May/June 19 - ChannelVision Magazine

Martin Vilaboy Editor-in-Chief martin@bekabusinessmedia.com Gerald Baldino Contributing Editor gerald@bekabusinessmedia.com Percy Zamora Art Director percy@bekabusinessmedia.com Berge Kaprelian Group Publisher berge@bekabusinessmedia.com (480) 503-0770 Rene Galan Associate Publisher rene@bekabusinessmedia.com (786) 953-7297 Anthony Graffeo Associate Publisher anthony@bekabusinessmedia.com (203) 304-8547 David Garcia Digital Marketing Manager david@bekabusinessmedia.com Beka Business Media Berge Kaprelian President and CEO Neil Ende General Counsel Corporate Headquarters 10115 E Bell Road, Suite 107 - #517 Scottsdale, Arizona 85260 Voice: 480.503.0770 Fax: 480.503.0990 Email: berge@bekabusinessmedia.com © 2019 Beka Business Media, All rights reserved. Reproduction in whole or in any form or medium without express written permission of Beka Business Media is prohibited. ChannelVision and the ChannelVision logo are trademarks of Beka Business Media It appears to be no longer necessary for channel sellers to persuade businesses to consider moving applications to SaaS-delivered models. According to a new survey by Techaisle, between 2015 and 2019, “U.S. SMB adoption of SaaS went from widespread to practically ubiquitous,” said Techaisle’s Anugral Agrawal, discussing the survey results. Even among the very smallest of small businesses, more than three-quarters now reportedly utilize SaaS, show Techaisle’s findings. Across the wider small business segment, or organizations with 1 to 99 employees, adoption was 80 percent. Up in the midmarket (100 to 999 employees), SaaS utilization has reached a whopping 98 percent. Even better news for software providers and cloud brokers, the survey suggests that the bigger opportunity for SaaS actually might come after initial adoption. Not only are they using SaaS solutions, organizations seem to understand that capitalizing on the benefits of “cloud computing” requires a fair amount of support for analytics and dashboards, system integration, backup/disaster recovery, data cleaning and security, among other add-on services. Techaisle found that nearly 100 percent of SMBs purchasing a cloud CRM solution, for example, also invested in one or more services to go along with that deployment. Most firms surveyed used four different types of services, with SMBs that use Salesforce, in particular, purchasing an average of 5.3 add-on services. “Add-on services represent a large and essential source of revenue for SaaS suppliers,” said Agrawal. Indeed, according to Techaisle’s findings, license spend represents less than 25 percent of total SMB SaaS customer spending. Non-license spend on services, meanwhile, accounts for more than 75 percent of the total. Top five non-license services by percentage of total services spending System configuration (including designing reports, dashboards and analytics) Customization Data and/or application integration Consulting (including sales process design) Training Source: Techaisle Even further good news, one can almost assume a deeper integration of multiple add-on services into a SaaS platform only makes it harder to toss aside. In particular to ERP solutions, for instance, Techaisle researchers found that services contracts such as dashboard integration and consulting, application performance monitoring, security and patch management are especially sticky with SMB customers. For technology channel partners selling SMB customers, it’s hard to see a deeper un- derstanding of technology by the customer as anything but an opportunity. It’s also hard to see channel partners surviving without likewise grasping a deeper understanding, and then adjusting marketing to the more experienced market. SaaS Add-on Selling LETTER 6 Channel Vision | May - June, 2019