The software as a service (SaaS) market is thriving. Gartner estimates it will reach $43.6 billion this year and grow by 63% to $75.7 billion in 2020. For managed service providers (MSPs) and IT solution providers, this type of explosive growth spells opportunity in capital letters.
In a report titled Why Software as a Service? Benefits & Advantages of SaaS, industry trade association CompTIA® argues that IT channel companies willing to adjust their business models stand to benefit greatly from this market growth.
Even though nearly three quarters of channel companies polled by CompTIA said they had sold SaaS solutions in the previous 12 months, the organization says, “there’s even more business to be had by both traditional channel players who cut their teeth in hardware sales and integration, and new market entrants who prioritize software sales.”
Seizing software-as a-service (SaaS) opportunities requires business-model adjustments. Here are three primary areas that will help MSPs succeed in this space:
Be it technical or sales staff, providers have to train their teams to sell SaaS solutions. Even MSPs who have experience in remote monitoring and management (RMM) don’t necessarily have the expertise they need to sell SaaS.
There are similarities of course, but SaaS requires you to interact with a different type of vendor. Some of those vendors have more evolved models than others when it comes to dealing with the channel, and your organization needs to learn how to manage them all.
As already noted, providers that wade into the SaaS space will be dealing with new vendors in some cases. To help ensure a positive experience with these suppliers, be sure to do your homework regarding their track record in dealing with partners, their financial health, and the reliability and effectiveness of their solutions.
How you build relationships with SaaS vendors affects your relationships with customers. If the solutions underperform in some way, that will hurt your customer relationships, which is why due diligence in selecting vendors is critical.
As with managed services, SaaS involves long-term relationships with customers. This requires a different approach to marketing by focusing on the service, rather than the product. When introducing an offering to customers, highlight how the solution addresses business needs and supports strategic goals.
Customer satisfaction is key in managed services as well as in SaaS relationships, so providers need to measure customer sentiment through frequent contact. Survey customers periodically to find out how they score your services, and wherever possible, make adjustments to improve areas that receive lower marks.
SaaS isn’t a market MSPs can afford to ignore. As more and more customers rely on cloud-based offerings to help run their businesses, SaaS applications will be among their top priorities. MSPs should be assisting them in those decisions; therefore, investments in SaaS now can help MSPs position themselves for healthy future growth.
Pedro Pereira is a Massachusetts-based writer who has covered the IT channel for two decades. Recognized as one of the first journalists to cover managed services, Pedro continues to track, analyze and report on the IT channel and the growing MSP partner community.
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