This post is part of a Penton Technology Channel Group special report on Software-as-a-Service.
When I ask Dina Moskowitz to describe SaaSMAX, the startup she founded and for which she serves as CEO, she tells me it’s the eHarmony of the software channel. This, for a former investment banker, seems like the most unlikely of spots for a career to lead. “It’s no one’s goal in college to be in the channel,” she laughs when we sat down to talk about how the cloud and Software-as-a-Service is changing the dynamic of the traditional IT channel. But she doesn’t see this as a disappointment, or even a challenge. For Moskowitz, her lack of history in the channel is exactly why she’s so good at what she does. In an IT world that’s looking more and more alien to seasoned veterans of a channel originally built around hardware sales and upfront revenue, her fresh eyes give her a perspective a lot of channel executives don’t have.
In retrospect, Moskowitz’s winding career gave her the perfect blend of skillsets for where she is now. In 1988, she leveraged her expertise in venture capital and private equity to found Corporate Business Plan Associates, working with organizations to develop business strategies that laid the tactical and financial roadmaps to achieving her clients’ visions. It’s a business she’s run for 28 years, and while one might think a business plan consulting startup would be challenging enough for any one person, Moskowitz is a woman who likes to stay busy. Very busy.
In the last 15 years, Moskowitz has founded or held leadership positions in six different organizations, many of them concurrently. She worked in business development and marketing for Spoken Translation, an automated cross-lingual communications platform. She co-founded a real estate brokerage called PineappleHut. She founded Critical Data Solutions, a SaaS-based data storage app. She even worked in marketing and sponsorship development for Jelly Belly’s sponsored cycling team. Along the way, she was named to the steering committee for the Cloud Network of Women (Cloud-NOW), a non-profit consortium of women in cloud computing whose goal is to use technology to give women around the world professional development communities. She’s a founding judge of the San Diego Women’s Hackathon and, as a cherry on top, she sits on the CompTIA Vendor Advisory Council.
So in 2011, when Moskowitz decided to turn her sights to bridging the gap between the SaaS world and the channel, it seemed like a natural evolution in a career that’s wound through finance, startups and the cloud. And she can’t imagine wanting to be anywhere else.
Software-as-a-Service, Meet the Channel
According to analyst firm Gartner, subscription-based software models have overtaken traditional, on-premise licenses to now account for more than 50 percent of new software implementations. Considering the market barely existed 20 years ago, it’s an astounding market shift that’s giving the IT world whiplash. IT veterans have long understood that companies simply can’t scale past a certain size without the channel, and there’s a certain power in that. In a very real way, the channel is what enables high levels of success in industry. The giants of enterprise technology are powered by the channel.
So just as VARs and service providers need to embrace the cloud to survive, the cloud and SaaS vendors need the channel in order to grow. It’s a symbiotic, if still uneasy, relationship. And though she didn’t expect it, it now seems almost natural that Moskowitz’s role is to play matchmaker between the two.
She calls it “crossing the SaaSm,” and while it’s a catchy phrase, it’s also apropos. “The first thing I did to identify if there was a need for SaaSMAX was put together two surveys,” she tells me, “one for resellers in the online marketplace and one for ISVs.” In 2011, those two groups were just starting to recognize the need for one another, and the survey results showed they were hungry for an online platform to help them connect.
Moskowitz wanted to take it one step further. If there was one thing her background in business development taught her, it was how to recognize market opportunities and strategically place a company to leverage them. The channel knew it needed to sell software, but didn’t really understand how to do it and make high margins. And the independent software vendors (ISVs) knew next to nothing about selling through the channel.
“We’re still a startup,” Moskowitz says. “We’re evolving based on demand from several SaaS companies and thousands of resellers.” SaaSMAX started as a micro-consulting partner for SaaS vendors, both established and emerging. ISVs pay the company to get their brand into the channel through webinars, email blasts, social media campaigns—all of the digital marketing skills that Moskowitz has spent the last decade and a half building. On the partner side, SaaSMAX helps resellers identify a stack of services and bundle them to increase their margins. The goal is to help partners create complete solutions that provide growing annuity revenue in a one-stop shop marketplace.
Over the last two years, however, the company has invested in their own internal “matchmaking” technology that automates and scales relationship building in the software channel. It built PartnerOptimization.com, a data mining and analysis platform that performs what Moskowitz calls deep dives on its resellers. “It determines partners’ specialization, products, customer base, partner certifications, distributors,” she explains. “It may keep information on what they purchase, but the SaaS company or vendor doesn’t know what partners are selling to whom or if they’re selling competitors’ products.” It doesn’t need to. That isn’t where its true value lies.
The large database SaaSMAX created through PartnerOptimization.com has become the foundation upon which the company is building its bridge between resellers and ISVs. It was the pivotal development in Moskowitz’s efforts, and she says it’s beginning to attract the attention of the big software companies, the bellwethers of the new IT.
When I ask Moskowitz what gap exists within the channel that traditional distributors aren’t filling, she gives me what she calls her politically correct answer. “SaaS companies should use every method possible if they’re looking to build their channel,” she says, “wherever you can sell. The recommendation from vendors is to try as many as you can as long as you can—as long as there’s no cost barrier.”
The problem, she explains, is that until very recently, traditional distributors just weren’t motivated to pivot toward the as-a-service market, where the margins are smaller than enterprise IT and the initial cost to invest can be high. “When you’re paying six figures up front, the economics are prohibitive.” Not to mention the burden of history the traditional distributors carry. Distributors are making strides toward cloud infrastructure, but Moskowitz says they’re still dealing in the traditional old ways of doing business, focused on physical hardware, licenses and financing. But when it comes to the cloud, those old processes don’t work. “Marketing, meeting resellers, efficient ways to do business—it’s all online. And it doesn’t require financing.”
Distribution for the new IT channel
Clearly, Moskowitz believes the future of distribution lies in online solutions such as the ones that SaaSMAX provides, which in many ways are very similar to those of a traditional partner program. The company still facilitates introductions between vendors and partners, but it does so through its digital WiseSaaS Plan. ISVs get monthly introductions to resellers and digital marketing help like eblasts, webinars, newsletters and social media. It provides a template for vendors to build their own online reseller portals it claims can go from zero to launch in a matter of hours. The program facilitates commission administration, provides channel micro-consulting, and even offers outsourced channel administration and infrastructure building for vendors that might not have an in-house team ready to go.
It offers similar services for partners at no charge, as well as education and certification opportunities. Most importantly, it provides verticalized bundles of solutions so partners can offer their customers end-to-end solutions. Partners that aren’t intimately familiar with the cloud can spend a lot of frustrating hours researching solutions that they may not even know exist, and Moskowitz’s goal is to make software sales channel partner-friendly.
At CompTIA’s annual ChannelCon event earlier this month, SaaSMAX announced the launch of their first partner “sub-marketplace” dedicated to comprehensive security solutions. The marketplace allows partners to create and sell security service bundles under their own brands. Resellers can incorporate their own professional services into the white label offering, and SaaSMAX will even provide a “quote to cash” billing capability to help partners navigate the sometimes tricky waters of recurring revenue streams.
Speaking of partners, Moskowitz wants to be clear that she’s not just talking about VARs and MSPs. The cloud has given rise to a slew of emerging channel partner models. “There’s a new paradigm of advisors, integrators and tech consultants focused on implementing line of business stack solutions,” she explains. “For example, SEO and Google AdWords experts sign up for us. Our customers are looking for MarCom. We don’t want to leave our core business, but we’ve found we can resell our SaaS platform to them to add value to their business.”
In other words, they’re learning as they go, just like everyone else dealing in cloud solutions. They’re just trying to pass on as much knowledge as they can as they gain it. “A lot of the challenge is that the channel is so culturally different than the SaaS sector, so part of our role is to educate SaaS vendors about the channel. They view it as an integration between each other, and it is, but we also educate them.”
But for Moskowitz, it comes down to the thrill of being on the cutting edge of a cultural shift in IT. “We’re in the middle of that emergence of the SaaS sector. It’s lot of fun.”