastructure as a service (IaaS), Platform as a service (PaaS), and Serverless computing.
Software as a Service (SaaS) happens to be one of the most popular terms because of its wide usage. But what is SaaS, exactly?
Defining Software as a Service
SaaS is a software delivery model that lets you access data from any device with an Internet connection. Instead of downloading software and undergoing a painful installation process, you can simply run your applications via the Internet. The cloud platform can cater to any business app ranging from office software to unified communications.
We can define SaaS as a way to skip all the hassles of setting up concrete servers for your local hard drive. Gone are the days you need to assemble a series of expensive IT infrastructure to run software and hardware configurations. With the SaaS business model, you leave all the maintenance of servers and databases to your software vendors.

This automation reduces the stress from IT staff to keep a check on a few updates and changes that have been done for the betterment of the solution.
In this model of cloud computing, hardware and software tools are provided, primarily for application development. In this case, the cloud service provider hosts the hardware and software its own infrastructure and make it available for the users over the internet. This not only frees the organization from investing in hardware and software to run a new application (operating system, web servers, databases, and access to a programming-language(s) execution environment, etc.). Along with this, PaaS products enable the development team to collaborate and work together, irrespective of their physical location.
By 2019, the platform as a service market is estimated to have a worth of 19 billion U.S. dollars. | Statista
Examples: Windows Azure, Google App Engine, AWS Elastic Beanstalk
- PaaS models reduce the CapEx cost of organizations that goes in providing hardware and software on-premise. PaaS providers charge a monthly fee on per user basis.
- Product-as-a-Service models provide agility to the software development cycle by making the much-needed tools and applications available, whenever needed. This helps to improve an application’s time to market as the development begins without delays.
In this model of cloud computing, a cloud service provider hosts infrastructure components on cloud, which are usually hosted on-premise. These components may include but are not limited to servers, storage, and networking hardware. While platforms like AWS, Google Cloud are examples of public clouds, organizations can set up their own infrastructure on a private cloud.
By 2019, the infrastructure as a service (IaaS) market is expected to have a worth of 38.9 billion U.S. dollars. | Statista
Examples: Google Compute Engine, Rackspace, Amazon Web Services
- IaaS platforms allow organizations to set up an infrastructure simply by running scripts. This not only includes deploying virtual servers but also has pre-configured databases, storage systems, load balancers, network infrastructure, etc.
- Depending upon business requirements, IaaS allows to scale up or down resources. With such flexibility to scale the infra, it is possible for businesses to respond to the opportunities and challenges that come their way.
- IaaS model facilitates businesses to save significantly over CapEx and OpEx. Small businesses such as startups can start with small infrastructure and then scale as the business evolves.

Types of Cloud Computing
Cloud computing is providing developers and IT departments with the ability to focus on what matters most and avoid undifferentiated work like procurement, maintenance, and capacity planning. As cloud computing has grown in popularity, several different models and deployment strategies have emerged to help meet specific needs of different users. Each type of cloud service, and deployment method, provides you with different levels of control, flexibility, and management. Understanding the differences between Infrastructure as a Service, Platform as a Service, and Software as a Service, as well as what deployment strategies you can use, can help you decide what set of services is right for your needs.
Cloud Computing Models
There are three main models for cloud computing. Each model represents a different part of the cloud computing stack.
Infrastructure as a Service (IaaS)
Infrastructure as a Service, sometimes abbreviated as IaaS, contains the basic building blocks for cloud IT and typically provide access to networking features, computers (virtual or on dedicated hardware), and data storage space. Infrastructure as a Service provides you with the highest level of flexibility and management control over your IT resources and is most similar to existing IT resources that many IT departments and developers are familiar with today.
Platform as a Service (PaaS)
Platforms as a service remove the need for organizations to manage the underlying infrastructure (usually hardware and operating systems) and allow you to focus on the deployment and management of your applications. This helps you be more efficient as you don’t need to worry about resource procurement, capacity planning, software maintenance, patching, or any of the other undifferentiated heavy lifting involved in running your application.
Software as a Service (SaaS)
Software as a Service provides you with a completed product that is run and managed by the service provider. In most cases, people referring to Software as a Service are referring to end-user applications. With a SaaS offering you do not have to think about how the service is maintained or how the underlying infrastructure is managed; you only need to think about how you will use that particular piece software. A common example of a SaaS application is web-based email where you can send and receive email without having to manage feature additions to the email product or maintaining the servers and operating systems that the email program is running on.
Cloud Computing Deployment Models
A cloud-based application is fully deployed in the cloud and all parts of the application run in the cloud.

Quite often you end up with a software that you only use half of a quarter, but you of course pay for the entire application
most of the software's are stand alone and difficult to integrate with existing systems
future enhancements and updates might not be useful for your particular needs
it will always be an expensive solution compared to the hosted or SaaS solutions
the IT skills required to implement the solution might not be in house, so your cost will be augmented
your switching cost is very high, so your risk will be higher then with other models
and last this is not a fits-all solution as you will need to host the software in your own or in a hosted data center.
The second delivery model is the build model, whereas the customer is building its own e-commerce application in-house and integrating this with the existing ERM, CRM and other applications.
In favor of this model are: you can build exactly what you need, you can take full advantage of your internal systems and your internal IT competencies, you can be unique in the marketplace with a unique solution, and you can tie all your e-commerce channels to market together in one system that fits it all for you.
The minors of this model are:
it's a risky and expensive model, which is using highly competent and skilled staff at a high opportunity cost and with a risk of losing these assets to companies for which IT is a core competency, not an add-on business.
Time to market can be long and even too long as you want to build a completely integrated and unique system
cost of maintenance and upgrade could be become prohibitive, as you need to employ the same skilled people as the ones who build the system
build solution can become obsolete, technology wise as the project needs to stick to its technology choices for too long to justify a return on investment
The third delivery model is a platform model, that is a kind of hybrid between buying a software license and building an own platform. This is the open source world, whereby there is a platform that can be designed and enhanced by an internal IT team, system integrators or vendors that are familiar with the open source platform. The source code is available, API are developed and services are to a certain extend reusable and you have a community of developers readily available to give you a hand. There is the flexibility of ready made volumes that if needed can be adapted to your needs, and existing applications can be integrated more easily then within the build model.

- User-based SaaS pricing model: this pricing model involves charging your customers based on how many users they have or how many of them will be using the product. It makes things much simpler for your customers because they can pick and choose a plan most suitable for their company size and change it if it increases or decreases.
- Pricing per feature SaaS pricing model: here your users’ subscription costs are determined by how many features they will need. It’s a fair pricing method that allows users to pay for only what they’ll use. If their use case changes or they need additional features, they can always upgrade.
- Tiered SaaS pricing model: most SaaS businesses use this pricing strategy because it allows you to target different types of customers since there’s a plan for everyone. It involves using multiple packages with various features and prices to attract customers.
- Pay-as-you-go SaaS pricing model: this pricing strategy is most commonly used by infrastructure software companies and it involves charging users based on how they use the product. The more time customers spend using your product, the higher their subscription fee is.
Step 4: Decide on your sales strategy
Before you launch your product, you have to decide on the relevant various sales strategies and approach you will adopt to acquire customers. In SaaS, there are two main types of sales go-to-market strategies employed to attract and convert potential customers.
Product-led growth strategy
In a product-led go-to-market strategy, your product is the major focus and the center of all marketing and sales efforts. This strategy involves using your product as the driving force for customer acquisition, activation, and retention.
Here, all users are allowed to experience the product for themselves under a free trial or freemium version. Users don’t need to go through members of your sales team or a sales funnel before they convert. Once they experience your product and receive value, it’s easier for them to become paying customers, and for you to increase customer lifetime value.
If you choose this strategy, marketing should be an essential part of your product development strategy.
A lot of SaaS companies adopt this product-led growth strategy, e.g, Slack and Dropbox. It is done by building a value-filled product experience that encourages users to stick around.
Implement a product-led growth strategy for your SaaS now!
Sales-led growth strategy
The sales-led strategy works best for enterprise companies like Salesforce and Microsoft whose products require more high-level guidance with a longer sales cycle.

Software to be a Service (SaaS) has become one of the most common ways that corporations sell or support their products and products and services. The term on its own sounds complex, yet there are several aspects which have been common amongst SaaS courses, including computer software licensing, remote hosting, and support for any sorts of components, software, and peripherals.
Program to be a Service (SaaS) is a system model just where software is distributed and organised centrally on the subscription basis. In some cases, it has been called “on-demand” software, and previously was referred to as “cloud computing” by simply Microsoft. Program as a Service plan (SaaS) uses a virtual private network (VPN) or perhaps an ISP connection to hook up the customer for the source code and generate it designed for use by the customer’s personal applications.
Program as a Assistance (SaaS) is normally described as the capacity to use applications from anyplace with a web connection. The solution applications during installation into a machine for them to be reached remotely by simply customers who are located anywhere in the world. Customers can also use software applications upon any gadget they have including smartphones and PDAs.
To achieve the most out of your Software purchase, you should choose a proper SaaS company to get the maximum benefit. Fortunately, this procedure can be simplified by looking at several different Software providers to decide on the one that supplies the features that will assist your business flourish.
Before you choose a Software provider, consider several elements that will impact the long-term cost of your SaaS purchases. For instance , you will want to check out the price every transaction or perhaps per usage. You should also consider if your chosen Software provider supports payment ideas, subscriptions, or discounts. In addition , you want to produce sure the software professional is certified and conforms with applicable industry requirements and laws.
You also wish to review the features of SaaS application providers to determine which features you need in order to properly manage your company. While you may not need everything included in a Software package, it can be helpful to know what additional features provides you with the most value in terms of support and maintenance. Finally, you want to check out pricing structures, and how they will benefit your company.
There are many benefits to SaaS programs, such as remote support and remote use of applications, helping to make them well-known in the business environment. However , only a few customers appreciate the full features of Software software.

Cloud Application Services (CAS)
SAP Cloud Application Services (CAS) offerings are optional and associates cost with it. CAS helps Customers run and manage the applications across SAP private cloud solutions, including hyperscaler, hybrid, and multi-cloud scenarios. It can cover SAP S/4HANA Cloud, private edition, SAP Business Technology Platform & SAP NetWeaver technology platform. It provides a wide range of services for managing business process and application logic, data layers, application security, software releases, performance, integrations, and more through a subscription. A customer can tailor the experience by selecting from the fixed-price, outcome-based packages. Refer this link for more details.
5. SAP Preferred Success
This offering provides continuous & advanced support for SAP Cloud Customers. Additionally, it can deliver an adoption strategy plan tailored to Customer’s exact business goals to help optimize the use of SAP software. The offering includes change management to help accelerate the transition to SAP S/4HANA Cloud, public & private editions. The expanded editions of SAP Preferred Success are currently available for SAP Ariba solutions, the SAP Commerce Cloud solution, the SAP SuccessFactors portfolio, and the SAP BTP portfolio. Please find more details in latest news and here. A short video explaining the offering is here.
6. Partner Learning & Support
a. TDD (Test, Demo & Development) system
For Partners to explore the SAP S/4HANA Cloud, public edition, SAP offers a TDD (Test, Demo & Development) system (License Material SKU – 8012331) under Non-Commercial Licensing (NCL). It consists of 4 Products/Systems as below:
- SAP S/4HANA Cloud – Partner Demo Customizing
- SAP S/4HANA Cloud – Partner Demo Development
- SAP Central Business Configuration – Test
- SAP Cloud ALM – Production
Apart from above 4, SAP Business Technology Platform (BTP) Global Account (GA) is also included with Work Zone & Landscape Portal entitlements. SAP BTP Cloud Identity Services (incl. IAS/IPS) are also provided via dedicated tenants (if not already there).
SAP Build Work Zone, standard edition enables organizations to create business sites that serve as a unified point of access to SAP, custom-built, and third party applications and extensions, both on the cloud and on premise.

Free trial phases, in which users can test functions for free, are not uncommon with the SaaS model. The duration of the test phase varies from 2 days to a few weeks.
With the pricing per user model, a monthly or annual fee is paid for each active user. The user can use the software with its full range of functions and independently of transactions and time. It rents the software and the associated services (bug fixes, patches, maintenance). Different gradations are possible here.
Price levels depending on the functional scope
With this price model, the prices depend on the range of functions.
Customers gain access to the application for a fixed subscription fee (usually monthly or yearly). There may also be gradations here: For a different price point, you get a different range of functions.
Pricing tiers based on amount of data used or storage space
With this pricing model, prices depend on the amount of data used or storage space. If the user reaches the limit of the price level they have chosen, it is usually possible to book an upgrade.
With freemium, the service provider provides a basic version for free. This is complemented by additional chargeable and bookable functions and services.
Conclusion: SaaS continues to grow in importance for businesses
The growing daily need for large amounts of data, always up-to-date software, backups and high data security requirements will continue to drive companies to increasingly outsource IT issues to specialist service providers. SaaS lets your business focus on what you do best. You don’t have to worry about infrastructure and hardware, you don’t have to set up a large IT department – and you can cut costs in the process.

You have access to a virtual server, storage, and an API, enabling you to migrate information to your allocated storage. From there, you can access, configure, and modify the VM and storage at your leisure. IaaS gives you the highest level of flexibility and control over your IT workloads.
Similar Articles: Complete Information 2
Platform as a Service (PaaS)
With PaaS, there is no need for you to manage the server infrastructure, storage, network, and databases. As an on-demand cloud environment, PaaS is designed to support the complete lifecycle of web applications: from development, testing, delivering, and managing, to updating of software applications.
After purchasing the resources from the service provider, you can access these tools and resources over the internet. It allows you to be more efficient in general cloud-based software development, simple cloud-based apps, and more sophisticated cloud-enabled enterprise applications. It also lets you manage the applications and services you develop while the cloud vendor manages the rest.
With PaaS, you can avoid the expense of buying software licenses, application infrastructure, middleware, container orchestrators, development tools, and other resources.
Click here for a closer look at some of the top PaaS providers of 2019.
Software as a Service (SaaS)
Unlike IaaS and PaaS, you receive completed cloud-based software applications that you can access over the internet. Web-based Software and products are provided via an on-demand service and usually through a subscription. The provider will host and manage all aspects of these software applications. The provider also handles the maintenance of the servers, operating systems, and elements such as software upgrades.
Microsoft, Salesforce, Oracle Cloud, and SAP are some of the leading SaaS providers.
Click here to have a look at some of the top business apps available.
Other Cloud Service Models
“Back-end” as a service (BaaS)
BaaS allows you to outsource all the back-end aspects of web or mobile applications. With this, you only need to write and maintain the frontend. BaaS supplies pre-written software such as user authentication, remote updating, database management, and push notifications. You also receive cloud storage and hosting.
Function as a service (FaaS)
FaaS is a cloud service that aids in serverless app development and management. Servers are hosted externally, allowing you to focus on programming and other tasks. FaaS only runs when conducting a function, setting it apart from other cloud-based computing models.

Here's an interesting data point: The companies now taking SaaS to the highest levels are consistently among the fastest-growing firms in the world.
Thanks in part to SaaS' ability to reach new bastions of IT that formerly were considered too sacred, SaaS revenues are expected to reach US$106 billion in 2016. This marks an increase of 21 percent over projected 2015 spending levels and a 30 percent compound annual growth rate, compared to a 5 percent growth for overall enterprise IT.
The conclusion is clear: It is time to stop believing your company's IT challenges are unique and that its needs for scalability and interoperability are exclusive. Truth be told, there's less that is unique and more that's in common among the majority of companies today.
Thanks to the increasing "lego-ization" of IT, the modular SaaS model is replacing the last bastions of custom-developed IT infrastructure, as a better way to allow businesses to grow.
This article originally ran in CRM Buyer on November 20, 2015.Impartner delivers the industry's most advanced SaaS-based Partner Relationship Management solution, helping companies worldwide manage their partner relationships and accelerate revenue and profitability through indirect sales channels. Impartner PRM is the industry's only turnkey solution that can deploy a world-class Partner Portal in as few as 30 days, using the company's highly engineered, three-step Velocity™ onboarding process. Watch Impartner's interactive demo here.

From small mom-and-pop businesses to global corporations, cloud computing is being used to streamline commercial operations while reducing overhead and other IT-related costs. According to some reports, the cloud computing services market will balloon to a whopping $180 billion by the end of the year.
While there are dozens of different types of cloud environments, each with their own characteristics, most cloud services can be broken down into one of three different categories: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).
Infrastructure as a Service
One of the three primary cloud computing services is Infrastructure as a Service (IaaS), which is characterized by the use of virtualized hardware. The Internet Engineering Task Force (IETF) describes IaaS as delivering virtual hardware services to clients by abstracting away its infrastructure details. An organization, for instance, may custom order a virtual server through IaaS. The IaaS provider then pulls the necessary hardware resources from various servers, delivering the virtualized components to the organization.
Examples of IaaS include the following:
Virtual data centers
Platform as a Service
Platform as a Service (PaaS) is typically used to run, test and develop applications while using the resources of cloud-based servers. Normally, the provider delivers a computing platform, including an operating system, program execution environment, database, etc. for the client to use. This allows the client to develop and run their applications within a controlled cloud environment without dealing with the technical hurdles and cost associated with purchasing the actual physical hardware.
Examples of PaaS include the following:
Software as a Service
At the very top of the cloud computing services hierarchy is Software as a Service (SaaS), also known as a”on-demand service.” In this service model, providers give users access to apps, programs, software and databases, all of which are stored on cloud-based servers. The provider is responsible for managing and maintaining the infrastructure used to run these applications.
SaaS has become increasingly popular due to the cost-savings that it offers. If a company needs 50 copies of a particular software, one for each of its 50 workers, it could purchase 50 physical copies. Alternatively, the company could purchase the software “as a service” for its 50-person workforce. Pricing models for SaaS will vary depending on the software and number of users, but organizations can expect to pay less for SaaS as opposed to other methods of delivery.

Pricing Models for SaaS Products
Pricing is probably the most crucial thing to figure out. But as with all important topics, it isn't easy to get it right. To help you figure I researched pricing for two days. Here are my learnings.
We even build a little tool that lets you compare different pricing scenarios. This way you can figure out which pricing is suitable for your business.
Different pricing models
The different pricing models I'll cover today aren't mutually exclusive. The most common practice is to combine multiple models together. This way you can build the right bundles for your customers. Something that's done pretty well by Hubspot. They combine users, features & freemiums into packages suitable for every customer. But now let's take a look at what pricing could be suitable for you:
Flat pricing is pretty straightforward. You pay X amount of money in a certain period. The most common are monthly and yearly. No hidden fees, no strings attached.
Pro: Transparency. The customer knows exactly what to expect. It, therefore, is pretty trustworthy.
Con: Regardless if a user uses your product 10x as often as another user both pay the same amount of money. Therefore some users will love it while it seems expensive to others.
User count is something often used by bigger SaaS companies offering products for entire teams. The logic behind it: The bigger the team the higher the revenue. Something that is the case more times than it’s not. There are two common approaches. Either every new user needs a new license or you go with the team-based approach. Having licences for up to 5 users, 10 users etc.
Pro: Every new customer can add growth to your MRR if they grow themselves. Having implemented the solution already they aren’t super likely to switch.
Con: Other builders might see this as an opportunity to attract customers with better pricing for their size. Also, every license-based SaaS has seen accounts with only one user that is actually 2 or more people. It can be an annoyance to teams with some users who barely have to use the software but still need an account.
Charging based on features is something for very diverse SaaS products. As with user count pricing models it’s often used by large players. Oftentimes you can see this by companies that essentially have multiple SaaS products stacked upon each other.

Software as a service is considered to be the IT market’s most prosperous branch. Forrester Research estimated an annual average market value growth of 56.2%. They also forecasted that, it will continue to grow at a rate of 18.9% per year by 2020.
It comes as no surprise the rapid expansion of the SaaS market. This type of business model has many benefits that attract new entrepreneurs to follow the very model of software distribution. On the other hand, companies are more willing to choose SaaS over on-site apps, as this solution is more beneficial and secure.
Software as a service (SaaS) is a software distribution model in which applications are hosted by a third-party provider and made available to customers on the Internet. In addition to infrastructure as a service (IaaS) and platform as a service (PaaS), SaaS is one of three main categories of cloud computing.
There are SaaS applications for basic business technologies such as email, sales management, customer relationship management (CRM), financial management, managing human resources (HRM), billing and collaboration. Salesforce, Oracle, SAP, Intuit and Microsoft are leading SaaS providers.
Now SaaS is clear to you, right? If not, please let us know in the comment section below.
When there is a need to choose which framework, technology, or programming language should be used during the development process, the development company makes the final decision in most cases and the customer relies on the experience and skills of the developer. But the software delivery model chosen affects both the customer and the developer as different models have different pros and cons and require different strategy for development.
SaaS eliminates the need for organizations to install and run apps on their own computers or data centers. This eliminates the cost of acquiring, supplying and maintaining hardware, as well as licensing, installing and supporting software. Other SaaS model benefits include:
Products supplied in the SaaS model can be easily adapted to the needs of specific customers. Most of these companies offer fixed subscription plans, but they also offer the option of changing settings and functionalities to more accurately meet customer needs. Price is, of course, settled individually according to a custom software. Moreover, many SaaS providers provide access to their APIs to allow you to integrate with existing systems.
As no license fee is required, there are no upfront costs related to purchasing a SaaS application. Customers are not required to purchase a complete product.

Become a Partner
Join the Modeliosoft Partners program and grow your business
Are you using Modelio actively, contributing to extensions of the tool or participating in the Modelio ecosystem? Or perhaps you're distributing your own tool that is coupled with Modelio? You should then be considering a partnership with Modeliosoft.
Modeliosoft is always on the lookout for new partners to help Modelio end-users successfully realize their projects using Modelio solutions. Among other benefits, a partner can:
- Provide services related to Modelio
- Sell modules that he has developed, and be referenced from the Modelio store
- Resell Modeliosoft's solutions, especially modules
- Receive support from Modeliosoft in customizing Modelio
By joining the Modeliosoft Partners program, you become a privileged contact for Modelio customers and can offer them a complete range of products and services.
Choose from three partnership levels:
- Expert: Modeliosoft Experts provide consulting and training on issues related to Modelio use and usage domains. Modeliosoft Experts will be referenced on the Modelio website, and Modelio customers will be invited to contact Modelio experts to get support and consulting.
- VAR or Reseller: Modeliosoft VARs and Resellers are authorized to include Modelio in their tooled or consulting solutions, and to resell Modeliosoft's distributions. Modeliosoft VARs and Resellers will be referenced on the Modeliosoft website.
- Certified Resellers: Modeliosoft Certified Resellers are authorized to include Modelio in their tool or consulting solutions, and to resell Modeliosoft's solutions. In addition, Modeliosoft Certified Resellers provide support and a hotline to their registered Modelio end-users. Modeliosoft Certified Resellers will be referenced on the Modeliosoft website.
To become a Modelio partner, please provide the following information:
Tell us who you are, what you’re interested in, how you would like to work with us and which partnership level you’re interested in. We look forward to hearing from you.

A product company selling the same amount each quarter doesn’t grow, while the SaaS company does.
If the SaaP company has the same sales each period, the company’s growth is zero. The SaaS company with the same sales continues to grow by the new ARR offset by churn. This results in the revenue from the SaaS model ultimately exceeding SaaP.
Revenue dominated by SaaS recurring revenue stream.
Paradoxically, in the scenario with rapid customer growth, the SaaP company will grow near-term revenue faster than the SaaS company because it is receiving all of its product revenue at the time of the sale. The SaaS company is deferring most of the revenue from new sales, however the company is growing its recurring revenue base which will yield long term revenue growth. The value of this recurring revenue will become apparent as growth slows and the value of the recurring revenue exceeds the value of new sales. The rapid building recurring revenue stream will payoff in higher future revenue for the SaaS company relative to the SaaP company as the rise in new customers slows.
The SaaS structural model of building new revenue on top of the existing recurring revenue yields higher long term revenue and growth potential.
The ratio of growth between SaaS and SaaP companies adding a large number of customers is lower during this high growth stage because the SaaS company is growing the future recurring revenue stream faster than it is growing its current revenue. As growth tapers, the ratio of revenue of the SaaS and SaaP company shifts dramatically to the SaaS company.
SaaS Expansion Revenue (discussed below) increases this ratio of SaaS growth to SaaP growth.
4. SaaS Companies have more Expansion Revenue
“25% of the revenue growth from SaaS companies with over $25m in annual revenue is from “Expansion Revenue.”
Pacific Crest Survey 2014
SaaS companies perfected the “Land and Expand” strategy. The nature of SaaS reduces the “Time to Value” with shorter implementation times and the ease of expanding existing customers adding to revenue growth.
There are fewer barriers to selling SaaS since there is less fear of lock-in to an expensive, complex, and difficult to install software. Once a SaaS company has a foothold in a company, it is easier to expand generating more revenue growth than for SaaP.

We might move away from the traditional systems integrators and you might see more business-service providers focusing on supporting the customers. The ISVs are actually building some of the components that are used, but they aren’t necessarily going to be the service providers.
Colleen, I wonder if you could put on your analyst hat again for a minute and try to forecast how that market might shake out.
Smith: I think the SaaS market, in general, is really still in its nascency, and there are a lot of things that have yet to happen. But, the good news is this isn’t just a fad. We see a fundamental change in terms of the business model.
What I say a lot is that if we think in terms of the software industry over the last 20 years, we’ve come a long way in terms of building partnerships, and in terms of how systems integrators and service providers work with ISVs. What I see being the success of SaaS is that if we continue to enhance that model, it's going to be about hosting providers, working more closely with system integrators and ISVs. The only way that the end customer is going to win in this is if we get into a business model where there is that shared risk and shared reward, but the customer pays for only what they need to use.
It's going to come down to pricing models. It still has to come down to some building of ecosystems out there, where everybody knows their role and plays that role, but doesn’t necessarily try to do the other person’s role. There are still a lot of things happening.
I believe it’s going to be vertically focused. I don’t think this is going to be a horizontal play. We’ve seen a lot of success in vertical business expertise. There's going to be content, business applications, data, and services. If all of those can be offered in a single environment through a single service provider, the customer will end up winning.
Smith: Absolutely. We’ve always worked with a lot of our partners and told them, "Figure out where your niche is, and, if you can be the best at your niche, you can be successful." We aren’t necessarily talking about creating the next SAP, but if you can be really successful within your specific niche area, then your customers are going to value your service.
In the SaaS model, there are two S's.

Let's look at some examples.
In the email marketing space, we have multiple companies valued at $1B+: Marketo, HubSpot, and Mailchimp.
When you strip away all the outer layers, they all have essentially the same core product — a tool that lets you send and automate emails to your customers and audience.
Their market is the enterprise. As a result they've differentiated their product on the things that enterprise customers care about: customization, security, and scale (that's their Market Product Fit).
Because of that, they use Outbound Sales to sell (Product Channel Fit). Because they use Outbound Sales they must have High ACV's to support the channel (Channel Model Fit). There are thousands of customers in the enterprise space times their ACV's equal a greater than $100M revenue business (Model Market Fit).
Their market is the mid-market. As a result they've differentiated their product on “All In One” since thats what mid-market customers care about.
Since the product still requires a fair amount of setup and education to work they use Inbound Sales (Content) and Channel Partnerships (Product Channel Fit). Because those channels hit a medium CAC, they have medium ACVs to support the channel (Channel Model Fit). There are hundreds of thousands of mid-market customers, multiplied by their ACV ends up being $100M+ revenue business (Model Market Fit).
Their market are small businesses. As a result they've differentiated their product on being simple and touchless (Market Product Fit).
Because their product is focused on simplicity and touchless they can use virality via the free tier as the primary acquisition channel (Product Channel Fit). Because their channel is virality they use a freemium model with lower price points to have low enough friction (Channel Product Fit). There are millions of small businesses so even at the low ACV, they have a far greater than $100M business (Model Market Fit).
We can play this scenario out in almost any SaaS Category. Let's take a look at a few more examples.
As you can see, no company (that I know of) has ever dominated all three tiers of the market (however, LinkedIn and Slack might be the closest).
The reason for that, again, is the four Fits. All four Fits are like the pieces of a puzzle. Plenty of enterprise companies have tried to move down market by making small changes to their pricing or product.

Companies have time and time again fallen apart trying to manage high administrative costs and the complexities of controlling customer and channel partner relations without a management system or with one developed “in house”. SaaS has therefore, proven to be a big leap forward for both providers and consumers.
Providers: Companies are increasingly taking advantage of the benefits of cloud computing, such as the reduction of infrastructural costs, scalability and adaptability, a better quality of service in less time and the security of data being stored in a safe environment. Following the “as a Service” model guarantees the flexibility and efficiency that companies need, offering a strong competitive advantage.
Consumers: SaaS has effectively commoditized IT functions which used to be really complex and expensive, making them accessible at a lower cost. Website analytics are a good example of advanced capabilities which have been democratized. To put it simply, SaaS simplifies, reducing cost, time and resources for the consumer.
There is however, a widely circulated myth is in the midst of the great SaaS boom: that Software as a Service has almost eradicated the need for channel partners and channel partner programs.
SaaS vendors are not using channel partners (SIs) or Value Added Resellers (VARs) very much. In fact they account for only 35-45% of SaaS provider revenue which is significantly less than the percentage for on-premises software. Only 23% of B2B SaaS vendors have a channel program, while 80% of on-premises software vendors do.
The main reasons for the shift away from channel partners are:
- configurations tend to be made by customers, when in the past, because of their complexity, they would have been made by channel partners
- development, installation and upgrades used to be performed by VARs but are now done centrally by the service provider
- SaaS companies are only beginning to take their first steps, so haven’t gotten round to implementing a channel program
- Channel programs are much more necessary when it comes to international sales and as most SaaS companies are quite young, they’ve rarely expanded into the global market
The as-a-service model has essentially changed the role and value-added status of channel partners, meaning they now need to work more strategically than ever before. To find out exactly how partners can adapt to SaaS, what has been making them reluctant, and the ins and outs of what the revolution entails, download our Guide now!

Last week I had the opportunity to present the first half of a teleconference on contract lifecycle management (CLM) hosted by the Institute of Supply Management (ISM) and Zycus. You should be able to view the recording in its entirety within a week or so here. It was a good session covering the basics of CLM as well as some specific best practices so I recommend taking a look. As part of the presentation we polled the listeners on a few key questions and I'd like to share the results as well as some insights.
For those of you unable to attend, I will summarize some of the content that I presented on SAP’s overall growth and innovation strategy. SAP has a double-barreled product strategy focused on Growth and Innovation.
The Growth strategy rests heavily on the current Business Suite, which includes the core ERP product that is used by approximately 30,000 companies worldwide. SAP claims that it touches 60 percent of the world’s business transactions, which is hard to validate but not all that hard to believe. The main revenue source today is Support, which comprises 50% of the total revenues of the company at more than 5 billion Euros annually, and it grew by 15% in 2009. Other growth engines include:
NetSuite, a leading SaaS ERP/CRM provider, recently announced that it is revamping its channel partner comp model: 100% on Y1 subscription revenue, and 10% thereafter. VARs have been remiss in taking up the SaaS torch, largely because most SaaS vendors haven’t provided a financial model conducive to VARs’ cash flow requirements. Per the on-premise license model, channel partners make a big portion of their nut on initial product margin, i.e., up front. But vendor SaaS economics minimize up-front remuneration and spread revenue out over a long period of time. Though it sacrifices year-one revenue, NetSuite’s 100/10 model more closely mirrors VARs’ accounting practices.
NetSuite’s model will be the first of many SaaS channel model “experiments” that will ultimately be a shot in the arm for the SMB market in particular.

He distributed the letter through the computer magazines of the day and started to put in place his strategy for selling software licenses. Microsoft followed the model of selling software that would work on personal computers made by other vendors and their licenses would need to be paid for.
Event #3 – Larry Ellison meeting with Evan Goldberg and Marc Benioff
In the late 1990s Larry Ellison was discussing the future of computing with Evan Goldberg and Marc Benioff. The internet was gaining popularity and all three were contemplating the impact this would have on business software. The discussion focussed on what has become known as cloud computing and how this would change the face of software. Business Insider magazine pinpoints this discussion as the invention of cloud computing and the SaaS business model. Evan Goldberg went on to found Netsuite and Marc Benioff started Salesforce.com, the rest is history.
Differences between SaaS and Application Service Provision (ASP)
Mention SaaS and often someone will say “I remember when it was called ASP”. It is true that both models bear similarities but subtle differences apply which mean they are entirely different technologies. To manage SaaS effectively it is essential to understand the differences and how both models can be applied to cloud computing. The following chart gives a concise comparison of the key differences:
• Hosts 3rd party software
• Client server model – often needs a component on a client device
• Separate instances
• Separate updates/maintenance for each user organization
• Increased costs to scale due to separate implementations
• Similar cost structure to onsite
• License focused
• ISVs host their own software
• Nothing to install on client devices (web access)
• All user organizations on the same version
• Economies of scale as only one version to maintain
• Reduce operating costs
• Subscription focused
Some pundits describe ASP as a failed business model because essentially the same costs and technology fundamentals apply to ASP and onsite deployments whereas SaaS provide a radically new way of working due to the economies of scale achieved from the one implementation can be used across many user organizations. In effect this is as radical as the invention of the first software compiler by Grace Hopper back in 1952.
SaaS Management vs Traditional SAM
Market research (IDC) estimates reveal that the SaaS market is growing at a CAGR of 18% year on year, whereas tradition licensing is experiencing a gradual decline.

As with most SaaS offerings, functionality of their software increases as you upgrade your membership to higher tiers. With Evernote, some of those added features include the ability to clip emails, additional gigabytes of space for larger uploads, secondary passcode security features, and backwards note history allowing you to see previous versions of your edited notes.
Needless to say, having all this power accessible through your web browser is something that was hard to conceive of just a decade ago.
Another great example of SaaS is Venngage. Unique in their offering, Venngage allows users to create professional looking infographics with ease, right in your web browser. Like Evernote, they offer a free option. However, their premium tier offers additional functionality with export features, more templates to work with or modify, and a large number of art assets and vector-based icons to build your custom infographics with.
An infographic later on in this article was actually created using Venngage, after just a short amount of time spent tinkering around.
Dig a bit deeper and you’ll find you’ve been using SaaS services for quite some time. Internet titans such as YouTube—especially with the advent of YouTube Red—qualify under our general definition. Red makes it possible to watch as many YouTube videos as you please, ad free … legitimately.
Of course, ad-blocking software (yet another form of SaaS) enables ad-free viewing, but often at the expense of advertisers and content creators that depend on ad revenue streams. Red is YouTube’s solution to the sea of users adopting ad-blockers.
We don’t have to stop at online videos. This very article is being created using a SaaS product, provided by a little company called Google. More specifically, Google’s online word processor “Docs” is offered among an entire suite of freemium tools.
That’s just a few examples of how these services can manifest. It’s quite clear that SaaS has become a necessity for business and leisure, and it’s here to stay, forming an entire new breed of entrepreneurship.
Being an enterprising individual, let’s say you assemble a crack team of developers, get a groundbreaking SaaS developed, and build a large amount of buzz around your product. How do you then price your creation?
Enter the “Good, Better, Best” price model.