Recently Tomasz Tunguz made a point regarding VARs in his post on the 5 marketing channels of SaaS: simple SaaS solutions generally don’t need VARs to sell. You can see that by looking at solutions like Expensify, RingDNA, Zendesk, Mailchimp and others (all of these are services that we use at indeni). Generally, it makes sense – VARs are “Value Added Resellers”, which means they add value to what they resell. In most SaaS solutions, VARs can add little to no value – the setup is easy and the customization required can be done by the end user with little help.
Even in more complex solutions, like ServiceNow, VARs aren’t utilized (in the US, their primary market). In their case, they opted to provide professional services, mostly at a loss (see their S-1), over utilizing VARs. It gives them control over the customer experience, which is extremely important. Generally, SaaS, gives you so much control and insight into customer experience, why would you want to give it away?
I argue that you can partner with VARs while at the same time retaining control of the majority, albeit not all, of the experience. Specifically, you can achieve this even with a SaaS solution that is extremely easy to deploy and requires no customization. That’s what we’re doing at indeni – we partner with leading networking and security VARs and go to customers together. It’s so important to us that we’ve set it as the cornerstone of our long term strategy as a means of fueling our aggressive growth. Our VP of Sales, Darcey Harrison (previously a director of inside sales at Meraki), is spearheading this approach.
Well, what we’ve discovered, is that while indeni is a SaaS solution, it ties into non-SaaS physical and virtual equipment. To recap from previous posts: indeni is used by the world’s leading enterprises to identify configuration issues in switches, routers, firewalls and load balancers before they result in downtime. That’s because over 70% of critical network issues could be avoided by simply making configuration tweaks at the right time.
So this means that our software integrates with devices made by Check Point, Cisco, F5, Fortinet, Juniper, Palo Alto Networks and soon others. So, from the point of view of the customer, indeni is a tool that is tightly integrated with their network infrastructure. As such, they not only expect to purchase it via the same channel as they purchase their equipment (VARs) but also expect their channel to recommend indeni to them. This means that a major source of customers for indeni actually comes from VARs reaching out to their own customers and saying “Remember issue X that happened a few months back and you got a ton of flack for it? indeni would have ensured you avoided that from even happening. We can help you set up a POC in less than an hour.”.
Now, going back to Tom’s point – SaaS and VARs are a very rare combination to see. That means that there isn’t much experience in the market for getting this done right, especially with a solution that’s so easy to deploy. It means that a lot of times we invent our own metrics and strategies to get this done right. It also limits our sales talent pool: how many sales people have experience in both selling SaaS solutions and working with VARs?
Also look at it from the point of view of the VARs – how much experience do networking and security VARs really have with SaaS? Most don’t have any experience at all.
The message I’m trying to get across here, is that while the vast majority of companies take a certain approach, it doesn’t necessarily mean it’s a fit for YOUR business model. Don’t be afraid to invent something new. Just make sure you get it right.