The cloud continues to disrupt the software industry, due to the demand for data processing, storage and analytics, encouraging companies to think hybrid and multi-cloud solutions. Currently, 60 per cent of corporate data worldwide is stored in the cloud.
Furthermore, the percentage of organisations committed to, or interested in, a hybrid cloud strategy has grown from 81 per cent to 93 per cent since 2017, and that figure will only continue to increase.
This shift was accelerated by a clear need for organisations to digitally transform, many businesses realised that without the right resources in place, digital transformation might not be possible. It’s clear the benefits of a cloud-first strategy are significant, but we can’t forget the complexity which comes with it.
This complexity is where the power of partnerships comes in to help. In fact, more than 75 per cent of CEOs with businesses in the technology, media, and telecom sector rate partnerships as ‘important’ or ‘critical’ to their business, according to PWC.
The right partner
For many companies, such as SMEs or start-ups, finding the right partner who has common business goals, and the necessary expertise is essential. Here, I’ll touch upon three of the key benefits of a partnership.
First of all, the partnership must add value. To deliver maximum value, IT systems must work without a glitch. Many companies have worked on solutions to ensure compatibility and ease of deployment in the cloud – this alone has lifted major burdens for many customers. This is a huge value-add that can drive sales to both new and existing customers.
Next, the ability to join up marketing and sales efforts is an additional benefit of partnerships. If two small companies partner in sales as well as technology, they effectively double their resources.
When smaller companies partner with an enterprise scale company, the benefits to the smaller company in terms of marketing resources can be even greater. Every new partner relationship creates opportunities for new conversations with both prospects and current customers.
Third, the ability to problem solve with ease and at pace is an additional benefit of partnerships. This gives companies the ability to create teams with subject matter experts from both companies who also have complementary areas of technical expertise.
Collaborating to solve different aspects of a problem can drive innovation. In today’s hybrid, multi-cloud environments, problems require quick decision making and a willingness to experiment.
In the case of independent software vendors (ISVs), partnering with a larger enterprise with high brand recognition adds to their credibility in sales situations. Also, ISVs typically have specific domain expertise that would help a large company with a horizontal offering (such as networking, security, or IoT) provide a solution that addresses the needs of a vertical niche (for example, healthcare, manufacturing, or automotive).
Companies who establish strong partner relationships with large enterprises (such as cloud providers) often obtain privileged information that gives them a significant time to market advantage in areas such as cloud-native products. This is critical in establishing market share.
Key traits
In the technology sector, companies often target potential partners based on their intellectual property, specific technical capabilities, and access to new customers. However, there are other important considerations beyond these basics.
Firstly, you need a partner you can trust. Trust is a necessary foundation for all partnerships, never under-estimate this. Forming partnerships can involve a great deal of negotiation, and mutual trust is essential for success.
In addition, partners should be able to offer customers a clearly understood joint value proposition. This includes both business benefits that impact customers’ bottom lines or market share, and technical benefits that appeal to potential customers’ IT departments.
Next, you need a deal you can live with. Larger companies will likely have partner programmes which have clear responsibilities, financial arrangements, sharing of intellectual property and so on.
These programmes should have some degree of flexibility, but the terms should be equitable as stated. Deals between similar-sized companies need to be spelled out in detail. This is very important for maintaining smooth long-term relationships.
It’s also critical not to overlook external factors. That could be anything from regulatory, tax, legal and/or accounting issues. There should also be coordination and teamwork and, finally, great partnerships often involve an open innovation ecosystem. The ideal ecosystem consists of trusted relationships that allow deep integrations.
Ultimately, partnerships can improve your bottom line, give access to IP that can make your market appeal stronger, and they also give you access to a new customer base. Partnerships are powerful when you pick the right one.
This article appeared in our March 2023 print issue. You can read the magazine in full here.