Just in time for the third part of my Silo Busting Trilogy (don’t be confused by the 4, the first post was just an overview) Sarah Lacy published her fantastic article On Demand Computing: A Brutal Slog.  (Sara, thanks for the set-up.  Let me know how I can return the favor.)

For those without the patience to read her prose, Sarah basically says, the world is going to On Demand but selling this stuff is really, really hard.  CEO’s are flying all over the place trying to get deals done.

The natural reaction might be, isn’t this the case with traditional software as well?  It is for big deals, but smaller deals (still the majority of SaaS sales) are done through the channel.   The network of channels for traditional ISV’s is huge, from local Mom and Pop VARs, to huge resellers such as CDW, to the big integrators like Accenture.  Unfortunately none of these organizations does much for SaaS (seems like they are as addicted to up-front revenue as the traditional ISV’s.)

Fortunately we are seeing a next generation of integrators focused on integrating SaaS products.  Companies such as Astadia, BlueWolf, and Appirio have built burgeoning business’s around SaaS application cusotmization and integration.  Problem is that most of the focuse has still been around integration SalesForce.com.

That’s where web services come in.  By insuring you have a good web services interface you allow your app to be integrated in to these solutions by these next generation integrators.  This opens whole new channels (admittedly small right now, but growing like the rest of SaaS.)   Integrators can either use your software as a platform in which to develop custom apps, or more likely, integrate your app as part of a custom solution for a specific company or vertical.

Beyond the SI play, there is the ability to integrate your app in other SaaS applications allowing them do the hard work of sales while you grow every time they get a new customer.  Intacct software has done just that with RealPage.  Intacct is a critical component of RealPage, providing the underlying financial package that is part of RealPage apartment management solution.  Now every time RealPage signs up a new apartment building, Intacct get’s a new customer.

Now that’s a great way to stay off the plane.