- On May 7, 2020
In the past, only large, well-established tech giants like Apple, Microsoft or IBM talked about nurturing an ecosystem. Typically, the tech giant at the center of the ecosystem holds tremendous power over each partner, and defines – if not controls – the character of the network.
Take Apple for example, who dominated their vast number of R&D app partners that played a tremendous part in the early success of the iPhone, yet ultimately went unpaid – as documented in the New York Times.
Whether these behemoth ecosystems were entirely ethical or not, their rise in prominence gave coverage to the idea that having a value-adding network of collaborators and partners can lead to a significant competitive advantage.
Since then, we’ve seen a huge number of B2B tech companies establish a partner ecosystem. These modern ecosystems are less centrally-dominated – like the ones mentioned earlier – and more of an organic partnership, where the companies involved are more integral and collaborative.
Having a clear partner ecosystem development strategy has now become an essential part of any companies’ growth plan, and continues to be a driving force in partner development going forward.
What Makes a Great Partner Ecosystem?
For any partner ecosystem to be successful, scalability must be at the heart of your endeavor. After all, investors have a tendency to gauge their investments on market share, growth, and the ability to expand across-market.
What are the steps towards making yourself scalable? Two main attributes: forward-thinking customer focus combined with relentless innovation.
At least that was the case for SAP, which now harbors one of the most robust partner ecosystems in existence. The German software giant is well known for providing key enterprise solutions, yet with over 18,800 partners they also have an inspiring partner economy.
SAP maintains their giant, complex network by ensuring global partners have:
- A nuanced understanding of product history and the needs of local customers, plus the ability to bring them together in an organized way
- Built additional capabilities and platforms on top of SAP’s existing range of platforms
- Integrated all of these elements, along with 3rd party IT systems, into workable enterprise portfolios
In other words, SAP has doubled down on the holy trinity of SIs, VARs and ISVs that have been the backbone of many successful software vendor ecosystems in the past.
Of course, the average tech vendor won’t be worrying too hard about managing almost 70,000 global partners. Maybe 70 is slightly more realistic. Or 7.
No matter where you’re starting from, there are certain pitfalls to avoid when growing your partner ecosystem with Microsoft-scale goals in mind. Here’s a few of the most essential:
- DON’T haphazardly recruit any and every partner you can find
- DON’T neglect existing partners in favour of onboarding new ones – nurture them instead
- DON’T rely too heavily on ad-hoc software solutions – they may save you money at first but can lead to long term scalability issues which are hard to remedy.
Once the foundations for your partner ecosystem are in place, you’ll be looking to scale and expand. Some common roadblocks in this phase include:
- Minimizing channel conflict between your direct sales team and your ever-expanding range of indirect sales partners.
- Maintaining effective communication and collaboration between internal teams to minimize errors and avoid confusing your partners.
- Ensuring new partners are chosen based around current figures on specific markets, demographics and regions.
- Allowing a budget for Market Development Funds to enable your partners and help them succeed.
Partner ecosystem development doesn’t ‘end’, yet many companies get to a comfortable stage and become somewhat complacent. Effective partner ecosystems should be constantly developed and improved.
As your partner ecosystem grows, effective and efficient management goes from being ‘nice to have’ to ‘ABSOLUTELY CRUCIAL’. By this stage:
- A greater importance is being placed on global partnerships to extend your reach. New partnerships are focused, strategic and highly selective.
- You’ll have implemented a robust, integrated software suite which allows for easy partner onboarding, development, communication, goalsetting, and just about anything else.
- Additionally, you’ll have business-critical systems integrations with ABM and ERP platforms.
- A partner rewards system in place, to keep partners motivated and willing to champion your solutions.
- Well-established channel pipelines for communicating new product developments en-masse, offering training and hands-on product experience to all partners.
If you’d like some more hands-on advice when it comes to growing, scaling and optimizing your channel partner ecosystem, click here to get in touch with the channel experts at Gorilla