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Salesforce's OSP Partner Program: What is it?

A new revenue stream for certain partners


Even if you’ve been paying attention, you may have missed the news on Salesforce’s Outsourced Service Provider (OSP) program (you can listen in to an August 2023 Webinar on Demand), a newer way to go-to-market with Salesforce. This is an exciting area of growth for both Salesforce, as well as the right set of partners who can manage the investment and risks. There are great opportunities to establish your company and give it a distinct advantage in the market as Salesforce reimagines their ecosystem.


Very simply, OSP gives partners a way to generate revenue off of license sales - something that North American partners haven’t been able to do before. But, it’s not a reseller model. The goal of the program is to open up markets for Salesforce licenses in ways that haven’t been previously available. An OSP deal is typically less about selling clouds and more about selling market-ready solutions that solve use cases for specific markets, segments, and industries.


I have seen three ways this can work well:


  1. Solution-specific market opportunity: Partners create or build a unique solution or set of solutions that serve a market need Salesforce doesn’t traditionally sell to 

  2. OpEx instead of CapEx: Software and SaaS licenses are considered CapEx, and Salesforce is no different. This can kill a deal. Licenses purchased via OSP are “used” by an end customer but owned by a partner, and can be contracted as services/maintenance, thus allowing the end customer to shift cost to OpEx, which many companies prefer. 

  3. BPO or Agency: Do you manage applications for a customer (they are hands-off the product)? Why not generate margin on the licenses?


Solution-specific example: Do you do a ton of work in a specific sub-industry? Do you have an MVP or Accelerator that is attractive to specific types of customers? Consider the below ideas as examples of what I mean:


  • Construction management solution built on Sales and Experience Cloud, with the out-of-the-box integrations and add-ons that are attractive to Construction firms

  • Recruitment management and marketing solution built for the clean energy industry, or the oil industry that organizes all the information and third-party databases needed to help recruit and communicate with potential contractors, manage engagements, and help a firm understand the profitability of each engagement.


Why not just go the ISV route?

A reasonable question to consider. You certainly could, but by going through OSP you retain your IP, can make money off of customizations for individual accounts, AND you get the ongoing revenue from the Salesforce licenses your customer is using.


Agency or service providers can also add more value to their offerings by taking charge of the tasks that clients aren’t able to, or interested in, completing on their own, such as: 


  1. Call Center: Running outsourced call centers for end-clients that use Salesforce in their business. 

  2. Marketing agency services: Building all the brand and content for customers. Bring marketing automation into the fold and gain a larger slice of the marketing budget, while reducing the burden on internal marketing resources at your client. 


Partnership Considerations

Salesforce has made an effort to reduce channel conflict by comping the core AEs on deals for your solutions. In theory, these AEs are incentivized to help you sell the deal. In my experience there are still some hurdles to overcome with AEs who want to retain control of accounts. That said, OSP partners get an assigned account manager. This account manager serves as a go-between for your organization and Salesforce, ensuring there’s alignment with the account team. Having a solid working relationship with your account manager, and by extension the AEs, is important. While Salesforce may promote your solution into relevant teams, in my experience you’re going to have to be proactive in driving deals with Salesforce (bringing accounts). 


What doesn’t work?

Salesforce isn’t interested in moving existing licenses over to an OSP partner. Why? That would be more of a reseller play, and we all know Salesforce hasn’t jumped into a reseller strategy in North America. The same goes for renewals - you aren’t going to convince Salesforce to move a client onto your paper for a straight renewal.


Final Thoughts

There are many other things to consider before jumping into the OSP: Are the license margins good enough? How does this impact your valuation? What’s your liability when a customer cancels? How do you contract this with your end customer? In an era where Salesforce is looking for partners to drive leads for license, OSP could be a good way for you to become more important to the Salesforce field organization and improve your bottom line.


I’ve advised and worked with a few partners on OSP. If this is something you want to consider, reach out and let’s discuss.


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