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How to create and make money on SaaS (Part 3 / sales through a partner channel, which may not be needed)

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Where to go and how others?


I'll start in the forehead - whether or not to sell SaaS through partners is a difficult question. On the one hand, SaaS itself is diverse - from systemic to applied, solving business problems and a pool of potential partners for their sales is very wide - from cloud providers to business consultants (business lines, subject areas). On the other hand, there is the illusion of an independent service life on the Internet, in which there is no place for intermediaries.
The complexity of the partnership issue is fueled by the policies of the leading vendors, who are usually oriented on. Leaders have recently taken different positions with respect to partners - Microsoft is building its cloud services - O365, Outlook.com, moving to direct sales, and Google, on the contrary, “wooing” Russian integrators.

In general, the decision to work through a partner channel depends on many factors - the niche of the decision, its cost, the mass of potential partners in the market, the strategies of competitors, and the will of the company's management. To reduce uncertainty and make the right decisions on the issue, I suggest analyzing the theory, getting expert opinions and looking at the practices.

Theory and hypotheses

There is an opinion that SaaS service is more convenient to place in your cloud and begin to actively promote offline and the Internet. The consequence is that the service will start selling itself and everyone is happy. Affiliate channel in the web is not needed - we also sell on the Internet.
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Practice - expert opinions

Mikhail Tokovinin , CEO amoCRM : it does not work!
“It is very unlikely to fly, let's say. Affiliate programs work well if they create additional value or offer a more comprehensive product. These are either implementation consultants or the integration of services with each other. These are the commonplace resellers, even with very accurate positioning, they give poor results (there are already so many of them, all one). ”

Mikhail Kozlov , market expert * aaS: it works!
“In principle, my opinion is known. If the average check from a customer is less than several tens of thousands of dollars a year, then the direct sales model will not allow the business to scale to serious volumes (tens and hundreds of millions). Those. without partners and channels - nowhere. Selling b2b Haas from the point of view of delivering value to the customer is almost no different from selling traditional corporate IT. But it is very different from the sale of voice subscription services (therefore, I do not believe in the sale of clouds through opsos). Those. for the most part, this is not boxing, but presale, selling solutions, integration, software, consulting. ”

Askar Rakhimberdiev , CEO Moysklad : it is not yet clear!
“The traditional partnership model in SaaS works poorly. Why do users generally choose clouds? Three reasons: online, simplicity, cost reduction. Online gives the developer to independently sell his product globally, without reference to the region - the value of local partners decreases. Cloud services are simpler - it means that the need for training and implementation (as partners usually do) decreases. Cloud services are cheaper - if you divide the revenue between a partner and a developer, it may not be enough for two. ”

Does this mean that partnership in SaaS will never work? No, but some new model will be successful.

Alexey Ailarov CEO Zingaya : it works with creak!
“The significant problems of the SaaS affiliate program are in my opinion related to the fact that the products are quite cheap, and therefore it is difficult to give a lot of money to the channel. Because of this, the channel is not very interesting, especially since the resale of SaaS must be strained. From more or less successful affiliate programs, I can only remember Salesforce, but there’s not even SaaS, but a whole platform with a bunch of customers, so there it looks and works differently. ”

Opinions of experts confirm that it is necessary to carefully weigh the pros and cons when choosing a partner strategy and building a partner channel.

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Discussion affiliate one startup

Quickme practice - reasons why we work with partners

In our practice, we made a decision to build a partner channel and this is why:

- Quickme is currently a more infrastructure solution (Business Mail and File Storage) or BPaaS (Business Process as a Service) and “closes” user needs for communications. In the market, there are enough companies that are providers of such services — that is, the number of potential partners is enough to find like-minded people among them who believe in a product. In particular, we observed a clear increase in the number of cloud providers.
- It is possible to bet on classic hosting providers. Interestingly, in Russia, leading free mail services occupy far from the lion’s share of the mail market for domains (statistics before the launch of Business Mail from mail.ru). As a result, you can go to the second third echelon of such companies and discuss affiliate program with them.
- Quickme is a startup and we have insignificant budgets for promotion, which is simply not enough to quickly create a recognizable local brand and to attract partners is cheaper.
- We have established contacts with system integrators from TOP-10, with whom we can enter the market of large companies and government agencies.
- We see the development of technology platforms for cloud providers that “know how” to integrate and sell SaaS, for example from Parallels. Jelastic, ISP and see in them a way to "reach out" to the leading providers.
- The product is simple and for its sales it is not necessary to attract the resources of the partner’s sales department.

For ourselves, we understood that partners are additional value for us and received:
- Client partner databases
- Providing the best SLA and infrastructure.
- Trust in partners from large business.
- Potentially large / expensive project tasks / money.

And we see the disadvantages of working with partners:
- Resource efforts to create a partner network are significant, but they are predictable (20% of partners work in the absence of their incentives).
- Results are unpredictable - there are very few independent company management tools.
- In the context of a startup, few people want to deal with an unknown brand and a new product - there is simply no confidence in it.
- The cost of SaaS services is small and not always ARPU from the client will suit the partner. In our case, this is 100 rubles per mailbox or 250 for all services.

That is, the case of Quickme to work through the affiliate channel turned out to be profitable - there are obviously more pluses than minuses.

Partnership programs


Affiliate programs are the key direction of building work with a partner channel, which determines financial conditions of work, competency requirements, levels of participation and ways to support partners.

Theory and hypotheses

SaaS Partner can be: reseller, consulting (specialist in the domain of the solution), integrators (in the context of adapting the service to the requirements of the client). When working with potential partners, I apply in my practice - the BCG Matrix projecting it onto partners. A very interesting tool in assessing potential partners, which helps to understand the effectiveness of working with them. After superficial work with the tool, I will never go with a startup in Softline (“cash cow”) - I don’t want to be the 5000th decision in their product line and it’s hard to talk to people with a halo. The versatility of BCG is that it clearly shows that the partner company must want something - to develop business, use technology, be interested in the development of new directions. An example with whom I like is https://business-host.ru/ an obvious “difficult child” and Business Mail will perfectly complement the partner’s pool of services.

Practice

We develop several vectors of relationships with partners. Quickme resellers are classic, hosting providers, cloud providers, system integrators, virtual integrators, market place SaaS services (similar to the SaaS App Store). Incomplete list of partners We give away 50 percent of the cost per license. There was a practice when they paid and 90 invested in the channel that “fired”. Technology partners are Parallels, ISP, talking to Jelastic Bitrix 24 Market Place and Zingaya. This category either allows integration with resellers, or supplements / implements / improves the functionality of the application. In fact, we successfully go through the technology partnership to the first category of partners. In the second category can be attributed, and infrastructure partners - this is the case when someone's SLA is better than yours. From the point of view of compliance with SaaS canons, we are for creating installations on the side of a partner (the practice of SaaS is one multi-tenant version of the product) - as a result, support becomes more expensive, but we get much more. Partners “from the subject area” (consultants, consulting specialists) - no (due to the lack of the subject area of ​​business automation), partners represented by public organizations for SMB (OPORA) - no - we do not believe.

Economy of work with partners (anything for money)


Theory and hypotheses

The economics of working the company's money and I could not get round this important issue. The key points to which it is worth paying for when forming pricing policies in working with partners are the license price and the discount provided

1. Cost. The larger the SaaS check, the more comfortable it is to discuss working conditions with a partner, provided that the ARPU from your solution is about the same with the same indicator from the current customer base. An example - with a check of 100 rubles for a license, I can talk to a full-time or hoster providers and all parties will be comfortable. A strong minus of SaaS - a low average check excludes partner management tools - compensation for marketing activities or additional vendor motivation.
2. Discount. The important question is what kind of discount "not sorry" for a partner and why pay it. Discount partner you pay for
- indirect marketing.
- customer base of the partner.
is his loyalty to you.

Practice

We give 50% of the cost of the license Quickme to the partner and we consider such a percentage to be quite justified. Of the pitfalls, the presence in the line of free versions and you should not risk with Freemium - it does not sell through partners, unless it is open source or a platform, like Salesforce, on which you can earn a partner. The experience of abandoning such a pricing scheme was described in a previous article by colleagues from Copiny. Although, in our case, we risk - we are ready to give mailboxes and pricing for file storage to the partners ’side - the first will probably lead to UPSELL for a collaborative solution, the second will increase loyalty to partners.

What to do?


We see the magnificent experience of a respected 1C company that has managed to build a partner network of 10,000 companies (both operating in the SaaS segment), we see the excellent practice of Salesforce partner solutions and my personal opinion - nothing prevents the SaaS services developers from following the path of building a partner channel and who doubt, write and help. An incomplete pool of our partners is here and we are pleased that the partnership is bearing fruit.

In March 2014, we launched our first Quickme Sfera 2014 affiliate program and are confident of its success!


Alexey Kalachnikov
Quickme.ru is a cloud-based business email service for providers.

Blog author http://www.bootstrap24.ru/

Materials series "How to create and earn on SaaS"

Source: https://habr.com/ru/post/217281/

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