In the past year or so, just about every provider of on-premise software has shifted their focus from traditional resellers to developers that invoke their software as a service using application programming interfaces (APIs).
For many traditional resellers that shift is perplexing. After all, software installed on premise usually costs thousands of dollars. In contrast, developers typically only want to part with a couple hundred dollars if the vendor is lucky. The difference is that there are thousands of developers, but there may only be hundreds of customers willing to fork over hundreds of thousands of dollars for an enterprise license.
None of this means that software vendors are walking away from enterprise licensing of software that might be installed on premise or in a third-party private cloud. But by making their software available as a cloud service they are trying to, first, generate revenue they might not otherwise see and, secondly, seed the market for the potential sale of future enterprise licenses.
Creating an IT ecosystem
Case in point is Hexagon, a provider of geospatial database technologies. Hexagon is not only making its software available as a service, it is working with AppDirect to create an online marketplace through which third-party developers can market their applications with sales and marketing help from Hexagon.
Speaking at an AppDirect Engage 2016 conference this week, Kenyon Waugh, executive technical director for Hexagon, told attendees that educating developers about location-based services they can include in their applications using a geospatial database is a core part of the company’s overall go-to-market strategy.
Of course, at some point a few of those developers will reach a level of success where it makes more financial sense to deploy Hexagon software inside their own data center. That decision should then create a number of opportunities for traditional Hexagon channel partners that would never have existed if it wasn’t for developers having a lower cost point of entry to the Hexagon software.
Embracing multiple paths to market
In essence, software vendors are trying to create a virtuous cycle across multiple types of channel partners. It may take a while for those efforts to pay off, but the odds of ultimate success are much higher for software vendors that focus their time and energy on creating a true ecosystem spanning everything from developers and integrators to managed service providers and traditional resellers.
In some cases, an IT service provider may have embraced all those functions. More often than not, a developer has little to no interest in how the software they use is actually deployed. But, if a reseller stays close to those developers, the insight they can gain into how different types of application workloads perform in different IT infrastructure scenarios can be priceless.
In the meantime, it’s worth noting that the IT channel as a whole is actually getting bigger rather than smaller. The types of partners that make up the channel ecosystem now include a much broader range of IT services companies that go well beyond the classic resellers that served as the original foundation of the traditional channel. The real issue now is how to employ new means to make more technology than ever as broadly accessible as possible.