During the past 12 months we have welcomed over 50 new Tech Data partners to the IBM Business Unit and made many more introductions through our Industry Ecosystem Program.
Running workshops to help develop the new solutions that can be created through the different products and skill sets of complementary partners, highlights the need for an open, collaborative approach. The ability to put yourself in the other partner’s shoes is a really important part of making the process work.
So how do we start building these partnerships and why does it take time to get from what may seem a great idea to a solution the customer can buy?
The answer is partnerships are not simple to create. Building a commercial partnership can be more difficult than making an acquisition.
Typically, in an acquisition, the agenda is driven by the acquirer. They are looking to increase scale, remove a competitor, buy a new customer base or add a new product or service they think their customers will require. Business continues while the synergy between products and services is developed. When acquiring, one of the biggest factors in a successful outcome is the culture fit. Do the two companies have similar values, will the people across both organisations see opportunity and embrace the move enthusiastically?
Forming a successful partnership often involves relatively few people in each company and therefore culture becomes less of an issue. In fact, different approaches may enable both parties to get to customers they may otherwise not reach. However, the basic principles of bringing a new product or solution to market still need to be considered. I mentioned these in a previous week’s article: Preparing for growth.
As part of the solution design workshops we are running, we have introduced an old friend, the Venn Diagram. This helps the different parties articulate what they bring to the table, what they would like out of it and importantly those areas where everyone sees benefit.
An example might look like the following.
A Software Partner wants to grow market share in the public sector. However, they don’t have an “as a service” offering in the cloud and don’t want to become and MSP.
Another partner is an MSP with good sales coverage within public sector and sits on a number of Framework agreements. They don’t develop software but do have references of providing MSP services with other software partners.
The vendor has extensive public sector coverage, has a G-Cloud approved offering as well as public and hybrid cloud offerings.
Looking in from the outside this looks like a slam dunk. They are all complementary, would see benefit from the market growth and don’t appear to have to do too much different. Surely the offering will be on the market within weeks.
Identifying likely partnerships is easy, getting around the table is a start. However, at this stage all we have done is agree the Partnership companies and believe there is a fit. Product, Price, Positioning, Place, People and Promotion still need to be sorted.
So, what is the solution that will be sold? Will it be under one brand name or will there be two offerings sold by each partner?
How will it be priced, who will take the order and how do the margins and responsibilities divide up?
How does the solution position against similar offerings, who is the competition and how will they react?
Is there a geographical benefit from marketing out of a particular location or hosting in a particular data centre? (Those who’ve sold to customers in Wales or Scotland will understand this).
Who, identified individuals, will sell the solution and then support it? Are other third parties required?
Once we understand all of the above, (and more, this is not an exhaustive list) how will the solution be promoted? Who will build a pipeline, create awareness in target markets, produce collateral, make it real?
This may seem like hard work but if this isn’t part of the upfront planning then the partnership will not succeed. What may have been a fantastic idea never launches because this planning stage is missed. And if it is too difficult to get agreement over these, then it’s probably not going to work in practice.
With major vendors and other IT channel players now promoting their approach to developing ecosystems and growing partnerships, it’s easy to get excited by their new enthusiasm. But making partnerships work requires a thought through process and a willingness from all parties to find a win:win outcome.
The IBM PartnerWorld article, Tech Dating, describes the way these relationships can be built and how they bring value to the various partners involved. If you are looking to create a new partnership to bring an IT solution to market, please get in touch with the Tech Data Ecosystem Team.