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SaaS Providers Becoming "Wholesalers"
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SaaS Providers Becoming "Wholesalers"
May 21, 2010
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Transcript of "SaaS Providers Becoming "Wholesalers""
1. SaaS Providers Becoming “Wholesalers” David S. Linthicum Chief Technology Ofcer Bick Group
SaaS Providers Becoming “Wholesalers” | Page 2 SaaS Providers Becoming “Wholesalers” According to Shamus McGillicuddy, in this artcle posted in Computer Weekly, “XO Communicatons recently announced a new partnership with Jamcracker, a Santa Clara, company that ofers a delivery platorm for third-party SaaS providers. Via Jamcracker's platorm, XO will ofer a suite of SaaS business applicatons to SMBs in the 75 metropolitan areas it services.” The concept is that the multtudes of SaaS providers are lining up beyond larger telecom players, in this case, XO, to fnd markets that are underserved. Jamcracker is an aggregator of SaaS providers, enabling them through a platorm that provides provisioning and billing and all of the essental stuf that a lot of ISVs need in order to convert their products to SaaS. To further their SaaS oferings, Jamcracker is taking their wares to existng network players who have beter connectons with smaller businesses that are the more likely users of SaaS. Indeed, many smaller SaaS players, which are the majority of SaaS players out there, are not known to the lucratve SMB marketplace since they typically can’t aford the market penetraton costs. Thus, it makes sense to become part of a SaaS “front-end” such as Jamcracker, as well as a part of larger companies that are able to both introduce the company to SaaS, and sell a SaaS ofering, in this case through Jamcracker and further through the telecom XO. For the smaller SaaS player there is the beneft of market penetraton and increased sales, and for the large telecom it’s another proft center. Indeed, the larger telecom players can ofer a menu of SaaS providers, all delivered over their networks, and all providing a new means of increasing that ever important monthly bill. “Erin TenWolde, a senior analyst at IDC, said many SMBs prefer to work with trusted advisors when making Let’s contnue the conversaton: e-mail David Linthicum, dlinthicum@BickGroup.com © 2010 Bick Group
SaaS Providers Becoming “Wholesalers” | Page 3 technology decisions. The SaaS market is fooded with young companies unfamiliar to SMBs, but those SMBs have long-established relatonships with their telecom providers.” Clearly we are entering a world where SaaS will become part of the network ofering to small businesses. Indeed, one can see a SaaS-delivered small business accountng service delivered to a business as a part of the monthly bandwidth bill, or perhaps a suite of SaaS services that provide the small business with access to applicatons once only available to the big boys. While many can see the downsides to this sort of model, the upsides are more plentful. First, the smaller SaaS providers fnally get a try in their respectve market, and are fnally able to get around the noise of the larger players. Second, with the use of aggregator’s, small businesses have one-stop shopping for their SaaS providers, and are perhaps able to try several for one low price. Finally, the market will work here; those who don’t provide the SaaS value will quickly be voted of the island, where those who do will grow rapidly in popularity, and thus profts. Let’s contnue the conversaton: e-mail David Linthicum, dlinthicum@BickGroup.com © 2010 Bick Group