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February 25, 2010
Kaseya has launched a global Software as a Service partner program. Known as KSP (Kaseya SaaS Partner Program), the initiative allows partners to “promote, refer and market” Kaseya’s SaaS and IT offerings to their respective channels. It’s easy to see what’s in it for Kaseya. The bigger question: What’s in it for partners? And what are the implications for the broader managed services software market? Here are some thoughts.
According to Kaseya. the KSP Program:
“includes hosted applications, access to data center experts, an uptime commitment backed by a service level agreement, customized landing pages for branding and a customer portal for billing and support. It also provides complete training on the services so partners and their channels can take full advantage of the investment. The program creates an easy way for companies to participate in the lucrative managed services sector. The ability to shift to proactive IT management creates a model for monthly recurring revenue and high gross margins for the partner and their channels.”
Those are lofty marketing claims. No doubt, SaaS has some key opportunities. But there are also numerous challenges which I explore a bit more below.
Potential KSP partners need to have a customer or service provider community of at least 3,500.
Also, sources say all of the KSP partners basically receive the same SaaS pricing and recurring model from Kaseya.
How much money can KSP partners make? It’s difficult for me to pin down that info. But multiple sources say the KSP program involves a recurring revenue model for partners.
Also, I asked multiple sources if the KSP revenue share to partners is better than the current Google Apps reseller program — which only delivers $10 per user per year to the VAR/reseller. All of the sources indicated that the KSP revenue share to partners was dramatically stronger than Google’s current approach. I chose Google Apps as a competitive example because it shows just how low SaaS pricing can go.
I believe in SaaS, but I don’t want to paint all SaaS partner programs as perpetual money makers for MSPs. I certainly understand the KSP upside for Kaseya. But I also think KSP partners need to be careful about maintaining brand identity and customer relationships while referring VARs and MSPs into Kaseya’s cloud.
Kaseya seems to be aware of that partner challenge. Take a look at Ingram’s participation in the KSP partner program, and you’ll see the following branding: Ingram Micro IT Toolkit, Powered by Kaseya.
IT Toolkit is one of three SaaS-oriented products Kaseya introduced as part of the recent Kaseya 2 launch.
No doubt, some of the initial KSP program members have been striving to reinvent themselves in recent years.
Two prime examples: The ASCII Group has been trying to push beyond its legacy with traditional reseller education, launching a range of online services for program members. Also, Jamcracker has been trying to strengthen its brand in the managed services market — but some of the company’s early MSP industry relationships have been hit-and-miss, in my personal opinion.
So ultimately: The KSP partner program initially includes some big names, but it also includes transitional companies that are trying to figure out their role in the world of SaaS and cloud computing.
So how will the KSP partner program work? Some clues are emerging in Australia, where Kaseya and Ingram Micro are partnering to “provide SaaS-based tools to Ingram’s channel partners.”
According to a prepared statement:
“The tools, which offer pay-as-you go pricing and rapid deployment, help IT service companies avoid the hassle and cost of investing in hardware and software, reduce on-site visits and increase recurring revenue. The partnership will empower more of Ingram’s 6,000 active partners in ANZ to shift to proactive IT management, creating a model for monthly recurring revenue and high gross margins.”
In the Kaseya-Ingram example, I think it’s easy to see the potential win-win-win scenario: Kaseya gets a SaaS distribution pipeline into Australia and New Zealand; Ingram expands beyond traditional on-premise products to help its reseller base explore and potentially embrace SaaS; and VARs leverage an existing relationship (Ingram) to learn more about the cloud.
Still, there are risks even for Ingram. In North America, the Ingram Micro Seismic team has built a pretty loyal following of VARs and MSPs. The Seismic team has also built MSP-oriented software partnerships with Level Platforms and Nimsoft. As Ingram looks to take managed services and SaaS strategies global, it will need to balance and coordinate the Seismic division’s efforts with the company’s corporate partnerships (Kaseya, etc.).
There are other potential win-win scenarios. Rich Forsen, president of Network Depot, says the KSP partner program frees up Virtual Administrator to focus on MSP training, support and other services — rather than maintaining back-end Kaseya systems for peer MSPs.
Another big question: How does Kaseya plan to take SaaS global? I realize numerous companies in the MSP space already have global SaaS capabilities. But broadband service varies from country to country, and town to town.
When I was in Australia for a Kaseya-hosted managed services road show in 2008, I heard from multiple MSPs that the country wasn’t quite ready for SaaS-oriented deployments because of spotty broadband. Tim Dickinson, regional director for Kaseya Australia and New Zealand, and I spoke numerous times during that 2008 road show about North America’s lead in the SaaS market, and remaining questions about SaaS in Australia.
Fast forward to June 2009. In an interview with MSPmentor, Kaseya CEO Gerald Blackie said Kaseya’s SaaS efforts would leverage Amazon’s Elastic Compute Cloud (EC2). Now, the present: I checked in with Kaseya’s Dickinson yesterday and he confirmed EC2 plays a central role in the Kaseya Australia SaaS efforts. In an email to me, Dickinson wrote:
“We use Amazon (EC2) and have tested it world-wide, zero latency ! We love Amazon!
Ingram Micro IT Toolkit is built on the Amazon Elastic Compute Cloud (Amazon EC2). This tier-1 global footprint offers the highest standards of security, availability and power offered in the market today. Amazon EC2 offers a highly reliable environment where replacement instances can be rapidly and predictably commissioned. The service runs within Amazon’s proven network infrastructure and datacenters. Amazon EC2 is certified as PCI DSS compliant and meets SAS 70 Type II requirements essential for companies subject to Sarbanes-Oxley, HIPAA and GLBA.
So, Amazon helped Kaseya to take its new SaaS offerings global.
No doubt, many of Kaseya’s rivals already offer a mix of on-premises and SaaS-based solutions. So it’s not as if Kaseya is first-to-market with SaaS.
Still, the stakes are getting higher — especially for those that move into SaaS-oriented partner programs. You’ve got to somehow build and maintain your own brand, even while you ultimately refer VARs, MSPs and/or customers into another company’s cloud.
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