December 5th, 2007
A platform for the SaaS channel
Talk about who has the biggest SaaS ecosystem perhaps misses the crucial point, which is that there simply isn’t enough ecosystem out there to sustain the current size and growth of the SaaS industry. On-demand vendors have struggled to identify and recruit enough partners willing to work with them. The barriers to switching remain significant enough to deter existing conventional solution providers and integrators from making the jump, particularly as their current business still generates plenty of revenue opportunities. The few companies that have sprung up as specialist SaaS integrators are racing to grow fast enough to keep up with demand.
Last week, I caught up with Jamcracker [disclosure: a recent client], which is aiming to plug this gap by offering a ready-made platform for the SaaS channel. The Jamcracker offering, which I’ve written about a couple of times previously, offers would-be SaaS partners a ready-made billing and provisioning infrastructure and a pre-integrated portfolio of third-party products. It now has a number of companies signed up and delivering services using the platform, including telecoms provider XO Communications — and more in the pipeline.
Back in the early days of SaaS (when Jamcracker first launched) there was a lot of talk about disintermediation — the idea that the Internet would make resellers, integrators and solution providers redundant, because businesses would just pick and choose applications from a Web-based portal. That view failed to take into account the complexity of business applications, and it’s since become evident that partners play an essential role in verticalization, implementation and integration, and in sustaining the customer relationship. Instead of trying to make channel players redundant, Jamcracker’s aggregation platform takes care of most of the heavy lifting involved in assembling a SaaS proposition, but still leaves the customer relationship firmly in the hands of the solution provider.
“There’s a lot of anxiety in the traditional software channel about SaaS,” Jamcracker’s VP of marketing, Steve Crawford, told me last week. It’s a feeling bred from unfamiliarity: Jamcracker has found that it has to give solution providers a lot of help and support in understanding how to go to market with a SaaS offering. It’s not just smaller providers, either. Jamcracker has created a marketing support program called Jumpstart for its telco prospects. “That’s what gets the telcos really excited,” said Crawford. “The fact we can come in and act as their marketing partner in getting to market has been resonating very well.”
The product integration is another area where Jamcracker’s offering goes well beyond a pure technology platform. Crawford tells me that “a lot of work” goes into standardizing the look and feel of the marketing collateral that’s presented over the Web or in customer interactions. For XO, Jamcracker has created service bundles as well as offering an a-la-carte choice of individual services.
An additional distinctive aspect of the service is a helpdesk operated by e4e, a sister company of Jamcracker, which provides a unified support point for all the applications on offer, as well as the interactions between them.
This kind of attention to detail means that channel partners can worry less about the technology and get to grips instead with the new attitudes, skills and business models required to be successful in the on-demand world.
“The whole notion of what a value added reseller or systems integrator is really gets changed when the complexity of installation switches from technology to business process integration,” Crawford told me. “The value-add is not that you know how to install software and hardware, it’s do you know how to integrate my accounts system with my on-demand CRM system? Some of it will be out-of-the-box and some of it will be where the VARs have a great opportunity.”
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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