Partnering Speeds Transformation
As the technology world changes, so too do partners business models. Sometimes acquisitions and hiring just arent options. Lets be honest, not every partner has access to capital to acquire another firm or the ability to take on the risks of expanding staff. This is where partnering presents a viable transformation option.
Why is partnering happening? There are three main reasons:
- Partnering maximizes strengths and diversifies away the weaknesses of a single technology services company. Each party in a partnership leverages its strengths for the benefit of the team. And each partner gets to hide some of their weaknesses in the guise of partnership. In Business School jargon, its a win-win.”
- Partnering eases the challenges of finding qualified IT talent. Finding unqualified talent is easy. Finding the right talent to fill-in a hole in your portfolio especially in a hot technology area like cloud, mobility or managed services is difficult and expensive.
- Partnering changes the costs associated with making a sale from fixed to variable. Lowering costs is key in these economic conditions. Since the costs associated with partnering generally are correlated with increases in sales activities, partnering has a higher variable cost component than other transformational approaches. There are some upfront costs required to make a partnership viable, but you incur the real costs when spending time working on qualified sales leads together.
So where are we seeing these types of partnerships between agents, dealers, VARs and the like?
Were beginning to find these types of partnerships in countries where communications and IT have already become intertwined. Cloud services a great example of communications meets IT are growing strongly in countries like Finland, France, Denmark and the United States. These integrated solutions require unique implementation skills which are best provided by specialists. According to Analysys Mason forecasts, by the year 2016, 29 percent of all cloud services worldwide ($11.7 billion) will be supplied by technology partners like VARs, agents, dealers and system integrators.
Were also finding these types of partnerships in emerging world countries like Brazil, India and China markets where finding qualified IT talent still can be rather difficult.
Finally were seeing these types of partnerships in places where mobility is becoming a key requirement of IT purchasing of applications. This is particularly true in the United Kingdom, United States and some other Western European countries. Partners that have been mobile/wireless resellers are finding themselves thrown into the unified communications world a world miles away from the traditional selling of SIM cards and a few mobile broadband dongles.
How can you partner effectively? Heres the simple 1-2-3 approach.
- Put together selection criteria and rank the importance of each criterion. You may get 90 percent of what you want in a partner and will have to settle for that. Trying to find 100 percent of what you need in a partner will prove to be a fools errand. A partnership is similar to a marriage in that way. My wife will be the first to tell you that while I met a lot of her requirements (probably 99 percent of them), I didnt meet all of them. Fortunately, I scored high enough on her requirements list that I got selected as her Gold Partner.
- After winnowing down the field of possible partners using those criteria, have in-depth discussions with a small group of partners to discover common business goals. Also dont forget to probe any areas where there could be competitive issues between your firms.
- Work toward an end-goal of having a clearly defined, mutually-beneficial arrangement between firms. Establishing the rules of engagement at both technical and business levels are critical. At the end of the day, partners will have to grow together and some aspects of the partnership may change over time. But having a common understanding upfront will save anguish in the long-term.
Partnering is a viable approach for transforming a business that capitalizes on existing strengths, diversifies away weaknesses and saves precious cash and capital.
Steve Hilton is the lead analyst for the Enterprise Solutions Program at Analysys Mason, which explores the needs of the enterprise, small business and SOHO ecosystems. He has 17 years of experience in technology and communications marketing. Prior to joining Analysys Mason, Hilton spent six years managing the enterprise and SMB team at Yankee Group. He also has held senior positions at Lucent Technologies, TDS and Cambridge Strategic Management Group (CSMG). He has a bachelors degree in economics from the University of Chicago and a master’s degree in marketing from Northwestern Universitys Kellogg School of Management.
