What are the SaaS implications you foresee for vendors, partners and customers?

With the developing SaaS ecosystem we have much more of a competitive environment than before. There are an increasing amount of vendor types and activities today which will only spur more competition. Through these initiatives, many SaaS players are increasing their direct sales efforts in addition to their indirect strategies. This means that there are more “feet on the street” delivering the SaaS value proposition to customers.

In addition, more companies are looking towards channel and alliance relationships to help expand their reach in SaaS. These partnerships will be used to reach new customer segments, software markets, regions and vertical industries.

All of these factors have a tremendous amount of implications for customers. There will be more messages and information to customers which may cause customer confusion about the various deployment and delivery options available.  Therefore, clear and consistent messaging will be important.

What is the key to becoming a more prominent participant in the SaaS ecosystem from a business perspective?

Any player active in the ecosystem has the potential to emerge as a prominent participant, or “hub”, in the SaaS ecosystem. Each company or partner within the ecosystem will seek business relationships over time with the companies that help develop their offering and optimize their market position. We believe that there are certain characteristics that will help drive a company towards becoming a hub. These key attributes include technical, market, and sales enablement:

1.      The first attribute is technical enablement. When thinking about technical enablement, one can envision a role of providing partners with roadmaps, tools, and reliability.  This is to help partners understand how they can best navigate the SaaS opportunity by linking to a hub’s network.

2.      The second attribute is market enablement, which consists of a company’s presence and go-to-market strategy. It needs to have the ability to increase the adoption and growth of SaaS products and services. Therefore, a clear go-to-market strategy is essential in order to help partners plan their investments to support and promote the relationship.

3.      The last key attribute is sales enablement, and sales enablement can be considered as a company’s ability to generate sales opportunities by providing partners with resource accessibility and exposure as well as driving leads.

What is the opportunity  for SaaS adoption by company size?

With SaaS, its a very incremental and organic form of adoption rather than the landscape purchases that are typically associated with traditional on-premise software purchases. For instance, we have seen large enterprise adoption of on-demand solutions, however it is not usually the entire organization that adopts, but rather a particular department or business unit which can very much act like a small business which is something to keep in mind.

What is your perspective on how the software ecosystem will continue to evolve?

We believe that a new software ecosystem is emerging where many more companies are participating beyond just software companies. This means that the industry is shifting from being partner-centric to an ecosystem that is network-based.

Part of this new ecosystem development is SaaS. The traction gained from on-demand providers has forced traditional software, services, hardware, and telecommunications companies to reevaluate their business and partner strategies. To a large extent, many of these companies are trying to identify the right type of partners to help them take advantage of the on-demand opportunity. These partnering relationships and ecosystem development are what IDC believes will be key to maintaining software-on-demand growth.

What should hosters, ISVs or telcos do today, be it technical, partnerships or marketing, to maximize the SaaS opportunity?

To take full advantage of the SaaS opportunity, hosters, ISVs and telcos should consider how to build their own ecosystem of partners. In doing so, we recommend that they ask themselves key questions such as: Who are the right partners for you? What criteria are you looking for in a SaaS partner? How do you build out a total package of capabilities for the end customer? Ultimately the key is for a company to take a look at their core competencies and determine what its key strengths are, and what strengths partners can bring to the table depending on what it is that the company wants to accomplish.

For hosting providers and telcos, SaaS/ISV players represent a key market for establishing partnerships as they can offer the hosting expertise and SaaS hosting that ISVs seek. In addition, telcos can provide billing, and other infrastructure assets that they seek.