Perfect Time to Transform Alliances & Partnerships

Perfect Storm Conditions

Despite the loud noise about Tech Industry layoffs, in this article, Amanda Hetler, Feature Writer at Tech Target, explains that it is not a trend expanding across all sectors. Moreover, according to her, the tech industry layoffs are costs cut to protect companies and their investors from the fear generated by the current economic challenges and the corrections to the post-COVID19 “new normal” fantasy where digital services would have replaced traditional human interactions.

That’s where I see the perfect storm conditions to accelerate a transformation.

It could be counter intuitive especially for companies whom, in such challenging times, are going back to their good traditional, comfortable, direct and short-term results strategies.

Forward-thinking companies understand the resilience and strength of business ecosystems in adapting to unforeseen circumstances. As such, they will prioritize partnerships rather than reducing headcounts.

However, significant changes are necessary for transformation to occur deeply within companies.

From Traditional Partnerships to Partner Ecosystem: a recap

There are several reasons why a transformation in Partnerships organizations is required. Subscription business model, XaaS and hyperscalers’ marketplaces are examples of major changes impacting traditional partnerships management.

At TSIA, Anne McClelland, VP XaaS Channel Optimization Research and Jared Raftery, Director XaaS Channel Optimization Research are adding the Partners angle to the famous LAER XaaS engagement model where the importance of Customer Success team is highlighted. In Enabling Channel Partners to Thrive in the LEAR Engagement Mode, Anne McClelland is bringing on the table several reasons why XaaS companies and their Partners are not aligned. And going further, Jared Raftery is describing What is Partner Success, a major evolution on the understanding that the Customer Experience is as important as the Partner Experience.

This year, in the State of XaaS Partner Channel Optimization, Anne McClelland and Jared Raftery are compiling their observations on conversations they had over the years with a lot of companies. They describe the five common mistakes that technology vendors make when building their XaaS partnering plans. These mistakes are classified as temptations because they sound good but lead to trouble in the long run.

For instance, in the XaaS world, the service is delivered globally. The pricing structure allows different type of metrics and payments facilities which is impacting revenue recognition. Consequently, this should impact how partners are compensated to guaranty that partnerships are still sustainable and thriving.

Then, the document is describing the Growth Multiplier Framework which is aiming at guiding on the path to deeply weave Partnership programs into companies’ Offers, GTM, Finance, … . To this purpose, the LEAR framework is broadened to integrate stages where Software Vendors are not involved. It leads to a better understanding of the role of a larger partner ecosystem.

In the same way, Jay McBain, Chief Analyst at Canalys, was describing this broadened partner landscape in the trifurcation of the channel model.

For instance, with customers’ buyer spending two thirds of their time to look for information without reaching out to Software Vendors, it is key to adapt partner programs for the Influencer Channel.

According to Jared Fuller in the PartnerHacker Manifesto we have entered the “Era of Partner Ecosystems” highlighting that an ecosystem with higher diversity tend to be more stable and resilient. In this era, “Trust is the new Data”. Data was king in the Sales Digitization and Marketing Automation eras. Being conscious of who is influencing influencers and be in trusted circles of customers and prospects has become crucial.

Saas native companies like Salesforce or HubSpot and later SAP, Oracle and Microsoft are already taking care of a lot of partners. Recently, the Canalys’ Partner Ecosystem Multiplier: The AWS Opportunity study is demonstrating how much the AWS’ partner ecosystem can thrive. It specifically highlighting the $6.40 service opportunity multiplier for each AWS $1 that partners in the Expert category can reach across the customer technology lifecycle. Partners in the Expert category provide the broadest set of service offerings (from advisory to applications management and maintenance) and possess a large professional service able to deliver on the whole ecosystem’s technologies towards outcome-based value to the customer.

In Have the industry’s channel chiefs really moved to an ecosystem model?, Jay McBain is summarizing the relevant questions leaders should ask themselves to assess where they are in their journey towards an effective partner ecosystem. For instance, similarly to what happened in Marketing Automation, channel software technologies aim at increasing the effectiveness of a partner ecosystem management at scale. In the Channel Ecosystem Landscape Canalys’ estimates the Channel Software Landscape should reach US$8.9 billion in revenue by 2027.

In this vibrant area, new concepts appear. In The Nearbound Manifesto, Simon Bouchez, CEO and co-founder at Reveal is introducing the Nearbound revenue opposed to the traditional inbound and outbound revenues. Nearbound is described as the biggest revolution in B2B able to increase win rates by 41% and deal sizes by 43%. According to him, the magic happens when you leverage the companies around yours to influence the entire revenue channel from acquisition to retention and forever. The secret is to intertwin information systems to enable meaningful signals to flow freely from any connected company to all others.

Conclusion

We are at the beginning of a new transformation cycle towards Partner Ecosystems. The current worldwide challenges can be an opportunity to accelerate this transformation. With AWS, SAP, Adobe examples and guided by analysts, we can foresee a future based on business ecosystems in the Tech industry where it is a win for the customer and for the whole participants of the ecosystem. 

You should start as soon as possible initiatives to audit your Offers, Partners contracts and Success teams to make sure you cover the needs of your partners. You should assess the role of your offers in the the light of the total value chain of the Customer's Tech lifecycle . Supported by the right tools, you can quickly capture and understand (read prioritize) all the signals triggered accross the entire ecosystem. Thus, your Sales team, but also your partners' sales teams or influencers, will have the right information at the right time to offer a complete and stronger value to serve Customers' business objectives.