SaaS Vendor Partner Program Lets SPs Take The Lead

An increasing number of vendors now deliver their software as a service and that's left many VARs and solution providers struggling to figure out just how they fit into the software-as-a-service world. In many cases vendors supply their hosted applications directly to customers and handle sales, billing and other customer-management tasks, leaving solution providers to play a reduced subcontractor role in service and support.

San Jose-based Intacct, a supplier of on-demand accounting and financial management applications, launched the Intacct Business Solution Provider partner program earlier this month. The company already has a few channel partners that have completed training and certification requirements and are actively selling Intacct's services, while another dozen are in contract negotiations, said Jerry Jalaba, Intacct sales vice president.

"They own the relationship directly," said Jalaba, who joined Intacct in January from Postini, a developer of on-demand communications security solutions that Google acquired in September for $625 million.

Under the Intacct partner program solution providers will sell and implement Intacct on-demand software either as standalone applications or linked to other applications such as CRM or human resource management systems, according to the company. They will also manage the contract with the customer and handle the billing -- essentially buying the application service from Intacct and providing it to their customers.

Intacct is offering solution providers "generous discounts" on subscription fees that partners can earn healthy margins on, according to the company. The discount applies throughout the life of the client's subscription. Some SaaS vendors only offer a commission on the first-year subscription fee.

"You want to control that billing, that relationship with the customer," said Patrick Monahan, president of Iron Cove Solutions, a Los Angeles-based solution provider that has joined the Intacct partner program. That isn't possible with software-as-a-service vendors that maintain the contractual and billing relationship with customers. "At the end of the day they still hold the purse strings," Monahan said.

Iron Cove has been providing clients with on-demand security solutions and Monahan wants to expand into new areas like financial applications. "They're providing a platform that allows me to sell more to my customers," he said. Noting that he already has some 300 clients, he said: "It's going to get me a lot of leverage into these companies."

Intacct provides a deal registration portal to help avoid channel conflict, according to Jalaba, and Intacct sales representatives will be paid incentives to work with channel partners. Sales representatives are already pulling into deals channel partners with expertise in specific vertical industries and business processes, he added. "We're working on a couple of opportunities like that now," Jalaba said. "It seems to be very collaborative in both directions."

The partner program also provides implementation training and certification and Intacct engineers shadow new partners during their first couple of projects.

Intacct will especially rely on channel partners for sales into small and midsize businesses with between 20 and 500 employees. Given that many solution providers have existing relationships with customers, Jalaba said he expects the channel program to cut Intacct's sales cycle below its current 45 to 90 days.

Before now Intacct sold some of its services through OEMs that use the accounting service to underpin broader services, such as real estate and assisted-living facility management applications, and some accountants that offer Intacct along with their accounting services. But the new program marks a significant expansion of the company's channel efforts.

"Ideally, my goal is to have a few hundred [partners] by the end of next year," Jalaba said. Intacct expects to generate about half of its sales through the channel by the end of 2009 with that number expanding to 75 to 80 percent of all business in future years.