Earlier this week, we covered Vendasta‘s C$40 million venture round, which was a major milestone for the Saskatoon-based SaaS company.
One thread from our discussion with CEO Brendan King involved the new language Vendasta is using to describe its resellers, and more importantly, what it says about the type of company it is pursuing to sell its SaaS platform to small businesses. Rather than calling them “resellers”, Vendasta has adopted the term “cloud brokers”.
Vendasta’s platform allows small businesses to do everything from managing online listings and reputation to running digital marketing campaigns to handling back-office tasks like payroll and accounting. Vendasta does this through a combination of its own software and third-party solutions available through its marketplace.
As Brendan explains in the video clip below, the term “cloud broker” emerged from the MSP (managed service providers) space and refers to companies that help businesses source and manage cloud-based software. Vendasta envisions a similar role for all of the companies that resell its platform.
“We used to say media companies and agencies because that was the space we were playing in. Now it is accounting firms, banks, ISPs telecoms VARs, MSPs,” Brendan explains. “Cloud brokers covers all of that.”
Frankly, we see this notion making sense across not just for Vendasta but across the SMB space, where more companies are selling SaaS-based products that increasingly are spanning marketing and back-office functions.
Just in the past week, my colleague Neal Polachek wrote about how banks are seeing the writing on the wall and morphing into “banking as a service” platforms in order to meet more of the needs of small businesses.
And we have long been seeing legacy companies in the local space rebrand themselves in order to make it easier to better position themselves to sell whatever they are selling. The most recent example is DexYP’s recent decision to adopt Thryv, which began as a product name, as its corporate brand.
In recent years, publishers preferred to be thought of as “digital agencies” so they could credibly offer a suite of marketing solutions across presence, reputation, SEO, SEM, social media, and more. In a sense, the cloud broker is the new digital agency, except that the marketing stack has been expanded to include payments, payroll, productivity, supply chain and more. “Digital agency” no longer works in this new environment. Perhaps “cloud broker” will.
The LSA’s Modern Commerce Monitor™️ research into small business tech adoption includes findings that support Vendasta’s strategy of pursuing non-media partners to sell its platform.
In the survey of 1,000 U.S. small businesses, we ask which entities they trust most to bring them services outside of or adjacent to their core offerings. Essentially, we are trying to find out if SMBs would rather buy SEO from an ISP or supply chain software from a digital agency. Which groups will get the benefit of the doubt for new martech, fintech, or back-office SaaS products?
The chart below shows that tech companies have a clear edge over media companies and agencies.
