Axcient Intros Channel Compensation Model for SaaS

By Gina Roos  |  Print this article Print
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Axcient will offer to compensate channel partners up-front for the sale, delivery and support of its Business Recovery Cloud solution.

Here's the math: Using the Axcient example that a customer pays $3,383/month for the Axcient Business Recovery Cloud, under the new model, the VAR partner receives roughly $17,000 for selling the solution instead of $500/month based on the traditional model. This translates into the first five months of revenue, not margin. In addition, every year the partner renews the customer, it receives a check equivalent to the first month of recurring revenue as margin, so in this case, $3,383.

Moore admits that for companies to implement the same model they would have to be "very bold," along with having deep financial pockets, and industry-leading retention. "You will have to know that you'll keep your customers for at least five years, if not, seven or more, to make this model work. It will be a challenge for the industry to adopt but I believe others will follow suit."

Axcient is financing the new partner compensation model with an additional $25 million in funding that it recently announced. Part of the funding will also be used to invest in the Business Recovery Cloud platform and expanding sales and marketing.

Axcient's goal is to sign up 100 VARs on the new platform. During its soft launch in January, the company signed 30 partners. Although Axcient is a channel-only company, it has primarily worked with managed service providers. With the new program, the company is focusing on expansion into the VAR channel.

Gina Roos, a Channel Insider contributor, focuses on technology and the channel.