Coral reefs, or how to build a vibrant, healthy partner ecosystem

When used in the business world, an “ecosystem” is a community of companies and their resources interacting as a system.  Think of coral reefs. Coral reefs are some of the most diverse ecosystems on the planet, teeming with peacefully coexisting marine species that engage horizontally and vertically. How this applies to the business world is that businesses and coral reefs follow the same rule for building successful partner ecosystems: divide the loot the right way. It sounds easy, but the vast history of struggling partner ecosystems is proof that it's hard to apply in practice.

Take a look at Microsoft: In the 90s a great partner ecosystem sprung up around it. Microsoft added value by building a great product, but didn’t do much else. There were no co-op dollars or big marketing programs to support the partners. So what made the Microsoft Solution Provider ecosystem such a success? The partners sold the product. The partners marketed the product. The partners supported the customers. The partners implemented the solutions. Most importantly, the partners built intellectual property on top of Microsoft products, forming a healthy ISV ecosystem that completed the product.

Fast-forward 10, maybe 15 years. Microsoft, similar to Infor and NetSuite, started taking over the marketing and creation of vertical solutions from their partners. Think about it.  Oracle and the rest of the vendor community dove right in to create many such solutions to meet customer demand. Perhaps the vendors felt that their partners were not fast enough, not good enough? But were those software product vendors really better in creating vertical solutions?

Vendors took over more and more of what used to be the partners’ roles. As a result, the partners' position in the value chain kept changing. When leads dried up, some partners felt that they needed their vendors to also supply customers and to market the partners’ value on top of doing product marketing. When vendors took over most of the marketing, they took another step down the slippery slope of a partner ecosystem gone bust. At some point, they even began communicating directly with customers, and in many cases ended up selling the product directly and cutting out the partner completely.

Ten years ago partners used to bring value in local implementations--now the landscape has changed. Web meetings and online tools have redefined what it means to offer implementation as a local expertise. If (local) installation is the only value added by partners, the ecosystem soon loses most of its relevance.

Well then, what do you do? How do you build a healthy partner ecosystem? It’s simple. Remember the coral reefs?. They are able to begin life and sustain themselves because they do it together. Set the bar high on what it means to be a good partner for your business. This will create a robust partner ecosystem — a throwback to the heyday of the partner as the customer’s hero — good business for everyone. Don't think of it as replacing your partner, but helping partners be the best they can be. And so will you, with the product you create.

Your not-to-do list:

  • Do not take over full demand generation. Partners need to know where to find their prospects and how to talk to them.
  • Do not do sales for your partners.  Sure, help partners develop the sales capability, but let them exercise that sales muscle themselves.
  • Do not build deep vertical solutions. Partners have a great opportunity to turn special expertise into intellectual property and unique services to stand out in the crowded marketplace.
  • Do not offer direct support by taking over the dialogue with the customer. This robs your partners of getting to know their customers and the technology implementation.