March 2016 Article

Making the Transition from On-Prem to SaaS

by Hobart Swan

Sal Patalano

CCI recently had the pleasure of doing a podcast with Sal Patalano, chief revenue officer at Lenovo Software. Prior to joining Lenovo, Patalano was VP of Marketing for CA’s global technologies organization, and VP of IBM’s software group in charge of worldwide channel transformation.

What we really like about Sal Patalano is that he’s a big thinker who, with all of his real-world experience, is able to see patterns where others just see confusion. The industry has gone from selling very large computers to PCs to software to the Internet and to mobile. Along this timeline, he says, sales people have always faced long and complicated sales cycles to get clients to see the value of on-premises solutions with their multiple-year TCOs, infrastructure modifications, and upgrades. But SaaS has changed all that.

Selling SaaS today, Patalano says, is like the old joke of how to sell a puppy: you let the family take it home overnight, and if they don’t like it they can bring it back the next day. His point? No one ever brings that puppy back. It can be the same with SaaS: Cloud-based solutions can appear instantly as part of your desktop toolkit. You can use it right away, work with it right away, and then decide (also right away) if you want to keep it. Of course, he says, with this much shorter sales cycle come some real challenges the pet store owners never had to deal with.

Unlike puppies, it’s hard to quickly build an emotional attachment to a software solution. Yes, it’s getting easier to give people a fully workable SaaS system to play with. But it’s also easier for the buyer to say no and move on to the next system. To be successful, channel partners have to get really good at articulating to the buyer the way a specific SaaS system is going to solve their particular challenges. Broad statements about benefits and TCO don’t work. As Patalano puts it, sales reps need to be able to articulate the value proposition at the customer level.

Historically, it has been a challenge for partner staff to straddle what can sometimes seem like opposing camps – sales versus marketing. But, as Patalano points out, these camps seem to be converging as the average channel sales rep gets younger and the older reps and partners retire and move on. (Listen to CCI’s podcast for more on the change of the partner sales guard.)

So here’s the conundrum: the SaaS model can mean more partner revenue, but revenue that takes time to ramp up. That means partner organizations need to use their money wisely until recurring revenues start to add up. And that means reducing the amount of salespeople on staff, and the amount of personal contact they can have with any one client. At the same time, buyers have come to expect more personalized service. So how do you both cut your investment in sales and deliver more high-touch care? Or, as Patalano puts it, how do you “make low touch feel like high touch?”

One way is by using the best of new technology, including social media, to solve the conundrum. Another is to break down the walls between sales and marketing. And it is true that only when sales reps have direct input on what goes on with the marketing side will they be able to communicate unique value propositions back to unique buyers.

Patalano takes a very methodological approach to helping channel partners adapt to SaaS selling. For him, job #1 is to have a plan. To hear more about Patalano’s nine-step plan for making the transition from selling on-premise solutions to selling SaaS solutions, tune in to CCI’s Channel Wisdom podcast.