New Class of Channel Players Emerges in Cloud Age

Now that there are solution providers that are completely born of the cloud in that most of the IT services they provide are dependent on multiple cloud services, it makes sense that we would start to see distributors born of the cloud, as well.

SaaSMax aims to cater to the needs of a new class of solution providers, and cloud application vendors are still in their relative infancy. Instead of charging vendors upwards of $150,000 just to be listed on a Website, the distributor’s primary aim is to facilitate relationships between many of the smaller providers of software-as-a-service (SaaS) applications and solution providers in the channel via an online marketplace, said Dina Moskowitz, CEO of SaaSMax, which was originally formed as a traditional reseller.

While SaaSMax is not the only new distributor to emerge in the cloud age, Moskowitz said, the company is not trying to own the transaction between the cloud service provider and their channel partners or, for that matter, the solution provider and the end customer.

Instead, SaaSMax is charging SaaS vendors a modest fee to facilitate marketing and sales relationships with solution providers such as Exigo Group, a solution provider focused on cloud apps and services.

Demand for SaaS applications is shifting dramatically, said Stephanie Martin, Exigo president.  Instead of being focused solely on SaaS pioneers such as Salesforce.com, small and midsize (SMB) organizations are looking to cut their operational expenses by shifting to emerging SaaS vendors that provide similar capabilities at a fraction of the cost, she said.

As the cost of delivering SaaS applications continues to drop in the age of the public cloud, the price points at which organizations can embrace SaaS applications are dropping accordingly. While that may put some pressure on profit margins for those services, it also means that customers can afford to invoke more SaaS applications than ever. It’s only a matter of time before they want to integrate data across those cloud services in a way that creates high-margin opportunities for solution providers born of the cloud.

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.