SaaS Vendors Make Partners Pay The Freight

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On-demand collaboration solutions vendor BlueTie came up with a new way to pay the bills.

The company decided to stop charging customers for e-mail and calendar applications. It’s not using advertising as a revenue model, either.

Instead, BlueTie is betting that customers will make enough use of the features provided by partners to make the new approach successful.

One such feature, provided in collaboration with travel services vendor
Orbitz, lets users type their travel itineraries into their online
calendars.

The solution then suggests round-trip flights for the dates and times
indicated by the user.

Once the user approves an itinerary, the solution includes the itinerary
into a PDF version of an e-ticket.

BlueTie is integrating services like this, which it calls
“Featuretisements,” from vendors of VoIP, Web conferencing, office supply
and flower delivery services, into its e-mail and calendar application.

The company will take a percentage of revenues earned by its partners.

So far, it has named Orbitz and e-mail marketing services vendor Constant
Contact as partners, and expects to name more in the coming weeks.

The new pricing model takes effect this week.

“It’s a major bet on our part that we can add enough value,” BlueTie founder
and CEO David Koretz told internetnews.com.

A major bet perhaps, but it’s not the whole farm.

Koretz said the Rochester, N.Y.-based company has a significant business
selling its service through ISPs.

Small- and medium-sized business customers (SMBs) have been paying an
average of approximately $5 per user per month for the basic e-mail service,
which includes 5 gigabyte e-mail storage, 25 megabyte attachments, custom
domain names and virus and spam protection.

While that revenue will go away, the company will continue to charge for
certain native premium services, such as 24-hour phone support and a feature
allowing users to sync BlueTie with Microsoft Outlook.

The company will also generate rev-share income from other features, such as
yellow pages, mapping and dinner reservations that are free to the user.

Koretz said that the blended average revenue per user (ARPU) can easily
equal or exceed its current paid ARPU within 12 months.

“We wouldn’t have launched it if we didn’t have the numbers baked in,” he
said.

On-demand IT management solutions vendor Klir Technologies is also switching
to a sponsored model.

The company provides free, online performance measurement service to enable
enterprises to improve the reliability of their datacenter operations.

The service is financed by a growing array of content providers who supply
“best practice” information customers can use to implement solutions based
on the data generated by Klir’s service.

The content publishers share the revenues they earn from online ads with
Klir.

This article was first published on InternetNews.com. To read the full article, click here.