As an ISV evaluates the costs and benefits of becoming associated with a large strategic technology partner, there is the need to weigh in the ability the ISV will have to access new release of the partner’s products.
As technology has evolved, there is an ever increasing need for companies of all sizes to get a broad variety of customers to test products in an alpha or beta state before being released to the market as a whole. In addition, it is essential for the company to have as many companion products as possible ready to go to market at the same time. As such, if the ISV plays its cards right, it will have access to early code, the beta program and potentially even beta testers as well.
The benefits of this should not be under weighed. By being seen as one of the first ISVs to market to support a major new release of the strategic partner’s offering, the ISV will gain valuable market credibility on many fronts.
Firstly, from the customer side. By being obviously closely tied to the strategic partner, the customer will feel that their decision to utilize the ISV’s product is a much safer one. For the customer to be able to perform major upgrades on their schedule without great concern for companion products is highly desirable.
Secondly, from the strategic partner’s perspective the ISV is clearly showing commitment and investment by ensuring their products support new releases. The helps further cement the relationship.
Thirdly, from the perspective of the analysts. An ISV that is an integral partner with one of the large strategic players is certainly seen as more viable and as such is more likely to get favorable reviews.
And finally, from the ISV’s perspective. Such early support can have many benefits from a sales and marketing point of view. The fact that the ISV is on top of technology changes helps assure customers that they know what they are doing and are current with the state of the art.
In summary, while the access to the early testing programs and early code may require extra effort, the broad array of benefits clearly outweigh the cost.

A few years ago I worked with a company that had over 350 partners around the world. They had been running a program of signing up every VAR, reseller and consulting firm that they could. As you can imagine, the performance of the partners left a lot to be desired.
The 80/20 rule applied many times over and got the company to rethink the approach to partnering, the structure of the program and the goals of each partnership.
Of the 350 partners, about 80% were in the US. Of those 280, about 80% were only had the company’s products in the tool bag in case a customer requested them or because the partner was seeking to benefit from being partnered with a larger ISV. Of the remaining 56, 11 were serious revenue producers. They were committed to the company’s products and had either built new practices around the products or tweaked existing practices to include them.
It became abundantly clear that we could segment those 11 partners into dedicated segments of the market. There was almost no overlap in customer base or targets. The 11 partners were delighted that their hard work and dedication was being rewarded with what amounted to exclusivity for their ideal target segments. Our company was delighted, since we ensured that we had those segments covered and the partners doubled down their efforts with us. An additional side benefit was that there was no way any of the 11 would work with one of our competitors.
Furthermore, we changed the pricing and support levels for the 280. About half of them dropped out of the program immediately with zero negative impact from a revenue or customer perspective. The remainder never required any support, so our costs dropped. The 45 in the “middle” were put into their own partner level and given clear guidelines for moving closer to us. They also understood that they could remain at their current level and we would support them at the time they found engagements that included our products.
One more item, the partners outside the US were mostly resellers that extended our reach and range. We categorized and handled them as such, which delighted them and further increased revenue.
The outshot of the change in the program, was an increase in revenue and a lowering of our costs, along with increased satisfaction within the remaining partners. Yet another indication that applying the 80/20 rule can add clarity to partner management.

A key driver in any channel decision must be the customer. It is, after all, the customer that we strive to serve. It is incumbent on the company to understand the customer and the pressures that they deal with in making a purchase.
In analyzing the customer’s purchasing process, one needs to take into account the costs associated with bringing on a new vendor. Frequently these are impacted by local laws and regulations. As such, there may be extensive due diligence that the customer has to perform on the vendor to ensure compliance with legal requirements as well as internal processes.
In partnering with a larger vendor or a systems integrator, one can build upon the master agreements that are already in place with the customer so that the purchase will simply involve adding an addendum to an existing contractual agreement. Such decisions can cement a decision to buy a product or service from a small company.
Another equally important decision is that by involving either a larger strategic partner or a systems integrator, the decision is more likely to be influenced and driven by the business unit. This can assist in raising one’s solution from that of a point product to being part of a larger solution or a key piece in solving critical business issues. And by being part of a larger, business unit deal, one can improve the price points and resist the discounting pressure when it comes time to close the deal.
In analyzing the strategic vendors and systems integrators that make up an ideal partner set, be sure to think about the needs of the customer first. Those needs will most often drive a sound partnering plan and ensure that you are seen by your customers as come with whom it is easy to do business.

One of the key benefits of aligning with one of the very large companies in the high-tech space is access to their tech centers. These big companies have a vested interest in partners building solutions that utilize a mix of their hardware and software.
For the small ISV, the benefits can be enormous in terms of accessing state of the art hardware and software at no, or very low, cost. In addition, most of the big players provide extremely valuable tech support within their tech centers. And finally, the tech centers often provide real-world testing environments at a scale that a small company could simply not afford. They are more than just a developer program that provides free software for ISVs.
Some have said that with the proliferation of cloud-based servers and services, that the cost advantage is limited. However, one should not lose sight of the broader picture and set of benefits.
An additional benefit is exposure to technical and marketing people and those contacts can prove invaluable if issues are encountered during customer deployments.
And finally, many times, we have seen that customers appreciate the close contact between the ISV and the strategic partner. There is the perception that the closeness of the relationship will lower the risk of buying the ISV’s solution. Combined with the reality of being able to ensure that the ISV solution does in fact work well within the infrastructure from the strategic, this provides a great advantage for the ISV.

Most smaller independent software vendor (ISV) solutions have an affinity with the ecosystems that large vendors create around their own strategic initiatives. It frequently behooves you, as the smaller ISV, to become associated with that ecosphere as a means to refine the positioning of your product or service in the mind of the customer. Thus a customer who is working with the large vendor’s strategic initiative will find it easier to think about adding on your product to the solution mix. You can also avoid the issue of appearing to be an out-of-place add-on to a project that the customer may have. For example, imagine that a large insurance company is switching from regular FTP, as a means of transferring files between branches, to the ftp solution called WebSphere® FTE that is an integral part of WebSphere from IBM. For the insurance company to then think about adding a piece of auditing software to the mix is much more straight-forward if the ISV has positioned themselves as an IBM business partner and part of the WebSphere ecosphere.
In approaching the market in this manner, the ISV is making the customer’s decisions and actions as easy as possible. Thus the ISV will gain additional market efficiencies through this partnering initiative and make the small investment well worthwhile. Additionally, IBM’s job is made a little easier by having a large number of ISVs building supporting products for systems such as WebSphere.
A highly valuable by-product of this could be a closer working relationship with the large vendor and access to additional marketing or technical assistance.
This is not the kind of partnership that brings new sales to the table, but it can certainly speed deals along. In this case, there is a clear benefit to all parties – the customer, IBM and the ISV.

WebSphere is a registered trademark of IBM Corporation.

Strategic alliances are a great way to expand the ecosphere within which you operate.  It is essential to select the optimal strategic partner with the optimal ecosphere for the customers and prospects you are trying to reach.  You can realistically only establish a very close relationship with one of the major players.  You can have more distant relationships with others, as long as doing so does not confuse your message to your customers and prospects.