On-demand software sold through traditional channels?

* Software as a Service growing more popular with a variety of applications

Software as a Service or on-demand software is becoming more popular with many different types of applications. In addition to the many CRM applications available on-demand, like Salesforce.com or SalesNet, there are a growing list of technology management applications available on-demand. These include a systems management offering from Webex and a monitoring and analytics offering from Klir Technologies. I last wrote about SaaS back in February where I covered my top 10 reasons for considering SaaS applications. I recently learned about an interesting partnership combining the infrastructure and services of a technology distribution company with Klir’s on-demand monitoring and analytics offering.

GE’s Access Distribution is a value-added technical distributor of complex computer products, solutions and services. They offer value-added resellers (VAR) an interesting mix of support and services to sell and deliver technologies and services in the areas of network security, storage, enterprise applications software and the Sun systems platform. Through their OneTech offering, they also bring 24X7 support desk and integration services to support VARs. This is a support infrastructure that allows VARs to avoid duplicate internal infrastructure.

Access Distribution was looking for ways to bring more value and assistance to their VAR partners. They decided that adding managed services to the product mix was one way to do it. They identified a SaaS offering for monitoring and analytics by Klir Analytics and worked out a relationship to allow their VARs to offer this on-demand application to their clients.

This is interesting for several reasons. First, it is interesting to see a traditional distribution and reseller model selling hosted services. These distribution models are well established for hardware products like servers, network devices and storage. They are also well established for selling many types of traditional licensed software. Most SaaS applications sell direct, swimming upstream of the traditional methods of distribution and delivery. But here we have the traditional distribution system selling the hosted service. Could this be signaling the mainstream maturing of the SaaS model?

What is also interesting is how the Klir analytics offering interacts with the VAR relationship with their clients. The data generated by the analytics engine will provide better insight into the usage patterns for capacity planning and identify assets nearing end of life. Both are important pieces of information to the sales cycle for new equipment and additional software licenses. So the VARs will be arming their customers with tools to make better buying decisions. And in some cases the VARs may have access to the analytics data directly, if that is the kind of working relationship they have with the client, which means they can better assist their client in buying the right stuff at the right time.

This is really the perfect use of hosted technology. Klir has created an offering that can be up and running quickly with minimal impact on the existing IT infrastructure, but that provides valuable data to improve the IT environment with minimal upfront effort or investment. It is made available through an existing distribution channel so the VARs’ current knowledge of their clients can help them quickly and effectively communicate the on-demand offering and its value in a way that is specific to each client. And both the client and the VAR benefit from the analytical information generated by using the product. Expect to see more creative uses of on-demand software based on this example.

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