Software as the New Frontier

Every now and then, something happens in the IT industry that causes wholesale changes to the way we do business. The advent of the Internet is the most recent example of how revolutionary technologies and concepts have such far-reaching effects. We now have a new one staring us in the face. As Software-as-a-Service (SaaS), online software purchases, and all of the various permutations begin to gather steam, a lot of questions are reopened regarding how IT products will be bought and sold.

This is the new frontier for go-to-market strategies, and will dramatically impact vendors, channel partners, and end customers alike-- albeit in different ways.

For the vendors, the key is to revise their services strategies in such a way that they can leverage the opportunity while at the same time avoiding the alienation of the channel partners by absorbing too much of the profit that under the current model would go to the channel partners themselves.

For customers, the model becomes a virtual candy store for sampling software in a quick and highly efficient manner with the option to try before you buy. For some, this will be a great opportunity to make the best possible software choices. For others, however, this model gives them an opportunity to damage themselves through their own lack of knowledge. When point-products are dropped into a solutions-based world, one had better know what they're doing because useful help from the vendors will likely be hard to come by.

For example, a long time ago Microsoft issued an update that destabilized one of the applications I was using. I called the application vendor who seemed very familiar with the situation. The tech support guy led me through a series of instructions that included a modification to the OS. Before I made the change I asked him if this would have any other effects. He assured me that he does this all the time without any problems. Only seconds after I made the change, error windows started popping up all over the place. I told him what was happening and he said, “That's a Microsoft problem. I don't support Microsoft."

I could easily imagine the sort of thing happened in a software-a-la-carte world.

Although changing software models seem likely to disrupt the channel and possibly disintermediate it for the short term, I can also see a longer term scenario in which the role of the channel is actually strengthened by the end customers' need to have someone in their court who can maintain the context of the overall solution and function as the honest broker among the vendors.

Sound familiar? The more the role of the channel changes, the more it stays the same. But channel programs are likely to change to accommodate the new model. And how those programs will need to change in order to maximize results is exactly the question that is keeping vendor executives awake at night.

• Cisco