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The state of channel partner partnering is transitioning.
There's a growing opportunity to collaborate with new types of partners on bigger customer deals, earn more revenue, sell higher into the customer organization, and foster tighter relationships with IT and line-of-business (LOB) buyers. However, on the flip side, a partner must be willing to relinquish control over the customer and move out of his or her comfort zone.
Is more expansive partnering right for your partner firm?
While it might be overkill to call the increasing conversation around partnering a tidal wave, the volume on partnering is picking up because today's channel and IT landscape promotes partner partnering. Customers want complete solutions to solve their critical business challenges, and partners with expertise and differentiated skills are more open to strategic peer alliances to help them, according to industry players.
"If you're just helping customers with IT efficiency there's a lot of competition there and it's hard to partner when everyone is doing similar things. But as we get more differentiated and try to help solve some of businesses' biggest problems, there's a lot of room for partners to say, 'Hey, I'll do this part and you do that part,'" said Darren Bibby, vice president of channels and alliances research, at IDC.
The relationship between two Toronto companies, CMS Consulting Inc. and iMason Inc., exemplifies two partner firms with unique areas of specialization working together to provide a comprehensive offering for customers. Prior to being acquired in June 2015, CMS Consulting, a Microsoft-focused infrastructure technology partner, worked collaboratively with iMason, a software development shop that has built solutions on Microsoft SharePoint, .NET, and Azure, for the better part of the last decade, according to Brian Bourne, former owner of CMS Consulting.
Darren BibbyVP of channels and alliances research, IDC
"We frequently partnered with other companies -- particularly companies doing the application layer because we focused on infrastructure," he said.
Since the acquisition, CMS Consulting and its sister company Infrastructure Guardian, a managed service provider (MSP) that provides governance, operations and advisory services for public, private and hybrid cloud environments, have become New Signature Canada. Bourne is president of the Canadian operation. New Signature Canada is in the running for the 2015 Microsoft Canada Winning Together IMPACT award with iMason. A Microsoft Gold partner, CMS Consulting was the 2014 IMPACT award winner from Microsoft Canada.
Partnering in the channel community is not new. According to IDC research from 2007, 2009 and 2013, partner-partner collaboration has been on the upswing.
"The trend is that more companies are relying on this partner-partner collaboration for more year-on-year revenue," said Bibby.
The partnering maturity model, according to IDC, moves from basic (or local, subcontracting) and reactive (or ad hoc, local) types of partner partnering to more proactive (deal planning, more geographically diverse) and dynamic (annual planning and integrated go-to-market) types of partner partnering.
Today, partners don't need to be local to solve a customer's business problem. And, customers have options. All a customer has to do is search online to find a specialized partner business and they're only a click away from doing business with them.
But, there's more to it than that.
The vendor's role in a channel alliance
Vendors are pushing partners to become more complete, to develop a broader set of vendor relationships, skills, competencies and certifications to be better skilled to deliver a robust technology offering.
For the past few years, Cisco was not only a leader in creating a broader partner ecosystem but has also been on the forefront of encouraging relationships between different partner types. There are several market drivers for this development, according to Steve Benvenuto, senior director for business development in the Cisco channel partner program.
Software is another driver, particularly independent software vendors (ISVs) and other vendors that have applications that are appealing to the LOB. The third driver is the trend towards open APIs and the developer communities that are being created to develop against various platforms.
"Cisco recognized that we needed to organize a partner ecosystem and ensure that we were creating relationships across the ecosystem that would allow us to enter all these spaces in IoE, IoT and be successful at selling software," Benvenuto said.
At Cisco Partner Summit 2014, the vendor changed the name of its partner program to the Cisco Partner Ecosystem and introduced the concept of new programs for new types of partners. The Solution Partner Program, specifically for ISVs, was introduced in 2014. Cisco tests and validates the ISV's applications and connects them with other partners in the ecosystem to go to market and provide business solutions to its customers.
This year, Cisco rolled out the Software Partner Program for software integrators and software consultants.
According to Benvenuto, Cisco's expanding partner ecosystem was designed to accommodate long-time Cisco value-added resellers (VARs), existing partners with a single market focus or partners who choose to work across multiple competencies. "We're seeing some partners aggressively partnering with vertical integrators, software integrators and consulting companies," he said.
IDC's Bibby said the role of the vendor is multifaceted.
"I've always said that [the promotion of partnering] has to be more of a campaign and a mantra, rather than one directory site [for partner listings] for this kind of thing," Bibby said. He suggested vendor account managers and partner sales people at the vendor site -- who know dozens of partners each -- have a role to play in being a matchmaker for partners who are looking to team up on deals.
Benvenuto said that the Cisco Marketplace showcases a variety of partner companies -- such as cloud service providers and ISVs, for example -- and that matchmaking is exactly what the marketplace is designed to do. Today, the marketplace is more of a catalog, but the Cisco executive said the company is in the process of figuring out how to market these partners more aggressively.
Partner communities also play a role in encouraging partners to work together collaboratively.
The independent Microsoft community, the International Association of Microsoft Channel Partners (IAMCP), formed in 1994, is a long-time supporter and promoter of mutual growth and business development among partners. IAMCP touts the theme: connect, learn and grow.
Jeff Shuey, chief evangelist at K2, IAMCP member for 20 years and current president of the IAMCP Seattle chapter, said that today, no one vendor does it all. K2 is a workflow business process management company and ISV.
He pointed to Microsoft and the enterprise content management space, for example. "So, we see a lot of synergies and connections. … It could be a learning partner connecting with a systems integrator or it could be an ISV that needs delivery services through a systems integrator, or MSPs that have the capability to handle much smaller engagements," he said.
A recent scenario that came across Shuey's desk was a request from an IAMCP member in the southern California chapter looking for a partner to manage and set up an initial Office 365 deployment for a small dental practice in the Seattle area. The word got out and three partners expressed interest in the opportunity.
"It looks like one of them is going to win that business," he said.
Shuey agreed that partner-partnering, while not new, is getting more visibility.
Options with benefits
The new IT consumption model continues to move away from customers buying pieces and parts to making purchases that include not only the infrastructure but also the application that sits on it and the inter-relation of data. What that points to is a need for a more complete solution from the architecture, design, implementation and support standpoint, suggested Kevin Rhone, senior partnering consultant at The Enterprise Strategy Group.
Partners have a choice to make: they can do nothing, or they can go back to the table and partner with another provider to fill in the pieces that the other is missing to give both companies a better chance of competing for business against a larger company with a diverse skill set.
Companies that sit on the sidelines for too long may find a growing field of players crowding them out. The partner ecosystem is expanding rapidly as new types of partners become the latest competition, i.e., digital marketing agencies, human resources consultancies becoming technology companies, born-in-the-cloud companies, and process and automation companies, for example.
While not all partners are ready, willing and able to go whole hog in this new partnering realm, industry analysts strongly suggest that they give it a try and challenge themselves.
"Once partners learn that partnering isn't the end of the world, they may actually realize that it makes business sense," said Bibby.
Cisco's Benvenuto pointed to some benefits for partners: A Cisco VAR that's worked with the vendor for many years could team up with a partner with special LOB relevance -- i.e., application or consulting -- and gain entrance into the LOB buyer. Another benefit of partnering for a VAR is gaining new business while it builds its own in-house expertise.
For ISVs or software integrators, partnering helps them get their solutions into the market.
Partner partnering won't be business as usual.
Rhone pointed to some issues that a partner will have to deal with: finding the right partner; risk and trust issues; more complex deals; longer order cycles; changes in administration and overhead; and a need to transform the partner business around more of a solutions approach.
"Partners can expect to be forced out of their comfort zone," he said.
For many partner organizations, partnering won't be a skill set they've developed. Industry experts suggest setting up a development group and business development role within the partner firm that focuses specifically on partnerships.
Learn about new types of partners such as digital marketing companies
Read about the challenges of building a partner channel alliance
Find out about the metrics of cloud channel partner management