SaaS and the Channel: The Hidden Perils
There's no escaping the fact that software-as-a-service (SaaS) has emerged as one of the hottest trends in IT. But a new report from Siemer and Associates, a venture capital firm, suggests that solution providers would be well-advised to consider the long-term impact this trend will have on the profitability of software vendors. SaaS business models often require significant capital to break even, according to the report. This could affect how much cash SaaS vendors might have to invest in such endeavors as building up their channel. While there's no doubt that SaaS applications increase the number of opportunities for solution providers to engage customers, the long-term effect on their operations could be significant. Given that economic reality, channel partners might want to take a harder look at which SaaS vendors they want to partner with, especially given all the recent merger and acquisition activity in the software industry. Here, Channel Insider examines the key findings of the Siemer and Associates report.