Leveraging the Channel: Getting SaaS-y in the Cloud

Mike ChaseBy Mike Chase

Delivering value, trusted adviser, solutions provider — all great words and concepts, but not always easy to achieve thanks to an ever swirling technology landscape that abounds with cloud, on-premises environments, do-it-yourselfers, and non-interoperable software/hardware — all while demanding an ever-increasing crush of expertise that can leave even a relatively savvy technologist up to their neck in a pile of “Fill-in-the-Blank for Dummies” books. VARs, MSPs, CSPs and distributors are all asking the same thing: How do I stay relevant?

No SaaS Appeal

Software-as-a-service (SaaS) hasn’t been very appealing thus far to the channel because it has largely excluded them. Back in the day, you’d sell your customer some software and not only make a profit but land 10 times more business in the hardware, professional services and ongoing support/maintenance that it generated. Now many SaaS companies run their software from the cloud and eliminate the channel. While this approach has huge price and convenience benefits to the customer, it fails to realize the inherent value the channel brings. Fortunately, there’s a better way.

Beware of aaSholes

Software vendors who went SaaS weren’t the only ones who ignored the value of the channel — CSPs largely ignored the channel too. In the end, everyone paid the price. The SaaS vendors really didn’t know how to run a cloud, and even the largest CSPs couldn’t duplicate the reach, support and value-add of the channel. So, for the last several years the blame game ran amuck.  Channel ganged up with CIOs to declare “private cloud” as a way to keep SaaS and CSPs at bay by using a lot of FUD (fear, uncertainty, and doubt), while SaaS companies refused to let their software run on any clouds but their own. At the same time, CSPs commanded their army of programmers to create competing solutions, which could be easily hosted on the CSPs’ ever expanding global platforms. In the end, no one really won, especially the customer who often had convenience and cheap pricing, but sacrificed having interoperable solutions, personalized support and the ability to leverage mixed environments.

SaaS, Cloud and the Channel Combine Forces

But times do change. Software vendors are turning cloud friendly. Great examples of this are Egnyte’s Storage Connect and Veeam’s Cloud Connect — both products can be hosted and licensed monthly by CSPs who sign up. In turn, CSPs are leveraging the channel and paying much higher commissions in order to reach more customers using existing relationships that only the channel can bring, eliminating Tier 1 and 2 support in favor of channel partners taking those initial calls, and overcoming local language/customer barriers as CSPs expand their global platforms.

In turn, the channel has reported seeing professional service revenues increase by 20+ percent. How?  The channel is creating all the same solutions they always have for customers, but doing it faster and cheaper in the cloud — without any metropolitan traffic jams to contend with as engineers struggle to get “on-site” with customers (time they couldn’t previously bill for).

Channel partners create managed service offerings (which run better from the independent cloud than the enterprise it’s trying to monitor), perform a wide range of Microsoft and Linux services on servers running in the cloud (patching, tuning, troubleshooting, etc.), as well as managing customer security (virtual firewalls, load balancers and other appliances) in the cloud. With some clouds, channel partners are also able to take the first call from the customer and get a generous slice of the cloud revenue for their assistance, not to mention referrals which add to their customer base when opportunities arise that aren’t directly provided by the CSP.

One last area of cloud/channel cooperation is data migrations to the cloud.  Someone has to go on-site and figure out how to get there from here and the channel steps up. Ah, peace at last.   

Isn’t it nice when we all play well with others? Viva la channel!

Mike L. Chase, J.D., also known as “Dr. Cloud,” is executive vice president and CTO of dincloud, a cloud service provider and transformation company that helps businesses and public/private organizations rapidly migrate to the cloud through the hosting of servers, desktops, storage, and other cloud services via its strong channel base of VARs and MSPs.

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