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Partners In SaaS – Building A SaaS Channel

 

Originally published by VSR Magazine, by Lisa Terry

A good partnership is a good partnership. But because it’s most often based on a recurring revenue model, the relationship between a software-as-a-service (SaaS) provider and a solution provider is a little bit different than traditional arrangements based on licenses and up-front compensation.

For one, often these relationships are newer, because the delivery model has only become widespread in recent years. Every day new SaaS companies are joining a relatively young stable of developers, and just a small portion of this group recognize the value of the channel and fully embrace it with a 100% indirect sales model.

In addition, revenue for the solution provider doesn’t come all up front. So it’s prudent to stay close for the duration of the deal.

“There is an inherent incentive for the reseller to stay up to date with the client,” says Alexandre Nemetz-Sinchein, channel development manager for Clio (www.clio.com), a cloud-based practice management software solution.

“You’re in constant contact with the vendor,” agrees Kirk Lesser, CEO of MSP Renascence IT (www.renitconsulting.com). “It’s a little more intimate than the typical vendor-reseller relationship.”

We asked Dina Moskowitz, CEO of SaaSMAX (www.saasmax.com), to point us to a few examples. The following three partnerships fit the bill.

AVG and Renascence IT: Communicating Past Hurdles
Delivering high quality managed services requires a strong set of tools that can take the burden of tasks, such as daily monitoring of IT infrastructure, off of administrators. So in 2012, Kirk Lesser and his staff at five-year-old Renascence IT set out to find a professional services automation (PSA) platform as well as a remote monitoring and management (RMM) tool.

The search would prove lengthy, with Renascence realizing after a series of demos and go-lives that the solutions they tried were not meeting their needs. When the most recent solution turned out to have poor scripting, in late 2014 the solution provider turned to AVG (www.avg.com) for both its RMM tool, a result of AVG’s acquisition of Level Platforms in 2013, and its network operating center (NOC).

The RMM installation was a great success, and allowed Renascence to incorporate AVG’s antivirus and maintenance services into its bundle of managed services. The NOC rollout was less so, so they put that aside for the time being. But it was the way AVG handled that disappointment that sold Lesser on their value as a vendor partner.

“We went through a rough patch with their NOC services, but I did appreciate the constant follow-up,” says Lesser. “There was a path I could go through to get resolution,” and it was the right path – they didn’t assign a salesperson an engineering question, for example.

“It allowed me to stay with them for the RMM tool,” he says. “I appreciated their honesty – they were able to acknowledge some difficulties they were having with the NOC. That speaks volumes. I’m willing to stay with a solution provider in a difficult situation if they communicate and are not afraid to talk to their resellers.”

“Yes, we make mistakes and we will probably make more, but we really own them and move forward from them,” says Renita Grewal, director of channel marketing for AVG. AVG is revamping its partner portal to make the site a one-stop shop where partners can find everything they need, Grewal says.

Like any relationship, it all comes down to communicating, clearly and often. “Have that open talk with resellers,” urges Lesser. “We do talk amongst ourselves. We go over the tools. We are very honest on yes, this worked for us and that didn’t. If solution providers want to keep customers, they need to treat them the way they want to be treated.”

Clio and Wingman Legal Tech: Mutual Engagement
Understandably cautious, the legal profession has been slower to accept cloud-based solutions. But that tide has now turned, and Clio (landing.goclio.com/Clio-Certified-Consultant.html) and its partner Wingman Legal Tech (www.wingmanlegaltech.com), are enthusiastically pursuing the opportunity together.

For Clio, that means growing its Clio Certified Consultant program with highly qualified solution providers that share their zeal. For Wingman, a practice management solution would be the centerpiece of its rebranding effort as it transitioned from general IT consulting to one focused on law, says Andres Hernandez, owner.

For a SaaS company building a channel, selectivity is key to ensure potential partners share a high level of commitment on which to spend often limited resources. When it’s easy for a partner to sign up, it’s also easy for them align with a lot of companies while never really buying into the product.

A strong client focus, firm grasp of the cloud model and clear growth plans are among Clio’s partner criteria, but the most important quality may be engagement.

“Our goal is to find someone that will sit in the front seat with us, and Andres has been like that since day one,” says Clio’s Nemetz-Sinchein. “He has demonstrated a higher level of engagement with our leadership team and sales staff.”

“Clio has other channel partners,” Hernandez explains. “We’ve got to stand out from them.”

Working closely with Clio, Wingman used their API to create an iPhone app, ESQ Assist, that enables lawyers to track billable hours from their phones and assign them to specific legal matters in Clio’s billing process. Wingman also contributes client feedback to Clio’s product development.

Clio has invested significant resources in understanding Wingman’s business, which also includes technology/operations consulting, data protection, and cloud transition services, and brings them into deals when clients need a full set of IT services.

Both are clear that such mutual trust is earned. The Do’s of a good vendor relationship include committing strongly to one product in a category versus many and showing strong engagement through action, Hernandez says. “Don’t expect the vendor to give you leads right away,” he advises. “Show you are committed, that it’s a partnership.”

NetDispatcher and Flexxus: Symbiotic Alignment
NetDispatcher (http://netdispatcher.com) needed solution providers focused on ERP and accounting. Flexxus Business Solutions (http://www.flexxus.biz) needed complementary solutions to the ERP and accounting systems it resells. So it was a perfect fit when the two were matched up as potential partners.

NetDispatcher is a Finland-based SaaS provider of field service solutions, focused on landscaping and HVAC, that has built up a US business over the last two years. “It sits on top of accounting systems to streamline the business,” says Steve Wescoat, channel sales director. In selling the solution, “knowledge of accounting helps. We find companies of one to ten people fit best because we know they have skin in the game and will do the marketing and put resources into the product.”

Flexxus was founded in 1999 to help Vancouver businesses of 20+ employees and about $20 million+ get the most out of their business technology, with an emphasis on on-premise and SaaS ERP. Both are looking to work their way upstream to larger enterprises. “I develop relationships with customers that are smaller than that, before they have the need,” says Paul Sweeney, president of Flexxus. “The cost of sales is very high, so I was looking for other software I can sell to generate a relationship.”

After an initial call went well, the two companies saw a strong fit and began working together in late 2014. The relationship has quickly prospered, with NetDispatcher stepping in to offer training and conducting demos, Flexxus contributing field input, and both sides developing a healthy pipeline of about a dozen new leads.

“Paul’s knowledge of accounting helps us not to have to explain that and makes training a lot easier,” says Wescoat. “He brings up good questions and has insights into integrating our system and accounting systems, and setting up and streamlining processes. That saves us money and gets us more customers without having to add headcount.”

Clear understanding of roles is a key ingredient in making such relationship successful.

“I understand my part of the relationship is to generate opportunity, but it’s up to the vendor to focus on marketing and generating awareness, which will create opportunity as well,” says Sweeney.

As the two companies continue developing their alliance, both are focused on pursuing larger clients. Flexxus now has a larger array of valuable software and services to offer clients, and through the current base, NetDispatcher can begin to market to the distributors who sell to landscaping and HVAC companies, a symbiosis that keeps both sides invested in the relationship’s success.
“Each party needs to bring something to the table and make an investment in the relationship.”   VSR

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