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STRATEGIC SOFTWARE PRESS
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DECEMBER 2001 ISSUE: PARTNERING IN THE GLOBAL ECONOMY
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Strategic Software Partners Ltd. SSP House, The Old Bakery, 44b Commercial Way, Woking, Surrey, GU21 1HW,
Tel: +44 (0)1483 747 812 Website: www.sspltd.com
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Established in 1995, Strategic Software Partners specialises in helping enterprise software companies grow locally and globally, by providing consultancy, market research, business planning and finding partners in the UK, Europe, the USA and beyond.
SSP has the resources, expertise, knowledge and practical experience to enhance, complement or even replace your business development capabilities.
We have decided to use the knowledge that we have gained in a newsletter to perhaps eradicate some of the myths relating to technological issues.
If you would like to know more about SSP then please visit our website, www.sspltd.com or contact us on +44 (0)1483 747812
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Company Focus
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This newsletter is read by an audience of 15,000 key decision-makers in the IT software industry.
In this space we are offering you the chance to be included in future newsletters.
For more information on how you can reach potential new partners in the UK, France, Germany, Italy, Spain, Benelux, Nordic region, USA and Middle east email us at newsletter@sspltd.com or phone +44 (0) 1483 747812 and ask for Graham.
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 Striva Corp., a venture capital backed international company with headquarters in the Silicon Valley and London, are employing SSP resources to conduct a search for OEM partners in the UK and Germany for their innovative database integration tool Detail. Detail provides the easy to implement solution to the common problem of legacy database access and is rapidly positioning itself as the best available option in the marketplace.
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Sales Management Solutions Ltd. This newly formed UK company based in Oxford have asked SSP to find them potential reseller, systems integrator and OEM partnerships for their their sales management tool. Their tool developed by and for sales managers and salesmen, has received encouraging press reviews as well as warm feedback from initial users.
 Sagent have created a powerful presence since we first helped to establish their European operations in 1996. Sagent are now looking to find a strategic partner for their three tier business intelligence and total data mart solutions in Italy.
 jBASE Software Ltd, a subsidiary of the new publically traded Swiss group, Temenos, have asked SSP to accelerate their European expansion into Italy following extensive market research carried out by SSP at the beginning of this year. jBASE specialise in transaction based web development systems that are not only scalable across the Enterprise but coexist and significantly enhance all legacy and relational databases
 Xmediaries Ltd. is looking to create a joint venture or find value added resellers for its revolutionary new product - which extends the reach of ERP. €oeCrossroads€ brings about a convergence of knowledge management, relationship managemen
t and CRM in a new dynamic framework. |
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Planning advice from Adaytum
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 Energy. Enthusiasm. Entrepreneurship.
These three words denote essential qualities for any business start-up. Translating these three Es, however, into a functioning business with customers, sales and ultimately return on investment for investors -- can be a perilous process. What every company - even a small start-up - needs is fast insight into future operating performance. But how can you achieve that?
To read more, click here
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Partnering: The Key Points
In response to a number of clients and from the feedback received at seminars that we have spoken at, it now seems appropriate that in our monthly publication we share our observations, experiences and understanding of creating and managing partnerships in the enterprise technology marketplace over the last twenty years.
Sometimes it is assumed that "To Partner" in business is essential and there can be no doubt that the benefits of successful partnerships can be enormous. Unfortunately for every success there are tens of failures; failures that probably could have been avoided or turned into success stories if the assumptions and expectations of both parties were in alignment. So, what is a 'Partnership' and why partner anyway?
Perhaps one of the best (and most honest) definitions we have encountered comes from the Channel Manager of Data Distilleries Ltd., Dason Bodily:
"A relationship where there is mutual exploitation"
In American parlance this is the classic "win-win" scenario but a more fundamental objective is that both parties make money!! The question is how many of us have lost sight of that goal?
In today's fast paced global economy there are very few companies that do not partner in some shape or form. For the majority the need to partner is resource driven, spurred by a desire to reach customers that could not be reached through your own organisation and to make sales that you would otherwise not make..
The Types of Partnership
Without wanting to become the first page of a legal agreement, let us define what we understand to be the principle and most common forms of partnership:
Strategic Alliance
A relationship where the perceived value of a partnership will enhance the reputation of both parties. Typically, these have the greatest PR value but their implementation at the 'street' level can often be disproportionate to the return.
Technology
Complementary technologies that provide a solution to the customer. These are often short term until one party has either bought the other party or developed their own solution.
OEM
A throw back to the days when hardware companies made money!! For software companies this is where one vendor re-licences a technology as their own. Benefit to the OEM partner is cash. Draw back is no brand visibility or the ability to use reference accounts.
Value-Added Distributor
Interchangeable with Distributor or Agent in the sense that this organisation is the de facto representative of your organisation in the market and provides marketing, sales and first level technical support direct to customers or through a network of resellers.
Reseller
An organisation whose business is to sell product.
Value-Added Resellers
Organisations whose business is to provide solutions of which products and services are combined to varying degrees based on the complexity of the solutions. Typically these organisations fall into two categories:
Tier 1 System Integrators
Organisations that go after the £1million + plus projects (although) under the current climate these are fast disappearing. They include the likes of EDS, IBM, Accenture, Debis and CAP. Projects and NOT products always drive these companies.
Tier 2 System Integrators
Organisations that typically go after the lower value projects and are more sensitive to the value of products (or tools) that are a higher value to the customer in the solution provided. Driven by BOTH project and product revenue opportunities
Joint Ventures
Could be Value -Added Distributors or Value-Added Resellers where there is a clearly defined buy back of stock and an exit strategy for the owners of both parties. Ideal when YOU know you will eventually set-up a subsidiary in the market
Choosing the right partnership
As companies look to increase revenues while reducing overheads a successful partnership strategy is paramount. Unfortunately the likelihood is that the partnership will fail. Why? Let us explore the common mistakes that are made, as well as examining what types of partnership are more likely to succeed.
Geoffrey Moore, in his excellent book, "Crossing the Chasm" brilliantly illustrates the technology life cycle and how buyers perceive technology companies as well as the characteristics of these types of buyer. Similarly, not all partnerships will be appropriate depending on two factors:
- Your positioning in the technology life cycle in your own market.
- You're potential positioning in new and international markets.
The Technology Life Cycle
Innovators (tech. enthusiasts) and Early Adopters (visionaries)
 For many companies this is the only domain that they ever experience. Innovators and Early Adopters are prepared to take risks because 'mainstream' suppliers don't meet their needs or the new product is technologically superior, more economic etc..
In terms of partnerships, OEM's and Valued Added Resellers are likely to be the most effective and possibly some of the Tier 2 Systems Integrators.
A common error that we see all too often is small companies trying to form strategic partnerships with the Tier 1 Integrators where the effort is totally disproportionate to the return.
Another common failing is that although you may have 'crossed the chasm' in your own market, when you enter a new overseas market, you probably require totally different partners to help you attract those early adopters.
Early Mainstream (pragmatists)
 As Geoffrey Moore advocates in "Crossing the Chasm" this is the phase when all resources should be geared towards reaching as many customers as quickly as possible. The demand has been created and this is the time to capitalize on it. Ideal partners are Joint Ventures as these can anticipate the need to create subsidiaries, assuming that you have not already done so. Similarly, this is the time to reach all markets whether they are horizontal or vertical. A vertical strategy can often best be served by focused Value-added Resellers or the appropriate Tier 2 Integrators.
Late Mainstream (conservatives)
 For companies who have been accepted as a market leader the best partnerships will be those that can accelerate sales because of their position as the market leader. This is the time when the Tier 1 Integrators will probably come to you!! This is certainly true of the Resellers who can reach vertical markets where your direct sales force has no knowledge.
International partners
In the next newsletter we will examine how the technology life cycle can be applied to choosing international partners and the issues on successful selection will be examined.
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Strategic Software Press is published by Strategic Software Partners Ltd. All rights reserved. Contents may not be
reproduced in whole or part without the written consent of the publishers. Copyright 2001.
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