This morning, over my morning coffee, I came across Lubor Ptacek’s thoughts on the End of the Partner Ecosystem. I started reading the article as a skeptic and I finished reading it confident in my disagreement. I quickly decided that I needed to take the time to refute Lubor’s points in a post rather than through Twitter.
Before I could find some time to write this post, Cheryl McKinnon tweeted that the Difference is that new [partner] ecosystem is developer/API driven, not sales driven. I think that observation, while accurate, only tells part of the story.
Before diving into that, let’s discuss what Lubor got right.
Software as a Product
Lubor’s primary contention is that with the advent of the cloud, customers don’t need to use partners to setup, deliver, or support software anymore. As the solutions simplify, the need for certified trainers for the software is also dropping.
Lubor still sees a need for Independent Software Vendors (ISVs) to help make the most of the software products, but in a diminished capacity. This is where I disagree with Lubor. The need is going to remain strong.
Simple is Just the Start
When I was looking at a cloud offering for my new Association Management System (AMS), I was frustrated by one cloud provider because they didn’t understand my business. My reaction reflects the trend I’ve seen in selling Content Management solutions as well, people want solution providers that understand their problems, not just the technology.
This is where the partner comes into play. Most Content Management vendors can’t maintain deep domain expertise in every vertical that they wish to do business. They have to partner with companies that have that expertise. For some larger clients, the software vendor may need to find a partner that knows that specific client very well (a common scenario with US Government agencies).
These partners know how to use tools to address the most pressing problems of a vertical. They may even have solutions built on top of those software platforms that already address many of the requirements.
Simple systems may make training easy, but they don’t always speak to how any company does business.
Plugging it Together
One thing I’ve found myself doing is ruling vendors out of contention because of poor developer support. While I don’t have massive development plans for AIIM, our desire to tie the systems we have together isn’t a flight of fancy. We have valid needs to tie our AMS to our website and both of those to our marketing automation system.
That’s where partners come into play. When you first get a system, it is easy to use the vendor to perform basic integrations but life doesn’t sit still. The odds are that every system will be replaced before replacing the system just purchased.
For these off-cycle changes, depending on a vendor can be expensive and developing people in-house is a challenge, especially when you don’t have full-time needs. In the Content Management space, this is more pronounced. Historically, the vendor’s professional services can be expensive and building in-house talent takes a lot of time and effort.
Partners will continue to thrive. Business have to be dynamic, typically more dynamic than traditional software providers. Cloud-based software providers can be more innovative, but have to remain all-things to all-clients.
This innovation gap is where partners will continue to thrive, offering system and vertical specific innovation to organizations. I couldn’t succeed as a CIO without good partners and the software providers I worked with as a consultant live and die on the success of their partners.
From every angle, partners are here for the long haul.
5 thoughts on “Partners Still Critical for Software Vendors”
Thanks for your comment and for your post, Pie. I have actually conceded in my post that ISVs remain important for any software platform. ISVs are not going away. What’s going away is the notion of an ecosystem that consists of many types of “species”, not just ISVs. Today, many resellers and system integrators are struggling to figure out their role in the cloud economy. In the end, they may survive or even strive but they will probably have to evolve into new types of species.
Well, you did say that ISV’s would diminish, which I disagree with strongly. I also feel that only the large vendors really had an “ecosystem” as you just described it. For most enterprise software products, resellers just got in the way. Microsoft and Oracle pulled it off but the CMS vendors never pulled that off fully. I also don’t see those ecosystems going away short-term as people aren’t going whole-hog to the cloud yet.
To be honest, I think we see similar things, just balancing them differently.
The Partner Ecosystem is NOT going away. Yes, there will be a “balancing” but not a mass extinction. If anything … the extinction will occur on a much grander scale as the big vendors continue to consolidate.
It comes down to the age old argument between Best of Breed or Single Source Vendor. Customers want to buy solutions. Sure, customers want one throat to choke. The SI’s and ISv’s have (for the most part) figured out how to make this happen. Yes, Cloud based offerings have added some complexity to this, but the underlying factor (or metric if you prefer) is still … did the customer get the solution they paid for? Customers still vote with their wallets.
The Future of Vendors
There will be some vendors that step up … by adding Services personnel to be that one throat to choke. Many have already done this and it will continue. As Lubor said, it’s a balancing act. However, there is a significant cost and a long term commitment to do this on their bottom line. I’m not sure they’ll be able to match top line revenue to offset this cost. Which is why consolidation will continue. I predict there will continue to be a lot of consolidation across all of the traditional segments of the ECM, CRM, ERP, SCM, PLM and all the other Three Letter Acronym (TLA) markets.
Partner Ecosystems are the Secret Sauce. Partner Ecosystems help the customers and the vendors by acting as innovation engines, as delivery services and as a sanity check on the value of the products (and services) the big vendors provide. Partner Ecosystems provide a Free Market element to the tech industry as a whole. If the Partner Ecosystem falters … the industry falters.
What does the Partner Ecosystem do best?
They Adapt! I predict there will be changes in the way vendors go to market. I predict there will be a change in the way partners work with vendors. Cloud Computing is just another way to deliver products and services. The smart partners will adapt. The smart vendors will adapt with them. The end result is … The Customers get the Solution they paid for.
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