Value added resellers, or VARs, have been hesitant about adopting software-as-a-service platforms into their own portfolio of service offerings. Citing such issues as service outages, compliance regulation, mobile access and even data security, many VARs simply don’t see the benefit of SaaS in its present state. As such, the expert team with Axcient is attempting to reverse SaaS reluctance by offering an upfront cloud compensation model for enterprises that are willing to embrace their new SaaS framework.
Under the new structure, dubbed “Software-as-a-Service: Front Loaded Option,” or SaaS:FLO, Axcient is specifically targeting traditional VARs by offering upfront monetary compensation for those who partake in the sale, delivery and support of Axcient’s own Business Recovery Cloud service.
The new plan is expected to be highly beneficial to VARs who participate, as they will receive their first five months of revenue immediately following the closure of their cloud-centric sale. Under the new program, VARs can expect to receive up to two years of profit margins in advance. If a VAR sells a solution that generates $1,000 per month, for example, then Axcient will provide that VAR with an upfront sum of $5,000.
VARs who choose to participate in the program must sign a contract with Axcient for a minimum of one year. Additionally, any VAR who wishes to join must pass an extensive qualification process. Several of Axcient’s customers have already signed up for the SaaS:FLO service, and the company is expecting many new enrollments within the near future.
Justin Moore, chief executive officer of Axcient, explained how their new platform works in its simplest terms. He was quoted as saying: “What SaaS:FLO does is it basically compensates value-added resellers on a SaaS or cloud-based solution as if they were selling software or hardware. We believe that the value-added resellers play a very important role in the cloud and that to date SaaS and cloud vendors have not made it economical for traditional resellers to participate in the revenue stream that you get from a SaaS or cloud-based solution.”
In order to launch the new SaaS:FLO program, however, Axcient had to look toward investors in order to raise the necessary funds. Axcient finally launched SaaS:FLO after generating $25 million in Series E contributions. This was obtained from a number of investment firms, including Industry Ventures, Thornvest Ventures, Scale Venture Partners, Allegis Capital and Peninsula Ventures.
Their novel approach to SaaS:FLO wasn’t Axcient’s first foray into the world of SaaS. In fact, as Moore explained, their previous attempts, which were based on the traditional SaaS model, were not successful at all. He said: “We tried to take it to the VAR community a number of years ago. We failed in that we tried to impose on traditional resellers our SaaS-based retail model, which is compensated monthly. We went and tried to impose our model and force them to change their model, their business.”
While the success of SaaS:FLO has yet to be determined, nobody can challenge it’s creative approach to the concept behind software-a-service. Given the expertise of Axcient’s team, however, the future of SaaS:FLO is certainly bright.
Axcient Pioneers Upfront Cloud Compensation Platform
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