Target SMB: Interest in SaaS Growing

By Steve Hilton Comments

Steve HiltonThe Fall 2010 Channel Partners Conference & Expo was a great success. Besides all the meetings and falderal, I had the honor to moderate a panel on software as a service: SaaS Sales 101. Joining me on the panel were Cary Bush, sales director for Logista ; Robert Bye, executive vice president of nGenX; and Jim Safran, president of GreenAppX. The audience asked some great questions. I answered the easy ones and let the panelists take the tough ones. Let me share with you some of the highlights.

Analysys Mason forecasts a $6.6 billion North American business-to-business SaaS opportunity by 2015. (See chart, North American Enterprise Saas Revenue by Sales Channel, below.) That’s a 20 percent average compound annual growth rate between 2010 and 2015. And even more striking is that the registered IT partner channel by 2015 will sell 41 percent of that SaaS opportunity, compared to 39 percent directly sold by vendors and 20 percent sold directly by carriers. In 2010, we forecast that registered IT partners only sell 24 percent of the North American SaaS revenue.

What is SaaS? Well, fortunately we’re all a lot more familiar with SaaS now than three years ago when I moderated my first SaaS panel at this conference. SaaS is an application delivered to the customers’ premises and end-user devices over the Internet. All the “smarts" of a SaaS solution are in the cloud — hosted in a provider’s enterprise-grade data center. SaaS pricing is variable, usually priced as a monthly recurring charge similar to telecommunication services. And the community of SaaS users has the ability — to some extent — to improve the product by providing feedback to the SaaS supplier.

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