Report: Proper Training and Hiring are Keys to Channel Success in SaaS

A wealth of new business opportunities in the fast-growing software-as-a-service (SaaS) market are available to channel companies willing to adjust their business operations, according to a new report from CompTIA, a suburban Chicago-based technology association. But before any of these outcomes become a reality, channel partners need to effectively adjust their business models.

The report, entitled, “Why Software as a Service? Benefits & Advantages of SaaS,” is based on a survey of 300 U.S. IT businesses.

The survey reveals that staff training is the primary step to preparing their businesses for the SaaS market. More than half of the respondents have retrained existing technical staff, while nearly half have retrained existing sales staff.

“From a technical training perspective, we’re talking about building cloud-based skills, such as the ability to integrate SaaS applications located in different public clouds or to on-premises software,” said Carolyn April, senior director, industry analysis, CompTIA. “Security skills pertaining to cloud-based tools are another area that warrants retraining.”

The report also says that sales team retraining is necessary because selling SaaS requires different conversations and relationships with customers than are employed when selling hardware components.

In addition to retraining existing staff, 36 percent of channel partners have hired new staff with SaaS sales experience; 34 percent have created new positions to work with SaaS distributors and exchanges, and 31 percent have reoriented their marketing strategies to appeal to potential SaaS customers.

Altering business practices aren’t limited to channel partners. Independent software vendors looking to grow their business via a partner model must also make adjustments.

“Many vendors in the SaaS space are unfamiliar with the traditional channel sales model and may lack formal partner programs and indirect sales strategies,” April said. “One challenge is designing the right compensation models to account for sales brought in by partners.”

Approximately two-thirds of channel partners expect to see increases in the revenue they earn from SaaS-related customization and integration services in the next year. A slightly smaller percentage is counting on revenue boosts from managing SaaS-based solutions for customers.

Channel Impact^®
Given that SaaS is likely to remain a dominant cloud model moving forward, the opportunity for channel partners who can successfully navigate the changes can be quite strong, assuming the organization can adjust its selling style and resolve critical details, such as compensation models.