Industry Insights

How B2B SaaS Vendors Can Find Success in the Channel

By Ideas @ AppDirect / May 10, 2018

“The SaaS business model is broken. There, I said what's needed to be said.”

That tough but true statement comes from a recent column by Sunir Shah, President of the Cloud Software Association.* He goes on to say: “How many products are made that you are forced to buy directly from the manufacturer? Do you buy your shoes, your toothpaste, or your cars direct from the manufacturer?”

The obvious answer is no, but this is the model that many SaaS vendors are still using. In fact, as the column points out, companies like IBM, Intel, and Cisco all generate more than 80 percent of their revenues through resellers and distributors, but only 23 percent of SaaS revenues are through channel sales.

Companies like IBM and Cisco generate more than 80% of their revenues through resellers, but only 23% of SaaS revenues are through the channel.

“Let’s face it: focusing on direct selling is shortsighted,” Shah says. “No company can phone every customer in North America, no matter how big your sales team is. We have to get to a place where SaaS companies can leverage distribution networks.”

ProsperWorks Launches a Channel Program, Rapidly Scales to 85 Countries

Many SaaS vendors are already taking steps to stake their claim to the immense opportunity that the channel offers. One of these companies is ProsperWorks, creators of an award-winning CRM built for Google’s G Suite that eliminates tedious data entry with automation while offering superior ease of use.

When he was hired, Michael Benayoun, the company's head of channel sales, knew that he had his work cut out for him. “I understood that we needed a reseller management solution right from the start and that it didn’t make sense to build it ourselves,” he says.

That’s why he made the decision to work with AppDirect. As Benayoun explains: “Any company serious about the channel should have a way for partners to easily interact with it. At the end of the day, it’s my job to make it easy for our partners to do business with us and AppDirect helps us achieve that.”

Since launching its channel program, ProsperWorks has been able to onboard resellers in 85 countries. 

Ideas @ AppDirect is a leading source for trends, statistics, best practices, and other information related to the digital economy.

*AppDirect holds a seat on the board of the Cloud Software Association.