Building an effective technology partner ecosystem
The word can be echoed from the halls of every high-tech company as gospel. Nobody denies the benefits of growing your brand and sales reach through partners. It’s a foundational piece of every company’s strategy. Large companies such as Microsoft and VMware have invested immensely in building large partner ecosystems to drive partner behavior to support their company and product strategy. Building the right partner ecosystem at the right time is a complex undertaking but can have a huge return in multiplying your footprint exponentially. Having been in a partnership role at both very early stage startups and larger public companies, I thought I would share some of my insights on how to go down the path effectively.
1- Define the objective
As simple as it may sound-this is the most difficult and critical item to nail. What does success look like? What return is expected from these partnerships and how to measure them? Are you looking for partners to generate direct revenue, build solutions to grow your use cases/fill a product gap and/or grow your marketing reach. It is ok to have multiple objectives and for this to also evolve as the company evolves. Evaluating the definition every 6–12 months is also a good idea. The objectives should also align with the sales, product, marketing and overall company strategy. For Example, at Nutanix, when we started the alliances team, the main goal was growing the number of solution areas we touched to increase the number of customer conversations. This started with some basic certifications to ensure our customers were comfortable running workloads on our appliance so VMware, Citrix, Microsoft and SAP certifications were critical. As the company grew, our partnership objectives evolved into focusing on increasing direct revenue and supporting our new products such as our own hypervisor (AHV). We grew sales through OEM partnerships with Dell and Lenovo. To grow AHV adoption we focused on building a rich partner ecosystem of certified solutions such as Microsoft SVVP and Citrix XA/XD to name a few. The next phase will be growing our API integrations with partners to further build our enterprise platform story.
2. Define how you measure success
Now that you have defined the objective, you need to measure whether those objectives are being met. The measurement may also change as the company and the ecosystem evolves. These are usually a mix of influenced revenue and milestones. At Nutanix we are also focused on building a partner ecosystem that builds confidence in validated solutions so we built a program called Nutanix Ready where partners validate their solutions via a test kit. This was needed for customers to feel confident running applications and their workloads on our platform. Success was simply measured by milestones in completion of these items. Once completed the measurement became influenced revenue associated with those solutions. We now have over 100 Nutanix Ready validated solutions and hundreds of millions of dollars in influenced revenue as a result of the solutions work that was completed.
3. Reporting and tracking success
If you don’t track it….it didn’t happen! Showing success is super critical. I coach my alliances colleagues on taking the time to build the right operational and tracking systems to show the return in the effort. Milestones are a check box and associated pipeline and bookings take more time to build the right systems and processes. For example, once a certification is completed did you close a certain amount of revenue that you couldn’t have closed without it? Are you driving marketing programs in that solution area and how much pipeline and bookings are associated? Any key wins where the customer quoted the work done as directly impacting the decision or did the alliance partner help close the deal? Tracking these wins via our CRM system in a repeatable way helped us build weekly dashboards to show pipe and bookings influence. Alliances also does a weekly Win of the Week (WOTW) to track progress of small wins as metrics.
Finally, it’s important to get in the habit of, at a minimum, quarterly reporting on the milestones and influenced revenue completed. I have built a reporting template on how to track and measure success for our strategic partners and the rest of the ecosystem partners we work with. This helps guide the teams MBO’s and allows them to check that the work they are doing aligns with the overall company and team strategy.
4. Investing at the right time
It is important to invest in the right resources, functional areas and systems at the right time. At Riverbed I ran the technology partner program and the strategy behind the Riverbed Ready interoperability testing process. We were really focused on building a large breadth ecosystem to drive co-marketing efforts to further the brand. This worked effectively at the beginning but once the number of partners grew to critical mass, the lack of a formal programs office to drive scale, build operational efficiency and self-service limited further success. Understanding your goals, the targeted partner make up, metrics for success and building the right team are all important elements to building an effective partner program.
I hope this quick guide helps you in starting down the journey of building your partner ecosystem. Happy hunting and reading!