Bridging the gap of death

SaaS vendors are coy about the incentives they offer the channel, but they typically relate to familiar bulk discounts, licences, training and attendance at VIP events often in exotic locations. Many vendors make the point that SaaS deals driven by the partner stay with the partner – to avoid dust-ups over poaching – and that they drive deals back through the channel with content marketing and other activities.

For resellers who were used to making double-digit monthly revenues from each mailbox, bolting on services and scale is critical, especially because the basic service sells for pennies in the dollar. OzHosting CEO Anthony Banek says this has led systems integrators to lose customers or forced them to cannibalise their own services before the competition did.

“A massive driver for systems integrators is end of life for Microsoft Small Business Server,” Banek says. 

“I saw a financial organisation was paying a systems integrator $7,000-10,000 a month and they had three mail boxes. They moved to us and they’re paying $21 a month.”

Platforms such as Parallels Automation’s application packaging standard, which are like Google Marketplace for hosting providers, help to orchestrate services such as email, communications and collaboration, Banek says. 

Banek is launching a hosted voice service that combines Microsoft Lync, Exchange and SharePoint with cloud storage.“As a service provider, we’re focused on the back office,” he says. “Parallels Automation allows us to cherry-pick different services and products that complement our core offering.” 

The price is right

Evading fierce mainstream competition with localised services has helped Epic IT maintain profit margins, says the cloud provider’s founder and managing director, Greg Markowski. The WA CRN Fast50 lister appeals to Perth companies that want to keep their data in the state, prominently displaying this fact on the landing page of its corporate website.

“There is no need to slash your prices drastically if your price reflects a very good product that is locally supported in the same city as your target market,” Markowski says. “Having said that, our prices are still competitive but they are not rock bottom.”

Markowski emphasises Epic IT’s value over a competitor’s price when talking to customers, such as the local support and service that has customisation, integration and migration. 

“I don’t really believe in cannibalisation. If a business does this, then they are not marketing to the correct audience and should change their focus rather than their price.”

Annuities have also provided Markowski with confidence for budgets and planning: “The key is client satisfaction, which is great [because] it eliminates companies that sell and burn.”

Epic IT will soon release cloud “building blocks” so customers can assemble their own solutions like Lego bricks.

“Every ICT company will eventually have to submit and come to the party by either directly supplying or reselling SaaS or cloud otherwise they won’t survive. The growth will also be proportional to Australia’s infrastructure with factors such as the NBN or lack of NBN.” 

READ MORE

• Reseller reaction: Seeing software situation from both sides

• The origins of software-as-a-service

• Can incumbents challenge disrupters in SaaS?

• The SaaS accounting war