Tag Archives: Birst

Tis’ the Season of Revenue-Sharing

Revenue Share While companies continue to stumble through on how to partner in the world of SaaS, revenue-sharing is emerging as a popular model in monetizing strategic partnerships. Revenue-sharing for on-demand services ranges from a co-marketing and co-selling arrangement to an OEM-like relationship. RemedyForce a cloud-based ITSM solution developed on force.com, is an example of the former. Recently announced by salesforce.com and BMC, “RemedyForce is the next phase of a strategic alliance between the two companies to develop, market, and sell cloud-based IT management .” [1]  Branded as a joint offering, BMC and salesforce.com intend to provide joint sales, marketing, product certification and implementation. Besides being sold direct, RemedyForce would also be sold by partners. Except in the realm of strategic alliances, this level of multi-functional commitment is rare.

In the OEM-like model, a SaaS provider makes its software available as a ‘capability’ (or suite of capabilities) to another SaaS provider.   By integrating Birst on-demand business intelligence, with RightNow on-demand CRM, their customers benefit from advanced analysis of customer and operations data. Unlike traditional OEM licensing, where the licensee is responsible for all customer interface including first (and even second) line of support, SaaS OEM partners are interlocked at every step. As both companies’ offerings are tightly integrated as one solution that must execute flawlessly in unison, ‘licensor’ and ‘licensee’ each has an equally crucial role in ensuring uptime, performance and business continuity.

Data points to observe.  OEMs may garner revenue as a percentage, from low single digits to mid-teens, of a SaaS subscription.   Another approach is for the OEM to offer a discount off list price, very similar to the traditional licensing model. Rules for such OEM models, if any, are vague and still evolving.

Marketing Share Other SaaS providers leverage partnerships to create awareness and generate leads. Through its “Powered by GoodData” program, GoodData provides pre-built dashboards and advanced analytics to a diversity of solution providers. Zendesk, Market Metrix, Get Satisfaction and others benefit by augmenting their offerings with enhanced capabilities such as analytics for support, customer satisfaction and community health by leveraging GoodData. While this arrangement does not directly generate revenue for GoodData, it can be a powerful way of providing customer visibility, which can ultimately lead to revenue generation.

[1] salesforce.com press release, Dec. 8, 2010