Myth-Stakes of Partner Building 101

Myth-Stakes of Partner Building 101

February, 2017

Perhaps like many others who have worked in various PLM market segments throughout their careers, the richness of technology spaces and diversity of business models within the PLM ecosystem continually astounds me. I find it awe-inspiring that there are so many nimble hyper-focused software firms, along with their industry-specific channel partners, that are just as successful and satisfying to work for as the large enterprise solution providers with their cadre of system integrators, albeit on different scales.

It’s not surprising that much of the innovation and disruption across the PLM industry comes from small founder-led independent software providers (ISPs or ISVs), either with or without the benefit (and curse) of investor capital. A do-or-die focus on their maturing technologies, new products, and esteemed customers drives a deep intimacy with their targeted markets. This near fanatic obsession then exposes them to customer pains, needs, and opportunities which often evade larger competitors. The long history of mergers and acquisitions across PLM validates that many companies upon reaching a certain size may find it less costly and more reliable to partner, license, or buy instead of trying to innovate and productize on their own.

What does surprise me is the observation that many small and big prospective partners, along with their young or senior executives, often share a mirror image of what the other party lacks. That deficiency is a better understanding and appreciation for what makes an exceptional long-term strategic partnership in contrast to an adequate short-term transactional relationship.

A common myth of partner-making that innovative ISVs often believe in is that their technology, products, or customer successes make them instantly interesting and valuable to new channel partners as well as in larger technology alliances. I often advise and unintentionally shock my clients – after they have given me a most impressive product overview – that successful partnerships for them will simply not be about their products or even about themselves, no matter how different or outstanding they may be!

On the other side, the prospective partners often mistakenly believe that their own marketing prowess, sales force reach, and customer base are what the ISV desperately seeks to exploit out of the relationship and thus should be zealously guarded. These partners often assume a somewhat arrogant protective posture, directly related to the size of their market capitalization, until they learn that their prospective new partner cares little about these attributes, at least in the exploratory discussions.

Resting on the offering or receiving end of the most hyped partner contributions does not lay a foundation for a resilient relationship that can survive the ups and downs that inevitably come around. While there are many reasons this is so, the most obvious one is that all of these elements will change quite frequently due to the very nature of our industry. This includes the products, people, strategies, and desired customers to name just a few. In fact, if these don’t change, one or the other partners is probably dying, but they just don’t know it yet.

My experience from working with numerous ISVs across several different PLM solution spaces is that a shared vision of both the immediate and long-term market opportunity is what it takes to fuel then sustain a mutually successful partnership. In retrospect, that overlapping vision looks obvious and easy to achieve, yet I find it to be rare. The evidence speaks for itself that so many partnerships, small and big deals alike, are announced with great fan-fare but lead to few results. Arriving at a shared vision of what can be possible and how it can be accomplished – thus why you do what you do which becomes why we do what we do – is not a trivial exercise for a single enterprise much less two partners, but that’s a topic for another Alliance Alchemy post.

Partner & Alliance Myth-Stake 101: The most successful partnerships do not revolve around technology and products, nor sales capacity and marketing might. Neither are they based initially on shallow respect and trust which must be earned over the long-term. Instead, partnerships are best formed from an aligned, shared vision of market trends and emerging opportunities. Everything else that is needed for success can follow.

Leave a Reply

Powered by WordPress.com.

Up ↑

%d bloggers like this: