Published on October 29, 2023, 9:21 pm
Partnerships are a fundamental aspect of success in the business world. When two or more parties come together to collaborate towards a common goal, they can achieve more than what they could individually. According to CompTIA, the most successful business alliances are synergistic, meaning that the combined capabilities of the partners are greater than their separate abilities.
In today’s digital economy, partner ecosystems have become increasingly important. These ecosystems consist of networks of businesses that provide complementary services within a specific industry. They contribute to an organization’s skillsets, expand its sales footprint, foster innovation, and ultimately grow revenue. It’s a win-win situation for all involved parties.
I had the opportunity to speak with Stephanie Sissler, VP and principal analyst at Forrester, about partner ecosystems. She explained that there are various types of partner ecosystems – both transacting and non-transacting organizations – that work together to help customers achieve their desired outcomes and deliver a compelling integrated experience from pre-sale to post-sale.
To better understand the difference between a partner ecosystem and a traditional channel network, let’s take a look at the chart provided by Forrester:
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Stephanie emphasized the importance of recognizing distinct types of partner ecosystems. While many are built on digital platforms, not all of them rely on this technology. The four main types she identified are:
1. Co-innovation: This type involves collaboratively developing new ideas, technologies, or products with one or more partners to address specific business outcomes. Platform ecosystems are a growing subset of co-innovation ecosystems where suppliers offer apps or APIs that can be extended through partners and customers building on top of it.
2. Co-selling: This approach involves collaboration between a supplier’s direct sales team and a partner sales team to leverage their collective strengths in order to close opportunities. A well-known example is Microsoft’s Co-Sell program.
3. Co-integration: This type of ecosystem brings together partners with complementary offerings to craft and deliver holistic solutions that help customers achieve their desired business outcomes. Collaboration in this type of ecosystem may or may not include co-selling. HPE’s program is an example of co-integration, where HPE and HPE service providers collaborate to develop and deploy enhanced solutions for their joint customers.
4. Co-marketing: Complementary partners combine their marketing efforts to promote a joint offering or each other’s offerings. An example gaining popularity in B2B sales is the use of affiliate programs, where a supplier collaborates with sources that their target customers use to obtain information before making a purchase, such as consulting companies or industry bloggers.
Each type of partner ecosystem brings unique value to its members. For ecosystem members, collaborating with others becomes critical due to factors such as time-to-market demands, cost efficiency pressures, increasing solution complexity, and higher buyer expectations. Partner ecosystems enable organizations to deliver real value to customers, expand partner mindshare, and drive business growth.
On the other hand, customers benefit from partner ecosystems by receiving superior value and experiencing exceptional customer experiences. The way this is achieved varies based on the type of ecosystem involved. Co-innovation ecosystems deliver high-quality solutions faster; co-sell ecosystems offer expertise and insights; co-integration ecosystems reduce product and purchase complexity through integrated end-to-end solutions.
While partner ecosystems have numerous advantages, it’s important to mitigate the perils of lopsided partnerships. Not all partners benefit equally from these alliances. Stephanie warns that unless a partner ecosystem is built on a solid understanding of the target customers’ needs and focused on delivering value and exceptional experiences, it will struggle to achieve success in the long run.
It’s also worth noting that as partners expand their portfolios or capabilities through organic growth or mergers and acquisitions, the exclusivity within an ecosystem can become diluted over time. Therefore, suppliers may choose to join more than one ecosystem depending on their objectives. They might participate in one ecosystem for a specific offering and another for a different offering, or join multiple ecosystems with the same offering to expand their reach.
Building an ecosystem from scratch may not be necessary for every organization. While some enterprises are large enough to create their own partner ecosystems to cater to their specific requirements, Stephanie suggests exploring other options before embarking on this journey. Joining an existing partner ecosystem can bring added value and provide opportunities for learning.
However, becoming the orchestrator of an ecosystem isn’t always the best approach initially. Orchestrating an ecosystem requires several core requirements, and it often involves changes and investments. It’s important to consider what you want your ecosystem to accomplish and evaluate other alternatives before deciding to build one.
Partner ecosystems play a vital role in today’s business landscape. CIOs and CTOs should conduct due diligence when identifying suitable partner ecosystems that are customer-centric and can effectively address their current needs while providing ideas and innovation to optimize their IT capabilities. These ecosystems should also consider input from their partners to fill gaps and meet future needs successfully.
In conclusion, thriving in an ecosystem requires