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Indeed, 43 percent of respondents to the CompTIA study cite customer demand as the primary driver be- hind their decision to add SaaS to their portfolios. In- creased demand is due in part to the fact that corporate end users from all lines of business have grown more and more familiar with SaaS solutions. They have dis- covered that, unlike packaged software the IT depart- ment deploys, their favorite cloud-based CRM or collab- oration tools can be self-provisioned at the quick click of a button from the internet. The self-service phenom- enon does provide a challenge for the channel. But it's one that can be mitigated and, in fact, taken advantage of in many cases. Just because a customer can or does type in a credit card number to buy a SaaS application on their own does not mean that they understand how to scale, integrate, customize, and secure said solutions. That's where the channel can – and should – come in. Among the other drivers behind the channel's decision to offer SaaS is the continued desire to generate recurring revenue, which is also a prime catalyst behind the transi- tion from traditional reselling to managed services. For some traditional solutions providers, SaaS adoption has been the means to becoming an MSP; for those already in the MSP business, SaaS serves as one of the most popular new additions to an existing services catalog. One of the SaaS model's other chief attractions is how it is delivered, often quickly and dynamically. Thirty-six percent of channel firms cited faster time to deploy- ment as a main reason they are now offering SaaS to their customers. Customers want speed and efficien- cy associated with any type of purchase they make, whether that's software or a new car. For the channel, the promise of smooth onboarding of technology tools into a business is often music to a customer's ears. S and economic models of SaaS. Translation: How do we make money? What are other challenging factors? Many ISVs in the SaaS space are unfamiliar with the traditional indirect channel, which means they may lack a formal partner program and indirect sales strategy or are in the na- scent phases of developing one. Partner compensation models are still in the tinkering stages. These things take time. WHY SAAS IN THE CHANNEL? But SaaS is here to stay in the channel and the model is clearly becoming one of the more popular cloud-based options in the industry. What exactly constitutes SaaS? In its broadest defi- nition, SaaS is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the internet. We are talking about applications from software giants such as Microsoft or Google and also an ecosystem of small ISVs that have developed solutions often highly specif- ic to a particular industry. These smaller ISVs might be hosting the applications in their own cloud-based data center or with one of the major public cloud providers such as Amazon. The benefits of the SaaS model are many, according to both its users and purveyors. The perks include flexible payment methods, such as pay-as-you-go, easy scalabil- ity, automatic software updating for things like patch management and application upgrades, and accessi- bility from any user device. Many of these upsides are driving today's spike in customer demand. In turn, that demand – among other reasons – is pushing channel firms into the SaaS world. TOP DEMAND DRIVERS PROPELLING CHANNEL PARTNERS INTO THE SAAS MARKET SOURCE: CompTIA Customer Demand Recurring Revenue Faster Time To Deployment More Services Opportunites SaaS One Piece Of Overall Cloud Transition Traditional Software Sales Declining Competitive Pressure Vertical Opportunities Started Out SaaS-Based 43% 36% 36% 31% 30% 30% 29% 28% 24% 0 40 30 20 10 50 33 SOFTWAREEXECUTIVEMAG.COM OCTOBER/NOVEMBER 2017

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