Solution Providers Aboard SAAS Bandwagon

Solution providers view software as a service as a big opportunity that has the potential to change the way business is done.

That is according to a forthcoming study from market research firm IDC, “Channel View: SAAS Capabilities and Opportunities.”

The study surveyed just over 300 businesses made up of members of the IAMCP (International Association of Microsoft Certified Partners,) an independent organization, and also partners at an unnamed major IT distributor.

IDC reported that 76 percent of solution providers who responded believe that SAAS will dramatically impact the partnering landscape, and more than 70 percent of solution providers view it as an opportunity.

“I had expected partners to be positive, but the extent of the optimism was very encouraging to me,” said Stephen Graham, group vice president of Software Business Strategies at IDC.

Many solution provider firms are already engaged in SAAS-related activities, according to IDC. And solution providers believe that the most profitable opportunities related to SAAS will remain deployments and implementation services. But solution providers are also looking forward to the recurring revenue opportunity that comes with the SAAS business model, according to IDC.

The firm also expects more vendors to take up the SAAS flag next year.

In 2008 several major vendors and their respective solution provider ecosystems will be entering the SAAS space or ratcheting up their participation in it, Graham said. Vendors to watch include SAP, Microsoft, Cisco Systems and IBM, he said.

One of the vendors looking to help solution providers leverage the new opportunities is Microsoft. The company’s Solution Finder tool helps customers and solution providers find other solution providers, and Microsoft expects its partners to use the tool to help with SAAS projects.

“Partners will increasingly be working together to be able to offer these kinds of solutions,” said Marie Huwe, a general manager with the Microsoft Partner organization in charge of worldwide partner and marketing strategy. “By partnering with each other there’s more opportunity for the channel to cross geographies.”

IDC conducts a similar survey every six months looking at different channel issues. The last survey looked at partner-to-partner collaboration trends.