The cloud fundamentally changed the way that independent software vendors (ISVs) market and sell their products by emphasizing cost-effectiveness and ease of scalability. It also changed the way IT departments buy and use software.
However, we often overlook how the cloud revolution affected channel partnerships. In the era of cloud computing, if vendors and their partners don’t update their channel strategy, they risk being marginalized.
What is the current situation?
There are a variety of channel partners in the software industry, and some common types include:
- Referral partner - A referral partner is like an affiliate program, in that the partner referrers its audience to buy the vendor’s product. Referring partners generally earn commissions upon reaching a certain number or conversions (CPA) or impressions (CPM).
- Authorized or value-added reseller (VAR) - In the software industry, a VAR acquires the vendor’s solution at a discount and resells the product to their customers for a profit. The VAR will often include the program on a piece of hardware that they also sell to the consumer.
- Managed service provider (MSP) - An MSP typically has a more advanced understanding of the vendor’s product than a referral partner or a VAR. Instead of building a special department in-house, many corporations rely on MSPs to figure out the company’s IT needs. This puts MSPs in a very special position vis-a-vis the vendor and buyer: They represent the vendor’s product and act as a dedicated consultant/maintenance team to the buyer. Read the rest of this entry »
The subscription commerce economy is all the rage. According to a recent Forbes article, Dropbox earned $500 million in revenue from its paid subscribers. Software giants Microsoft and Adobe saw the writing on the wall, and in 2012, converted their classic product suites from a download perpetual license to a cloud based subscription service. Thus, Microsoft Office became Office 365 and Adobe Creative Suite is now Creative Cloud.
Recognizing this important trend, Forrester Research’s Peter Sheldon recently published a report covering the market for subscription solutions to help companies evaluate their subscription commerce needs. One of the most important parts of the report distinguishes between two competing options for those who sell subscription products: recurring billing platforms and full service digital commerce platforms.
Recurring billing platforms are simply point solutions for subscription products. These solutions primarily focus on subscription management, which is the function of managing which customer is due to be billed when and for how much.
Think, for example, of a newspaper or magazine subscription where the publisher needs to know when a subscription is expiring. The vendor either collects the annual/monthly fee or stops delivering the publication if the customer doesn’t pay by a certain date. A recurring billing platform will manage this information for the vendor, though they won’t necessarily act as the merchant of record and collect payments.
Of course, the management of subscriptions can be quite complex in the digital world. Subscriptions models used by companies like Salesforce offer customers different levels of functionality for a variety of prices per seat, per month. That in and of itself might not be too complicated to calculate, but what happens when a customer adds or cancels seats in the middle of the billing period and prices need to be prorated for partial months? In these cases, a recurring billing platform can be a very effective management tool. Read the rest of this entry »
You might think it’s a simple process to start accepting credit cards for your e-store. All you need to do is sign-up for a merchant account with your local bank and the money starts pouring in, right? In no time at all, you can be relaxing on a Caribbean beach, sipping piña coladas worry-free!
I hate to spoil your dreams, but accepting online credit card payments is quite challenging. Whether it’s the transaction fees surrounding special cash-back credit cards or complying with local sales tax, a lot of time and energy goes into setting up a full-featured shopping cart for your customers.
If you are going to implement credit cards on your own, it’s important to understand the challenges involved. Fortunately, we’ve identified seven challenges in accepting credit card payments that impact not only e-commerce, but also other departments of a business. Since these challenges are spread throughout an entire organization, it’s best to be aware of what they are and who they affect.
Challenge #1 Specialty card fees – Want to offer your customers the cash-back Discover card? What about the Mileage Plus Visa Card? Banks issue these cards to entice customers to use them wherever they shop, but merchants must understand that processing fees for these cards are typically higher than fees for other cards. Read the rest of this entry »