Listen to my podcast with Jeff Kaplan, the Founder and Managing Director of ThinkStrategies, Inc. In this podcast we discuss exactly what channel organizations need to do to survive in a SaaS and cloud world.
Listen to or download the 7:00 minute podcast below:
PS: Will traditional channel organizations be disintermediated by cloud and SaaS services?
JK: Well, there's that threat if they don't change to -- respond to the changing requirements in the marketplace but I firmly believe that if they do make some changes they can in fact capitalize on this new on-demand movement which encompasses both Software-as-a-Service and the broader idea of cloud computing.
What new opportunities do SaaS and cloud services actually offer channel organizations?
Well, the fact and matter is that while Software-as-a-Service simplifies the deployment and use of many applications, there still is plenty of need for customers to be helped by channel organizations to best understand how to select the right SaaS solution to meet their specific needs, and how they can possibly cater that application even though some SaaS solutions tend to be kind of a one-size fits all. In general, they are increasingly more flexible in terms of being able to be reconfigured to meet specific business requirements so a channel organization can also help in that regard.
And then, there's the opportunity to integrate these applications with one another and train people to properly use them. And in fact, maybe even get involved in some change management to change the business processes that surround the use of these applications. So that full lifecycle of evaluating needs, evaluating options, reconfiguring or customizing to a certain extent of the application and helping with training and change management represents some fertile opportunities for channel organizations going forward when it comes to Software-as-a-Service.
But then there's even greater opportunities in the broader array cloud computing capabilities that are quickly emerging because that encompasses a new generation of Platforms-as-a-Service, which are development environments, and Infrastructure-as-a-Service, which are computing resources available remotely through a variety of service providers. And once again, there's a lifecycle of opportunities in both of those areas where channel organizations can help their customers cater these new services to meet their specific business requirements.
Now, I think you've touched on it, but can you drill down a little bit more on exactly how can they take advantage of these opportunities?
Well, I've talked a little bit about the way in which they could hold the hand of the customer through the process but what they can also do is use these services for their own purposes. So for instance, they can take advantage of some of these Platforms-as-a-Service; develop new solutions to sell to customers. They can also take advantage of the new Infrastructure-as-a-Service capabilities to reduce the cost of their own infrastructure requirements and they can use these services because of the direct connect that they now have to the customer to better monitor and anticipate customer requirements so as to more proactively be able to serve their needs and offer them additional solutions.
Well, that makes sense but there's got to be some challenges that they're going to face in this process, correct?
Yeah, there is so nothing comes easy and the big challenge here is that we're talking about a whole new form factor when it comes to these solutions. Most channel organizations made a living selling packaged apps or traditional systems that they might reside on and then spending a considerable amount of time with a certain amount of traditional skills reconfiguring those applications and systems to meet the specific needs of the customers. Now that we're talking about a new generation of online or web-based services, first of all, those require a different set of skills.
Secondly, they're being provided with the expectations that they're going to be delivered more rapid and cost effective fashion and in fact, be more flexible to utilize and that's going to squeeze the margins that the channel organizations have been used to achieving in the past. Ad also, it's going to accelerate the deployment processes that they're expected to be able to adhere to. So it means having new skills. It means having more streamlined processes and it means reducing overhead cost to be able to accommodate the tighter margins involved.
But as I mentioned before, if a channel organization in fact takes advantage of some of these same solutions, whether it be Software-as-a-Service or cloud computing, they can in fact reap the benefits like any other customer. Some of those efficiencies cost savings.
Now what do you see for the future of channel organizations?
Well, there's no question that they're going to go through the various stages of fear, uncertainty and doubt but the enlightened channel leaders will see that they can't avoid this new trend and they're going to need to learn all they can about it as quickly as possibly and make the proper adjustments in order to be able to survive going forward. So I do think enviably they'll be some channel organizations that will not be able to make that transition. They'll not be able to cross that caseum. But I think the smart channel organizations will get ahead of this train and will figure out ways to capitalize on it and will basically we configure their businesses to take advantage of the new opportunities while at the same time help them fend off the competitive threats that are represented by this very important trend.
I agree with you. And at ebizQ, we're always so focused on the new. And I don't want to say that channel organizations are old but if they don't get a change management in process, they're going to be old.
Yeah, they're going to be old and dead if they don't do it. They really need to adjust it or else they'll be the dinosaurs that we'll be talking about from the past.
The old horse and buggy.
There you go.