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Should SaaS vendors work together?

3 min read By October 3, 2022 October 28th, 2022 No Comments

The exponential growth of Channel partnerships in SaaS

Is it time to say “move over hardware”?

Think of a hardware vendor that sells or markets through the channel and anyone can name dozens. Logitech, Barco, and Lenovo to name a few. But with SaaS companies growing (over 25,000 number in 2022 and worth approximately $172 billion) channel partners for SaaS and Cloud-based services are becoming ever more important.

Ten years ago, people would have flinched at the idea that channel partnerships could work for SaaS and Cloud-based vendors. If you can simply visit a website, enter your credit card details and get the product, why would you need channel partners to sell through?

Many SaaS companies still think like that. It’s a debate that rages on high. The excuse of many a SaaS company: “Our cost base is easy. We don’t have any margin away. We can just contract directly.”

The US-centric approach to SaaS 

And this is true for many companies based in the US. There is one currency, one framework, and one law. If you plan to remain within the borders, it’s easy to manage and deploy in a scalable way.

But for those wanting to break out into somewhere like Europe, things can get a little more complex. Because the law in Germany is very different from that in the UK, as is the language, the taxes, and the relationships. 

Should SaaS providers work together to simplify technology purchases?

Will there be a coalition of SaaS providers to simplify technology purchases? This is where the value of the channel comes in. Because in channel, it’s all about the relationship with end-users. The ones with the best relationships will win. And who has better relationships with end-users than channel partners? 

In channel, this means that simplified purchase flows will lead to higher technology sales for those channel partners with good relationships. And as with any 80/20 rule, that rule will become more and more extreme over time as the winners continue to win. 

Will IT companies dominate the channel?

It’s a trend that we see continuing over the next 10 years. We’ve seen IT businesses be able to dominate in networking, security, communication, and collaboration.

Not to mention the fact that partners can work together to offer end-users complete solutions. For instance combinations of software by one partner, complete integration with current end-user systems, and continuing service by another.

The pools are getting wider and wider and wider as vendors like Microsoft are able to hit more and more of those verticals. Partners that have those key relationships in SMEs, mid-market, and enterprises are ultimately going to win.

If we look at partners, they have a current customer base and they want to maximize the value they bring to that customer base. But they also want to increase their own revenue.

SaaS vendors – and vendors in general – should be able to really tie that together. That’s where you’ll really win together.

 

In the first episode of Partnerships Unraveled we discuss whether SaaS and Cloud will take over channel, how to avoid channel congestion, Brand vs Technology deals and much more! Listen below or head over to Partnerships Unraveled to listen through your preferred steaming service.

Cassandra Pizzey

Cassandra Pizzey

A Channexteer since 2021, Cassandra has been copywriting for the past 10-years, broadening her horizon as content marketer since entering the B2B SaaS industry. Connect with Cassandra on LinkedIn for more.

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