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SaaS companies have a variety of distribution models available for their products, and they choose to use them based on their market or business objectives. One of the most common methods is distributing through partners: a situation where a SaaS company decides to distribute through partner companies like consultants and value-added resellers (VARs). This model allows SaaS companies to leverage their sales and marketing capabilities of their partners and reach wider audiences.
Of course, some companies sell directly through their portal, so you can just sign up, try the product, and pay once you’re ready. In some cases, you’ll see some kind of combination between this model and other distribution methods. In this article, we will focus on the resellers model: what kind of examples exist for this model in the market, and why it can be beneficial for you.
Partners generally fall into one of two categories: resellers and managed service providers (MSP). The common thread is that they both serve other clients by offering different types of SaaS to accommodate their needs.
The differences start once the sale is made.
While MSPs provide ongoing support and manage the product or service for their customers, resellers usually end the relationship after the sale. In the context of software-as-a-service (SaaS), resellers are companies that sell SaaS products to the end customers. MSPs usually fall into a further two categories: MSP – Managed Service Providers, and MSSP – Managed Security Service Providers.
A Managed Service Provider (MSP) is a company that provides different services to businesses or organizations. MSPs usually charge a monthly or annual fee for their services, which can be more cost-effective than hiring an in-house IT team. In other cases, MSPs provide a singular IT solution that includes hardware, software, and support, allowing their clients to focus on their core business activities without worrying about IT issues.
A Managed Security Service Provider (MSSP) is a company that provides outsourced security services to organizations. MSSPs use their expertise in security to manage and monitor the security of their clients IT infrastructure and data, in order to identify and respond to security threats and prevent security breaches. MSSPs offer a range of services, including Security Operations Center (SOC) services and Compliance Management. For example, some of the more common security software, anti-virus software, is almost entirely sold through MSSPs.
So why would a client choose to buy software, service, or a SaaS product from a reseller or MSP, and not do it in-house? First, the client might not be able to choose the right product and configure it properly, so it would prefer to hire a company to do those tasks for them. In the B2B world, expertise is everything, and resellers or MSPs often have expertise in a specific industry or technology. Hence, they can provide valuable insights and advice on how to use the software to achieve the clients specific business goals.
Another common reason is personalization. Resellers or MSPs can help personalize software, offering more help than the original vendor could.
In addition, resellers and MSPs can offer competitive pricing and cost savings to clients, as they often purchase software in bulk from the vendor and can pass on the savings to their clients. Resellers and MSPs can also provide a convenient one-stop-shop for clients to purchase bundles of software.
So, now that we understand what resellers and MSPs are, let’s deep dive into the characteristics of companies that sell through resellers, also known as indirect sales companies.
Aside from losing some control over the sales process, companies that sell through partners face another major challenge. They now need to provide user management capabilities to a whole new set of users beyond their own. The partners also need a place to manage their accounts.
More specifically, partners will need to see a list of accounts they operate and manage their users, permissions, subscriptions, and much more. Maintaining capabilities like those introduces a whole new level of multi-tenancy. A basic multi-tenant architecture just isn’t enough in that situation. It requires what we call a hierarchy-based tenant management, and it could get quite complex.
Building a fully functional partner portal, where partners can do everything they need to do on their own is no trivial task and the decision to build it shouldn’t be taken lightly.
Fortunately for you, as part of its powerful and self-served B2B user management platform, Frontegg supports a “reseller mode” that allows SaaS companies that sell through MSP or MSSPs to plug-in hierarchical, multi-tenancy controls into their product.
Frontegg provides a powerful and secure infrastructure that enables SaaS companies to sell their products through resellers. The result for you? Significantly leveraging their sales and marketing capabilities, letting you reach bigger and better customers.
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