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Partner Ecosystem

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The qualitative KPI I’d like to discuss is Partner Ecosystem. The term Partner Ecosystem has become ubiquitous and increasingly strategic, along with the acceleration of companies to embrace cloud computing technologies.

One high profile example of a partner ecosystem is Saleforce.com’s K-force ecosystem. So what’s the strategic rationale for their investment in this ecosystem? I think the answer to this question can be summarized with three words – Reach, Speed and Differentiation (“RSD”). So as a potential partner, ideally you need to articulate what’s in it for Saleforce as follows:

  • Reach – how you extend their product and customer reach into complementary technologies and adjacent markets.
  • Speed – how you accelerate their roadmap by filling product gaps.
  • Differentiation – how does your differentiated technology help solve an immediate customer need.

The Companies that can articulate how they help a business partner increase RSD are likely to enjoy not only a successful commercial relationship but also might find themselves in a more strategic and or transformative Partner discussion.

My experience suggests that Companies wishing to elevate their stature and success in their strategic partner ecosystem need to do the following things, including:

  • Walk before you run – Make sure your products are certified and your company is registered.
  • Take a Prescriptive Approach –  Know and be able to articulate what you are hoping to achieve.
  • Bring a customer opportunity to the table –  If you’re lucky and/or good, the sales opportunity will open the door to the Partner’s strategic roadmap and technology imperatives.
  • Clear articulation of what’s in it for the partner –  Ideally, you want to demonstrate how your RSD pulls through your Partner’s products or services.
  • Find and cultivate both a technical and business/product champion within the Company.

So, the questions for you, and there are several, include:

  • What is the value chain where your products are used?
  • How does your company interact within your customer’s supplier eco-system?
  • Which partners are critical to your success?
  • Are you critical to the success of any of your partners?

Often partnerships formed now with peers, suppliers, partners can be targets for future acquisition or sale. Making the company critical to one or more partners creates need that can drive high multiples. It is these scenarios where multiple partners are involved that can result in bidding wars and generate high multiples. Thinking now about how to establish mission-critical relationships and dependencies pays dividends when it is time to sell.