SaaS stands for Software as a Service. It is a cloud computing model in which software applications are provided and delivered over the internet as a service to users. In a SaaS model, users do not need to install or maintain the software on their local devices or servers. Instead, they can access and use the software through a web browser or a dedicated interface.
In a SaaS arrangement, the software provider hosts and manages the infrastructure, databases, and applications required to deliver the software service to customers. Customers typically pay a subscription fee to access and use the software on a pay-as-you-go basis. The software is centrally maintained and updated by the provider, ensuring that customers have access to the latest features and security patches without the need for manual installations or upgrades.
SaaS offers several advantages over traditional software models. It eliminates the need for customers to purchase and maintain costly hardware or software infrastructure. It also provides flexibility in terms of scalability, as customers can easily adjust their usage and scale up or down based on their needs. SaaS applications are typically accessible from any device with an internet connection, enabling users to work from anywhere.
Examples of popular SaaS applications include customer relationship management (CRM) systems like Salesforce, productivity suites like Google Workspace and Microsoft Office 365, project management tools like Trello, and communication platforms like Slack.
The Growth of the SaaS Market
The SaaS market has experienced significant growth over the past decade and continues to expand at a rapid pace. While I can provide information based on data up until my last knowledge update in September 2021, I can give you an overview of the market trends up to that point.
According to various reports and market research, the SaaS market has consistently exhibited strong growth and is projected to continue its upward trajectory in the coming years. Factors contributing to this growth include the increasing adoption of cloud computing, the demand for cost-effective and scalable software solutions, and the shift towards subscription-based models.
In 2020, the global SaaS market was estimated to be worth around $157 billion. It is projected to reach a market value of over $436 billion by 2025, growing at a compound annual growth rate (CAGR) of around 22%. These numbers highlight the substantial growth potential of the SaaS industry.
The COVID-19 pandemic has also had a significant impact on the SaaS market. As businesses and organizations shifted to remote work arrangements, the demand for cloud-based software solutions surged. SaaS applications became vital for enabling collaboration, communication, and remote access to essential business tools and data.
Furthermore, the SaaS market has witnessed increased diversification in terms of the types of applications and industries it serves. While SaaS initially gained traction in areas such as customer relationship management (CRM) and productivity tools, it has expanded to various sectors, including learning management, human resources, finance, project management, analytics, and more.
The SaaS market has also seen the emergence of specialized niche solutions targeting specific industries or business functions. This trend reflects the growing need for tailored software solutions that cater to the unique requirements of different sectors.
What is a SaaS Reseller?
A SaaS reseller, also known as a SaaS distributor or SaaS partner, is a company or individual that sells software as a service (SaaS) solutions developed by other software providers. Instead of developing their own software products, SaaS resellers focus on marketing, selling, and supporting software solutions created by established SaaS vendors.
As a SaaS reseller, your role is to act as an intermediary between the SaaS vendor and the end customers. You enter into a partnership or reseller agreement with the SaaS provider, which grants you the right to sell their software products to customers under certain terms and conditions.
The responsibilities of a SaaS reseller typically include:
Sales and Marketing
Promoting and selling the SaaS products to potential customers. This involves creating marketing campaigns, generating leads, conducting product demonstrations, and negotiating contracts with customers.
Customer Acquisition
Finding and onboarding new customers for the SaaS vendor's products. This can involve lead generation, prospecting, and conducting sales presentations to showcase the benefits of the software solutions.
Customer Support
Providing customer support services, including answering product-related queries, assisting with onboarding and implementation, and troubleshooting technical issues. This ensures that customers have a positive experience with the software and receive adequate support throughout their subscription.
Billing and Invoicing
Managing the billing and invoicing process for customers. Some SaaS resellers handle the billing themselves, while others may rely on the SaaS vendor to handle the billing and invoicing directly with the customers.
Value-Added Services
Offering additional services such as consulting, training, customization, integration, and ongoing support to enhance the value proposition for customers. These services can differentiate the reseller from competitors and provide additional revenue opportunities.
Relationship Management
Building and maintaining strong relationships with both the SaaS vendor and the customers. This includes regular communication with the SaaS vendor to stay updated on product developments and collaborating with customers to understand their evolving needs and provide appropriate solutions.
SaaS resellers often operate within specific industries or target niche markets where they have expertise or established networks. They leverage their industry knowledge and customer relationships to effectively market and sell the SaaS products.
It's important to note that the specific responsibilities and arrangements between SaaS resellers and vendors can vary. The terms and conditions of the reseller agreement, revenue sharing models, and level of support provided by the SaaS vendor can differ from one partnership to another.
How to Find the Right SaaS Products to Resell
Finding the right SaaS products to resell requires careful consideration and research. Here are ten steps to help you identify and select the most suitable SaaS products for your reselling business:
Identify your target market: Determine the industry or niche you want to focus on as a SaaS reseller. Consider your existing network, expertise, and the needs of potential customers in that market. Understanding your target market will guide you in selecting SaaS products that align with their specific requirements.
Research market trends: Stay informed about the latest trends and developments in the SaaS market. Analyze industry reports, market research, and technology publications to identify emerging SaaS solutions and popular categories. This will help you identify areas of high demand and potential growth.
Evaluate customer needs: Conduct thorough market research to understand the pain points, challenges, and requirements of your target customers. Engage with potential clients, conduct surveys or interviews, and analyze competitor offerings to gain insights into what customers are looking for in SaaS solutions.
Assess product fit: Evaluate the features, functionality, and scalability of SaaS products. Consider how well they align with your target market's needs and whether they provide a compelling solution. Look for products that offer a competitive advantage, have a strong value proposition, and are user-friendly.
Consider the vendor's reputation and reliability: Research the SaaS vendors behind the products you are considering. Evaluate their track record, reputation, and financial stability. Look for vendors with a history of delivering reliable and well-supported software solutions. Check customer reviews, testimonials, and case studies to gauge user satisfaction and the quality of support provided.
Analyze pricing and revenue potential: Assess the pricing structure and revenue potential of the SaaS products. Consider factors such as the cost of the product, the potential market demand, and the competitive landscape. Evaluate whether the pricing model aligns with your business goals and whether it offers a suitable margin for profitability as a reseller.
Test the product: Whenever possible, request access to trial versions or demos of the SaaS products you are considering. Test the software firsthand to assess its usability, performance, and overall user experience. This will help you determine if the product meets your quality standards and if it will resonate with your customers.
Evaluate vendor support and partnership opportunities: Assess the level of support and resources provided by the SaaS vendors to their resellers. Look for vendors that offer training programs, marketing materials, sales support, and ongoing technical assistance. A strong partnership with the vendor can enhance your reselling capabilities and improve your ability to serve customers.
Seek feedback from potential customers: Engage with your target customers and seek their feedback on the SaaS products you are considering. Ask for their opinion on the features, value, and relevance of the solutions. This feedback can provide valuable insights and help you make an informed decision.
Start with a focused portfolio: Instead of trying to resell a wide range of products, consider starting with a focused portfolio of a few high-quality SaaS products. This allows you to specialize, become knowledgeable about the products, and effectively market and support them.
By following these steps, you can identify SaaS products that meet the needs of your target market, align with your business goals, and offer potential for successful reselling. It's essential to invest time and effort in the evaluation process to ensure that the products you choose have the best chances of success in the market you are targeting.
About LMS Portals
At LMS Portals, we provide our clients and reseller partners with a SaaS-based, multi-tenant learning management system that allows you to launch a dedicated training environment (a portal) for each of your unique audiences.
The system includes built-in, SCORM-compliant course authoring software that enables most anyone to build engaging courses quickly and easily.
We also offer a complete library of ready-made courses, covering most every aspect of corporate training and employee development.
If you choose to, you can create Learning Paths to deliver courses in a logical progression and add structure to your training program. The system also supports Virtual Instructor-Led Training (VILT) and provides tools for social learning.
Together, these features make the LMS Portals platform the ideal solution for our SaaS reseller partners.
Contact us today to get started or visit our Partner Program pages