So You Want To Partner ?

The importance of building a high functioning partner ecosystem is fast becoming a mandatory industry requirement for any company that is looking to become a major technology player.   The cost and effort of launching a new partnerships is considerable, so selecting the right partnership opportunity is critical.   

The role a technology company plays within the partner ecosystem will change one’s perspective of critical areas of success and what is desired from the partner relationship.  The lines between partner types are blurring and new forms of partners are emerging from non traditional sources. Despite these differing traditional partner perspectives and new entrants to the game, there remains three simple elements that I always use to evaluate and measure prospective technology vendor partnerships.   I ask these three questions. 

1. Is there Market Pull ? 

I list this one first, since it’s arguably the most important and the one that is pretty much impossible for a vendor to address late in the game via their partnering strategy.  This is a bi-product of a well designed, developed and marketed offering that is addressing the market’s needs. Quite simply, are your clients asking for this vendor’s offerings ?  Does your organization (developers, sales teams, business users) believe this vendor has produced a good quality offering that they would be proud to promote ? The “market pull” I’m referencing here essentially includes both external and internal clients.  A vender that scores very high on this element can hide some sins as it relates to the other elements in this model. A vendor that scores very low, is not one that you should be wasting scarce resources trying to activate. This is regardless of a lucrative commercial model or a highly desirable approach to Go-To-Market.   

2. Does the vendor provide you with a viable commercial model ?

Every technology company in the marketplace has developed a business strategy that ends (at one point) with revenue and margin growth that returns value to their shareholders.  Even a “grow market share at any cost” strategy must eventually translate into desired profit margins. When building out your partner ecosystem, you are looking for vendors who provide you with the ability to successfully execute your strategy for your mutual success.  Resellers are looking for reasonable margins, deal protection from their rivals and being rewarded for developing deep skills. ISVs/Solution Providers who wish to embed a vendors technology into their solution, are looking for scalable pricing models that match how they price their own solution to the market.  MSPs are looking for the pricing models of an ISV combined with the guaranteed margin opportunity of a reseller. Throw in such things as “soft” commits, “hard” commits, and upfront payments to gain additional margin and benefits, and you are starting to see all the variables that can come into play. In the end, you are looking for a technology vendor to provide you with a commercial model that allows you to execute your strategy. 

3. What Go-To-Market Value Will Be Generated From the Partnership ?

There are huge variations in the go-to-market impact (both positive and negative) that a partnership can have on your company’s sales execution.  On the positive end of the spectrum we have a vendor with a strong sales presence agreeing to sell your offerings and compensate their sales force.  One step down is a partner agreeing to act as an opportunity identification engine whereby they pass opportunities to your sales force.  Then we have co-selling where the two companies agree to a set of target accounts and jointly execute a sales strategy that displays the value of the partnership.   In the mid point is a vendor who will provide you (and your competitors) with marketing and/or business develop funds to help grease the sales engine. At the negative end of the spectrum we have scenarios where the vendor’s field sales activities conflict with that of your own.  And finally, we have a partner with overlapping or newly launched offerings that compete for the same business opportunities. Not everything will be as simple as black and white when it comes to determining the impact a partnership will have on your Go-To-Market. There will be many shades of grey.  What is stated as policy or executive intent may in effect be very different when it reaches the vendor’s client facing sales team. Over time, actions and real live client wins or losses will speak far greater than words.

Now I would like to sit here and tell you that you’re looking for a 10 out of 10 on each of the three elements.  The reality is that a perfect partnering prospect will be impossible to find or short lived as each of these three elements tend to be in motion.  Changes in the competitive landscape, pricing pressures, legal / compliance issues...etc. can all disrupt the partnering opportunity. In most cases, I look for a partner that scores well on “market pull” and is open to work with me to develop a competitive “commercial model” and define a supportive “Go-To-Market”.   Once we define and formalize the partnering model and finalize commercial partnering agreements, the real work begins… execution.  

The importance of a high performing partner ecosystem is dwarfed only by the effort and corporate commitment required to make it successful.  If you want to partner, this is what we’re looking for. 

Copyright 2019 David Wilson. All rights reserved.