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By Hank Barnes
As a result, the SMB customer, who has been an early adopter of SaaS due to the affordability, is left in the cold. They get second class support. One customer of a major SaaS provider talked about how they always spoke with someone new when requesting support. Each time it was like starting over, explaining their business, how they were using the software, and their problem. SMBs often feel like an unappreciated stepchild in these circumstances.
For the SaaS market to thrive, the SMB needs to be embraced as a key market for SaaS solutions. This requires that SaaS vendors use an alternative distribution strategy—leveraging channels. The local and regional solution providers benefit from this approach as they can continue to be involved as trusted advisors to their SMB customers, while gaining recurring revenue stream (something many solution providers desperately need) from their share of SaaS subscriptions.
The SMB customer benefits by getting local service and support from someone who truly cares about their business and has a cost structure that makes providing that support good for business. The SaaS vendor benefit in that they can gain, and keep, traction in the SMB market and not be forced to move upstream to enterprise deals because of cost challenges.
When SaaS vendors allow for channel partners to use their application for marketing by co-branding and white labeling the solution, the SMB feels that they are receiving a local solution that is supported because the name and logo of their partner is directly on the software. In fact, a call center application vendor named Visitar provides SaaS software only through the channel and priced exclusively for the SMB – Visitar’s hosted application is co-branded and white labeled by channel partners so as to give the SMB the most localized feel.
The SaaS market opportunity and the realities of cost structures for technology providers is yet another indicator that solution provider channels are here to stay. When the Internet and e-commerce first appeared, many pundits stated that the days of the solution provider channel were numbered. That was wrong. What is right is that solution providers must add value by serving as trusted advisors and affordable providers of local support and service to their SMB customers. When this occurs, everyone wins—the customer, the solution provider, and the vendor.
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