Progress turns ISVs onto SaaS

Infrastructure application vendor Progress Software has developed a partner program to help its channel build a new business model incorporating software as a service.

Colleen Smith, director software as a service, Progress Software said the SaaS plan was part of Progress’ move toward opening up the lower mid-market.

“Progress wants ISVs to move forward and create packaged software products with service capabilites tied around them. We want our ISVs to change their business model because they will be moving away from being a box mover of software products,” she said.

Smith said the business plan was broken into three areas; commercial terms/licensing services; business empowerment offerings and technical empowerment offerings including application transformation.

“ISVs need to look at this model as a business and revenue expansion opportunity and as a way to generate incremental business. It will also offer them a chance to expand into new geographical markets and segments of existing markets,’ said Smith.

Smith said that in an effort to minimise the cost of entry for partners, Progress would not charge for its software used in developing a SaaS model.

"Instead we have adopted a shared risk/reward model based on annuities and royalties," she said.

For Sterland Computing's Greg Thomas, a partner of Progress operating in the building supplies sector, SaaS was proving to be a supplementary sales opprtunity.

"It's a way for us to get into markets we could not get to before - that low end of the market," he said.

For Progress' Smith, the prospect of partners only taking up SaaS as a small portion of their business was not an issue.

"SaaS is a volume model for us. We have 2000 partners, so it's about seting up an annuity," she said.

Within the next two years, Progress expected that 10 percent of revenues would be sourced via SaaS-based partners, Smith said.

Progress Software has been in Australia for 17 years and has built up a channel base of 45 partners, she said. Of these partners, 13 were looking at developing a SaaS model.