Has a SaaS product company ever acquired a rival’s reseller? Is this possible?

A lot of this stuff used to make much more sense in the on-prem / pre-SaaS world.

Even better than buying a reseller was buying a company that provided support and services for on-prem software … the cash cow annuity.

There were many wars here:

Oracle, SAP settle long-running TomorrowNow lawsuit

But in SaaS, first, lower margin support & services is a cost center, not a profit center.  So most SaaS companies prefer to outsource as much of this as they can anyway (e.g., Salesforce helping to start Appirio).

And resellers have a very diminished role in SaaS where software is not installed and delivered straight to the browser.  Instead, “Cloud Consultants”, the Next-Gen SIs, have been reborn as the new VARs.  Delivering Worday or Salesforce is simple.  Deploying it remains very complex.

So we are seeing a lot of SaaS SI M&A and consolidation now, e.g. IBM just buying Salesforce SI Bluewolf for $200m+ IBM to Acquire Cloud Consulting Firm Bluewolf for About $200 Million

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Published on April 19, 2016

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