Partners flock to software as service

The software as a service sales model may be about to hit the big-time, according to Microsoft Australia.

The software vendor has reported a massive increase in the number of partners signing on to its Service Provider Licensing Agreement (SPLA) program.

The company has seen over 180 new partners come aboard since taking on NewLease as its SPLA distributor in January.

These organisations add to the 60 direct partners, such as Telstra, ISV ExpressApps and outsourcer Unisys, the vendor has signed since it first launched the program in 2000.

Microsoft's regional hosting specialist, Philip Meyer, said appointing NewLease had allowed Microsoft to take software as a service to the lower mid-market.

“They have had success in targeting the low end of web hosting with partners addressing the needs of Windows-based customers,” he said.

“The other side of that is in the PC rental market. Partners can provide up-to-date applications for people who think they still have to use Windows 98.”

For recent SPLA indirect partner, BlueArc, taking on the software as a service model had allowed it to go from the corporate and government sectors down into the mid-market, sales and marketing director, Chad Craven, said.

“It is really changing the way we engage with customers,” he said. “Software as a service is a way to completely come in under the radar with a cost per user model.”

“Being able to offer SQL, for example, at $32 per user per month instead of $15,000 upfront means a whole new section of the market can consider the product.”

While verticals like sales automation and mobility solutions had shown themselves to be profitable areas for an SPLA approach, areas like franchising were also growing, Microsoft's Mayer said.

“The franchising community has been a big taker-up of this pricing model because each business has a need for a common service level across all of its downstream franchisees,” he said.

Mayer would not provide a figure on the likely growth in SPLA partners over the coming year, but said Microsoft was considering the appointment of a second distribution partner.

"NewLease manages all of Australia and APAC but we will reach a point where we will need to engage a second player," he said. "That’s likely to be in the middle of next year."