2011 – A year of tremendous expansion in how we serve our Software and SaaS customers

When I end a year, I like to take a moment to step back and appreciate what we accomplished.  2011 has been an incredibly exciting year for Avangate.

We launched our new SkyCommerce Suite, expanded our overall service with close to 1.000 new features and enhancements, delivered new marketing and optimization services, and extended our global presence with new team members and offices, including our new North American headquarters in Redwood Shores, California.  All of this with the aim of helping our customers sell more software through any channel and any model.

It is not too surprising that the software market continues to grow as software plays an increasingly important role in our world (see Andresseen’s view on how “Software is Eating the World“).  More interestingly is the massive shift in how software is being distributed and sold.   The market size of ESD and SaaS will grow from $45Bln to over $120Bln by 2014.  The 3TS Cisco Growth Fund recognized this opportunity with a $6 million investment in Avangate in March of this year, accelerating our growth and strengthening our global presence.

We’ve been honored to serve this market – we participated in, sponsored or organized over fourteen events this year to network, share ideas, and help our customers grow their businesses.  We now have over 2,000 clients, from some of the largest vendors of consumer software titles, such as Bitdefender and Kaspersky, to SaaS vendors including Terapeak and TeamLab.

In addition, our affiliate network has grown to over 27,000 software members – Majorgeeks, Siliconaction.com.br and TopTenServices.net are three power affiliates that joined in 2011.  I’m incredibly proud of the Avangate team for continuing to deliver a mature platform with the scale and flexibility to serve shareware, mid-market, and enterprise software and SaaS companies.  What’s more, we are honored to be recognized in Forrester’s recent report on Solutions For Digital Commerce.

2012 – Prediction, Cloudy with a Chance of Significant Growth

The cloud is not a new concept, but we see this trend accelerating to dominate future initiatives (8 out of 10 new software start-ups are SaaS). The software market will only continue to be driven and disrupted by the rise of the cloud.

What does this boil down to? I particularly liked a blog post by Louis Columbus talking about “stripping away the hype by asking how these technologies [analytics, big data and cloud computing] contribute to excellent customer experiences and greater customer engagement.  Those are the real catalysts of market growth and the greatest disruptive forces at work in enterprise software today.”

While there are many predictions for 2012 (many articles are mentioning growth for next year which is good news – here’s one example about the antivirus sub-vertical; and also check out this Boxing Day treat by Ray Wang), let us spotlight one that is specifically apt for software companies: the transition from systems of transaction to systems of engagements and experience.

Software: engagement across the lifecycle

We feel this is important and has many implications for a software company. As many ISVs transition from perpetual to pay-as-you-go models such as freemium, rental, or subscription, they need to also experiment with new partners and affiliates and manage sales worldwide through any channel, online and offline.  The challenge is to do this while providing a flexible and frictionless customer experience across the software lifecycle. We have focused on this in 2011 with our integrated SkyCommerce solution and are continuing this focus into 2012.

Software companies need to have the platform to effectively engage and create the right experiences for their customers and need to be able to do it in a way that complements, and not alienates, the resellers which still make up over 50% of software sales today.

Likewise, software resellers and distributors need to be able to take advantage of these industry shifts, continue to increasingly migrate their businesses online and focus on emerging trends, such as aggregating cloud services.

Meet with us

Stay tuned for new and exciting things we’ve planned for 2012. To start with, meet the team at the first industry event we’re attending next year: Affiliate Summit West, January 8-10, Las Vegas, USA.

Happy 2012 and best wishes from all of us here at Avangate!

P.S. Your point of view for 2012?

We would love to hear what you think are some of the key trends that will drive your sales in 2012. We will continue to build upon these issues into the New Year on this blog and look forward to continuing the conversation!

Indirect sales channels have always been attractive to companies seeking to augment their sales force, increase market share, remain competitive, and keep in-house employees focused on product development. The traditional downside was loss of insight into customers, fractured pipelines, missed opportunities, diluted branding, and market share cannibalism.

Contemporary technologies and best practices now allow companies to manage not only their partner relationships but partner operations as well, supporting them with proven go-to-market strategies that increase lead-to-win ratios. Will this technology remove the limitations on successful partner relationships? If so, how quickly will each side be willing to adopt?

To find answers to these questions and see how your experiences in partner relationship management and adoption of best practices and technologies compare with those of your peers, read on.

Avangate has partnered with Aberdeen Group, who is conducting a study on “Partner Relationship Management: Channeling Better Sales Results”.  This study will provide recommendations for channel sales managers and partners to work together to achieve higher top-line revenue and greater market share.

To thank you for taking 15-20 minutes to answer this survey, Aberdeen will provide you with a complimentary copy of the final report, which is expected to be available after February 29th, 2012. Here is the link to the survey: www.aberdeen.com/survey/0403-Avangate/

Do not worry, individual responses will be kept strictly confidential, and data will only be used in aggregate.

Software Channel Survey Results - download now!

As you know, we’ve done a survey on how the crisis is impacting the channel distribution in the software industry. We’ve looked at the results and – although not statistically representative (survey conducted on the internet on a self-selected sample)-, they make an interesting reading, showing some trends and providing tips & solutions for channel challenges.

Frankly, I was (pleasantly) surprised to see how much weight both ISVs and resellers give to joint marketing programs, measuring, efficiency, communication…  obviously no one can afford to pay lip service to these actions, they are for real.

Encouragingly enough, vendors and resellers acknowledge the same top channel challenges and consider similar solutions for tackling problems.

What do affiliates mainly need? I think you’ll agree with me that this is a question with many possible responses. But, as you will see, there’s one thing it really matters to affiliates and that is the involvement of the software vendors.

In April 2009 we did our annual Avangate Affiliate Survey and we got interesting feedback from our affiliates. Here are the main conclusions that stand out from the survey from the publishers’ point of view:

• The affiliates think that more discount coupons from the software vendors would help them sell more;
• They find it rather difficult to cope with the fact that some of the software vendors aren’t more helpful – offering unattractive affiliate commissions, lack of marketing materials, no commissioning schemes to stimulate competition.

The Intel® Business Exchange Software Store in Europe has just been launched, bringing a new sales channel for selling software to European countries – with localized sites for the UK, Germany,  and France (official launch to follow by the end of the month). Good news.

We are, of course, proud to boast that Avangate provides the hosting, billing and process execution of the new market place… that the Avangate eCommerce platform is the core engine of the European Intel® Business Exchange… More good news.

Focused on SMBs
Yes, indeed, Intel ® BX is focused on SMBs – providing an advantage for this market. Why was there a need for this? Because SMBs often struggle to find technology products, services and support that fit their particular budgets and needs. The Intel ® BX Software Store helps them quickly and efficiently find the software solution they need to help implement business solutions. That’s why the store features extensive product details and facilitates customer ratings and reviews.

A recession is a good time to sit back and analyze your go to market strategy and, part of this, to think about going international, online or through a reseller network. You may be already selling internationally in same language markets/through a few reseller partners – now is a good time to expand.

So why is it good to go international NOW?

• Spread risk (don’t put all eggs in one basket).
• Increase market base (there’s a variety of markets out there, from small to large software markets in both established and emerging economies. Not to mention that an increasing online population makes it easier than ever before to sell software online).
• Increase revenue.

Let’s dwell on this last point for a bit. When it comes to building a partner network, you need to start right about now to be fully up to speed when the recession is over and things start booming again. It doesn’t mean that you wouldn’t get anything out of your channel during the recession (that’s not a promise either), but in general you have to be ready to support it for at least 6 months without seeing much return.