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September 2013

Compensating channel partners in the cloud computing era

The cloud fundamentally changed the way that independent software vendors (ISVs) market and sell their products by emphasising cost-effectiveness and ease of scalability. It also changed the way IT departments buy and use software. However, we often overlook how the cloud revolution affected channel partnerships. In the era of cloud computing, if vendors and their partners don’t update their channel strategy, they risk being marginalised. What is the current situation? There are a variety of channel partners in the software industry, and some common types include: Referral partner - A referral partner is like an affiliate program, in that the partner referrers its audience to buy the vendor’s product. Referring partners generally earn commissions upon reaching a certain number or conversions (CPA) or impressions (CPM). Authorised or value-added reseller (VAR) - In the software industry, a VAR acquires the vendor’s solution at a discount and resells the product to their customers for a profit. The VAR will often include the ...

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