Still room for partners, internal IT resources in SaaS channel

There is little doubt that software as a service (SaaS) will play a massive part in future computing by providing organisations with cost-effective access to specifically required services, assisting them to improve efficiency and reduce expenses, says Guy Jelley, CEO of Post Vision Technology.

However, with businesses able to obtain the software directly from the vendor, many CIOs, IT managers and channel resellers are left wondering what their future role would be.

"Internally, companies are starting to realise that SaaS is not a threat, but rather reduces the burden on internal IT resources," says Jelley. "As opposed to managing all IT services for a business, SaaS eliminates the internal dependency on infrastructure, hardware, backup, DR and maintenance, enabling CIOs and IT managers to play a more strategic role."

A recent survey conducted by THINKstrategies, in conjunction with Cutter Consortium, found that customer adoption of SaaS has grown from 32% in 2007 to 63% in 2008, with satisfaction, renewal and referral rates exceeding 90%. "This is a result that you won't get when surveying most internal IT departments," he says.

"When looking at the role of resellers in the SaaS business, some people believe that the channel model is dead, with no place for reseller partners. Several SaaS providers, especially foreign competitors without local representation, do not follow a channel model, but instead publish their prices and allow users to sign up directly on the Web for the service.

"On the other hand, some say that SaaS is no different from other channel offerings and that the role of reseller is to provide representation, implementation skills, training and support," Jelley explains. "It is not just about selling with a mark-up; resellers will need to differentiate themselves in the market in terms of value-added services such as configuring the software for a specific industry or purpose."

Clients also still want personal interaction with someone who can explain the product plus provide training and support. An informal survey among Post Vision Technology's customers showed that the majority would rather receive facilitator-driven training than opting for online-based training.

Post Vision Technology has developed a Web-based software tool, PPO (Project Portfolio Office), which follows the on-demand/SaaS model in providing organisations and individuals access to the application on a hosted and rental basis over the Internet. The company has also implemented a partner programme and doesn't sell directly to the market.

Says Jelley: "The main reason behind our decision was to ensure local support and implementation resources for customers across the country and globally. An important factor was the industry and domain experience that resellers bring to the table - they are able to implement the product according to specific industry requirements to the benefit of the client. Furthermore, the PPO tool aligns well with our partners' businesses in the sense that they use the same product that they sell to their customers.

"Ultimately, the choice lies with the vendor, who has to decide whether to sell direct or through channel partners. It is a strategic decision and depends on the service offered and target market."