Why would anyone buy a B2B SaaS product from a VAR (value-added reseller) rather than direct from the vendor? This is something I’ve been grappling with for two good reasons; Firstly, my own business uses SaaS solutions for all sorts of non-core, yet still crucial, business processes. Our accounting, CRM, email, file-storage and HR processes, amongst others, are all underpinned by various SaaS products. I’ve a huge vested interest in getting the best value from these ongoing investments. Secondly, my business itself is a VAR for a SaaS product. If I can’t articulate the benefit, I don’t deserve to be in the game.
Thinking of the products we’ve bought into, my answer has to be nuanced. Sometimes it makes sense to go direct, sometimes it makes sense to go with a VAR. I think of it like this: The closer your requirements are to the vendor’s standard use-case, the weaker the case for a VAR. There is nothing remotely unusual about the way I use my accounting, email or HR packages. I’m not integrating them with any other system. I’m entirely happy with the level of look and feel customisation I can do myself. The software is straightforward enough I can do everything I need to without training or guidance. So, the only reasons I would go with a VAR would be if they could beat the direct sales force on price (unlikely, but sometimes possible), or if I needed to contract in a particular currency, or with a legal entity in a named geography, and the direct sales operation were not set-up to support that.
However, once you get a little further away from the providers’ standard use-case scenario, or the closer the service is to a genuine core or customer-facing function in your business, the case for using a VAR begins to swing back in their favour.
- Do you have complexities of integrating with other systems?
- Do you want different payment terms to those that may be offered by the vendor directly?
- Do you have concerns about training your team to administer the product?
- Even if fully trained, do you have concerns about the capacity of your team to administer the product? Does this create an opportunity cost in time against their primary role?
- Do you want to customise the product’s look, feel or even functionality beyond the standard offering?
- Do you want a partner who has the time to more deeply understand your individual business, available resources and unique success criteria and then best mould the solution to reflect them?
- All SaaS products evolve over time. Do you have the headspace to think through how the product roadmap and future releases will introduce both risks and opportunities to your solution. Do you fear not having the bandwidth to spot and plan for these?
- Do you need support in bridging the gap between what the SaaS product delivers, and the manual and people factors outside the software that link together and make your overall business tick?
Answer yes to any of the above, and it is certainly worth thinking about a VAR. In our case, our CRM software could have been bought off-the-shelf, but we also needed guidance on process changes – ideas for content marketing, and an implementation strategy tailored to our business. These things wouldn’t have been well served by the generic online self-help, or the standard installation package from our chosen CRM vendor. With only a marginal uplift in initial cost, a VAR offered the opportunity to get a deeper level of tailored implementation support. This went beyond just a CRM implementation, and became a whole re-engineering of our end-to-end marketing, sales and customer success processes that happened to leverage a particular CRM tool we had our eye on. So for us, when looking at CRMs, a VAR was absolutely worth talking too.
Before I started my business, I used to work on big change management projects, often revolving around IT solutions for large, complex, multi-national organisations. We had a saying that change was all about getting all three components of people, process and technology right. Any project that focussed on the technology, but neglected the people and process, was doomed to fail. Buying a SaaS solution will often nail the technology part, but if you want to release the full benefits of the solution you need to get the supporting people and processes right too. This is where an experienced VAR puts the ‘V’ for ‘Value’ into the acronym.