Phoenix Rising Blog – Collaboration Strategy
Posted Thursday, September 28, 2017 at 12:00 AM by Norma Watenpaugh
Business models have fundamentally changed from selling and buying gear to responding to how customers consume technology and how it changes their businesses.
We are experiencing seismic changes in the tech industry driven by the convergence of SMAC (social media, mobile computing, analytics and cloud technology), the change in technology consumption, the rise of Digital Transformation (DX) and the Internet of Things (IoT). Though the industry has experienced massive disruption before, the changes underway now seem to be different. Why? One reason is that business models have fundamentally changed from selling and buying gear to responding to how customers consume technology and how it changes their businesses.
For a clearer picture of what’s happening, consider the following:
- Channels are consolidating: According to the 2016 CompTIA study, there has been a 30% decline in the number of partners transacting since 2008.
- Despite this decrease, channels remain productive: 70-80 percent of IT products and services continue to be sold through channels in North America, according to a 2016 CompTIA study.
- Channel partners face increased competition due to the convergence of partner types, including traditional solution providers and telecom agents.
- While the number of traditional channel companies has declined, it’s been offset by the rise of influence/affiliate channel models and new partner types including marketing and digital agencies, accounting firms, private equity companies, and HR firms.
- Amid this upheaval, traditional IT/networking solution providers are transforming their business models to accommodate for cloud, IOT, SDN and SaaS applications.
What else is driving change? The new buying paradigm led by line of business (LOB) managers for one thing. They are now in the driver’s seat and their motivations are keenly focused on business outcomes. IT in certain software applications and solutions may be an influencer, or taking a back seat in the sourcing of technology solutions. Similar paradigm shifts are also happening among infrastructure vendors who have responded by reorienting their organizations around business value, software, and not allowing their businesses to become plug-and-play commodities.
The conversation is also shifting regarding who is a vendor, who is a partner and who is a customer. Vendors may be hardware, software or services-oriented, and channel partners may be cloud providers, master agents, solution providers or some combination thereof. Vendors, service providers and solution providers are all partnering together to create additional value for end customers and to ensure long term solvency and success.
All of these trends, changing business models and buying dynamics amount to an incredible transformation happening in partner ecosystems. We must rethink how vendors and partners go to market as an ecosystem. Partners once on the fringes are now more powerful as influencers. Often, they are becoming orchestrators of the ecosystem. With their established customer relationships and trusted advisor positions, they are diversifying their revenue streams to incorporate managed services, API innovation and integration.
As we see more and more consolidation in the traditional IT channel, we see an influx of new players centered on particular industries. For example, GE Digital is becoming a powerhouse in IoT and industrial transformation. Today, there are over 1,000 new VC-funded entrants into the IoT space. This is a space where digital transformation and IoT require a more verticalized approach and level of expertise.
So what does this mean for companies seeking to transform their current partner ecosystems to meet the challenge? TCC & Phoenix Consulting Group have recently engaged in extensive research to understand how companies are engaging with new partner ecosystems. We have interviewed partnering professionals across a “Who’s Who” in the ICT industry to glean their insights so we can better understand their actions.
Here are three trends that stand out from our conversations and research:
1. Organizational Structures Are Evolving Vendors are compelled to think more holistically about their different routes to market. As partners adopt a more blended business model of services, homegrown IP and recurring sales streams, vendors need to break down silos between their channels, ISVs, alliances and services business units. Companies are beginning to organize their various partner communities under a single reporting structure and framework, and a unified partner program.
2. The Meaning of Value Has Changed Partner programs need to restructure to accommodate the changing nature of value. Instead of sales volumes, they must think in terms of rewarding new definitions of value prioritized by end customers. Thinking value means reevaluating incentives. Vendors can no longer subsidize partner profitability through back end rebates or discounts. They must instead reward skills, competency, vertical expertise, customer relationships and sustained engagement. These behaviors are the new leading indicators for partnership success.
3. Encouraging Peer-to-Peer Collaboration Since no single vendor or partner can deliver DX or IoT solutions by themselves, working together effectively has become a premium competency. Many of these solutions are custom-assembled for each customer, and the constellation of partners may be different for each opportunity. A new model of more agile, more integrated partnering is required. A partnering model dependent on trust which becomes easy to replicate—or terminate—once the work is completed..
In a very complex and changing landscape, we believe the vendors and partners who embrace the change, build partnerships for the long run, and make partnering a core tenet of their company strategy will achieve a competitive advantage that could last for years.
About the Authors:
Theresa Caragol is founder and principal consultant of Theresa Caragol Consulting, LLC, and Achieve Unite a strategic advisory firm that provides business acceleration services to global enterprises including partner and channel development, go-to-market planning, M&A channel integration and executive learning forums. She has more than 20 years’ experience in building and managing multi-million dollar indirect channel teams and strategic alliance business and programs from inception to sales success. Prior to founding TCC, Theresa held senior executive roles at Extreme Networks, Ciena and Nortel.
Norma Watenpaugh is the founding principal and CEO of Phoenix Consulting Group (www.phoenixcg.com), which provides partnering and collaboration consulting services with expertise in partnering strategy, multi-channel and alliance management, and ecosystem development. Prominent clients include Amazon.com, Adobe Systems, Cisco Systems, Dupont, Intel, PayPal, Microsoft, SAP, and Xerox. Norma is also a Board member of the Association of Strategic Alliance Professionals. She also leads the U.S. delegation to the ISO standards committee for Collaborative Business Relationship Management.
Posted Monday, July 31, 2017 at 05:00 PM by Norma Watenpaugh
When we talk about digital transformation, so much about it is about the customer experience. At a recent ASAP Tech Partner Forum, Tiffani Bova from Salesforce cited an example of how as a consumer, you might order a Starbucks, from your Tesla, through Alexa. When you drive up to pick up your coffee...
Posted Monday, July 24, 2017 at 02:00 PM by Norma Watenpaugh
Recently I was invited to facilitate a roundtable/workshop at the June 7, 2017 ASAP Tech Partner Forum in Santa Clara, Calif., centered on digital transformation. We heard from many experts and pioneers in the technology space about the challenges and changes they were navigating. It was like drinking...
Posted Wednesday, January 18, 2017 at 12:00 PM by Norma Watenpaugh
How do you engage when your partner is strategic to you – but you are not strategic to them.My partner thinks of me as a supplier, or a channel, or 'fill-in-the-blank.' How do I become a strategic partner? This is a common refrain from startups and small companies wanting a relationship...
Tags: strategic partner, alliances
Posted Thursday, August 4, 2016 at 06:00 AM by Deborah Henken
Do you Have the Right Channel for your Future?The Buyer's journey has changed in the past few years. Has your channel strategy kept up? Have your partners? How are you transforming your channel to address how buyers buy? How is your channel changing to keep up?Here are some facts about...
Tags: channel strategy, digital transformation, buyer's journey, transforming the channel, channel of the future
Posted Friday, May 13, 2016 at 03:00 PM by Norma Watenpaugh
TALKIN' SMAC AND DIGITAL TRANSFORMATION Author: Hobart Swan | Published by: CCI Global Channel Management, January 2016 Feature Let’s start off with a definition. The Altimeter Group defines digital transformation as “the realignment of, or new investment in, technology and...
Posted Friday, April 22, 2016 at 05:00 PM by Norma Watenpaugh
Is IOT Ready for the Channel?We’ve been hearing IOT is coming; IOT is coming for some time. The fact of the matter is IOT is here. GE announced that they saw $6B inrevenue in industrial IOT this past year, 2015. Others Amazon, Google, IBM, even the US government have also announced...
Posted Monday, May 25, 2015 at 01:00 PM by Norma Watenpaugh
Partnering Strategies to Accelerate Growth in the Internet of ThingsFor some time we’ve been hearing that Internet of Things is coming. Well it’s here!There are many examples that we probably don’t think much about. Beyond our personal devices: smart phones, watches...
Tags: By one estimate IOT will represent $14T of new value creation by 2020 with 50-75 billion devices connected.
Posted Monday, April 27, 2015 at 09:00 PM by Norma Watenpaugh
Well, IMHO yes and no.I’ve been working for some years with the Association of Strategic Alliance Professionals (ASAP) in creating standards for collaboration. And I frequently get push back. “No two relationships are same.” “Each is special in some way.”  ...
Posted Monday, September 15, 2014 at 09:00 AM by Norma Watenpaugh
Partnering Return on Investment is often quite attractive since the investment in a partnered initiative is shared. In other words half of the resources or costs are on your partner’s balance sheet. There are other organizational advantages as well which become apparent when a build...
Posted Sunday, September 14, 2014 at 09:00 AM by Norma Watenpaugh
Creating Business Value for CustomersCreating a competitive edge is crucial for all businesses and can be achieved through alliances. Alliances can also be a defensive measure in countering a competitive shortfall such as a gap in a company’s product line. In our research we found that creating...
Posted Monday, August 18, 2014 at 12:00 AM by Norma Watenpaugh
The definition for an alliance is when two (or more) organizations combine their resources to create new value that could not be (easily) achieved by either party alone. Innovation is often described as the process of combining disparate ideas to create something new and in today’s business climate...
Posted Monday, August 11, 2014 at 12:00 AM by Norma Watenpaugh
Market Impact embraces those strategies that are aimed at growing the businesses of the allied partners. It includes strategies such as entering new markets, gaining a market share position, and generally expanding the capability to gain new customers. The top five selections of our best practices...
Posted Sunday, August 3, 2014 at 12:00 AM by Norma Watenpaugh
The Strategy of AlliancesAlliances in the technology sector are overwhelmingly evaluated based on revenue and for good reason. They deliver incremental revenue over above business as usual. However, revenue is a lagging indicator and does not provide insight into whether the alliance is achieving...
Posted Saturday, November 30, 2013 at 08:00 AM by Norma Watenpaugh
Every organization has a unique culture as a result of the norms, values and accepted behaviors that are held within the community. People are often unaware that they do function within a company culture. However, when they begin to work closely with another company culture, they become aware...
Tags: Collaboration, corporate culture, partner friendly, alliance management
Posted Friday, November 15, 2013 at 08:00 AM by Norma Watenpaugh
Collaborative competencies are a distinct set of skills that effective alliance professionals have in applying the processes and practices described in the previous blog but collaborative competencies also include many ‘soft skills’. The softskills are ironically the most difficult...
Tags: Collaboration, competencies, alliance management
Posted Friday, November 12, 2010 at 03:00 AM by Norma Watenpaugh
Alliance Management Practices: Performers and UnderperformersAll business managers, not just those managing alliances, have been challenged with navigating a stormy economy. We had to make decisions on where to cut back, how to to make the best of diminished resources, and still achieve targeted business...
Posted Monday, August 23, 2010 at 09:00 AM by Norma Watenpaugh
Is your company partner friendly? Or is every attempt at collaboration an uphill battle? I heard one partner manager describe her partnership with one company as “hand-to-hand combat.” Another partner manager described his partner as “infested with partnering antibodies,” --...
Posted Thursday, March 25, 2010 at 11:00 AM by Norma Watenpaugh
Launching new website turned out to be much more of an involved exercise than I imagined. In this day and age, the website is the face of the company and so a new website caused us to rethink the business, the practice areas, and the positioning of PhoenixCG for the future. Since the founding...
Posted Thursday, December 3, 2009 at 11:52 AM by Norma Watenpaugh
Innovation takes many forms. We often focus on innovation as technological breakthroughs and indeed those are important to fuel corporate growth. But there are other forms of innovation which can be just as powerful and just as disruptive to the status quo in creating strategic competitive...
Tags: alliance, Collaborative innovation, competitive strategy, innovation, partnering, partnerships, value creation
Posted Thursday, November 19, 2009 at 05:52 PM by Norma Watenpaugh
Certification assures Collaborative Capability: Taking Partnering to the Next LevelI was fortunate to be featured in an interview for the Marketing Thought Leadership series with Linda Popky, Marketing Master and recently named one of Silicon Valley's Top 100 Women of Influence. In this podcast...
Tags: alliances, collaboration, collaborative capability, partnering
Posted Monday, October 12, 2009 at 02:50 PM by Norma Watenpaugh
One area in which social media is gaining traction is support services.When you combine partners in an interactive forum they become a self-help community.When you add customers to the mix, your partners become very competitive in demonstrating their expertise to the customer base.The result is...
Tags: Social Media, self service communities
Posted Thursday, September 10, 2009 at 04:38 PM by Norma Watenpaugh
Findings from a Survey Conducted by Phoenix Consulting Group, June 2009Well, arguably yes and no. Some technologies that might be labeled early Web 2.0 were in pretty widespread usage. Others such as Twitter are caught up in the tornado. Some, such as MySpace, already seem to be in decline.Blogs...
Tags: social media, partner marketing, ecosystem management, partner ecosystems
Posted Monday, October 13, 2008 at 11:17 PM by Norma Watenpaugh
Strategic alliances are often viewed as a strategy for growth and perhaps not always a strategy for economically challenging times. But many of the reasons that make strategic alliances a good idea in good times make them an even better strategy for uncertain times. What are these reasons to partner...
Tags: strategic alliances, importance
Posted Friday, April 25, 2008 at 11:17 PM by Norma Watenpaugh
The April meeting of the Silicon Valley/Norcal Chapter of the Association of Strategic Alliance Professionals featured a panel discussion on Coopetition. It turns out to be as hard to pronounce as it is to do. The panel often struggled with every verb and noun form of it: Coopetive, co-opeting. It...
Tags: alliances, cooperation, competition