Success in numbers
In recent years, there has been a lot of talk about partner-to-partner (P2P) collaboration where companies focus on what they do best and partner for everything else. The announcement of new P2P collaboration tools and enhancements to Microsoft’s commercial marketplace suggest the model is fast gaining traction.
Despite what people might believe, collaboration in the IT industry is nothing new. We might think it’s novel because we don’t hear about it that often, possibly because it can still feel relatively new at a channel level and they rarely shout it from the rooftops. But there’s a long tradition of collaboration and ‘co-opetition’. By way of example Michael Conway, director at Renaissance, notes that Apple is one of Samsung’s biggest customers even though the companies are fierce competitors in the smartphone market.
He points out that there are a number of global companies that frequently contract people and businesses for specific parts of a project. “It’s no different from the construction industry,” Conway says, “where the big contractors bring in specialists for plumbing or air conditioning”. One company owns the contract but uses sub-contractors to deliver many parts of the overall project. In many respects, it’s similar for large-scale IT projects where the big companies sub-contract in specialists.
It’s more an issue of who owns the relationship with the customer and of trust. “Like all relationships, you’ve got to get into it with a level of trust,” he remarks. “You have to expose your customers to some extent, so you need to make sure that you own that relationship and manage that relationship. Whatever you do, don’t step back and let a third party come in and manage it because if you step back too far, you can potentially leave yourself exposed.”
Conway says that people are far more likely to cooperate with those they already know or who have been recommended to them. “If you don’t know about them, you need to be very cautious about the rules of engagement.” Nevertheless, when it works, the benefits of collaboration can stretch beyond the first engagement. “There’s potentially the opportunity for the company you’re collaborating with to feed you more work in the future.”
Microsoft has been banging the drum for the partner-to-partner model for some time now. For example, in a blog post from June 2017 in the run up to Inspire, cloud profitability lead Melissa Mulholland suggested that partners should “consider the benefit of alliances to augment their offerings”. Working with other partners could enable them to deliver on an area of expertise where they might otherwise be lacking, she added.
Mulholland quoted research from IDC that stated 49% of channel businesses offering specific business functions collaborated with other partners to enhance their overall solution. The reasons why were obvious. Many did not have the people, skills, expertise, or capabilities to meet the needs of all customers (current and potential) in their market. “Partnering can reduce the time and cost of going to market, increase your reach, build market share, help you win new business and increase your overall profitability by leveraging your IP in new ways,” she argued.
She also drew attention to another IDC study that found partners who associated 30% or more of their revenue with partner-to-partner collaboration grew the fastest. Mulholland added that those channel companies interested in partnering with others could use the P2P Maturity Model, developed by the International Association of Microsoft Channel Partners, which offered “a framework of 10 business functions and four levels of maturity to consider when organisations look to partner on a deal, a campaign, or a business”.
Microsoft says that the P2P model is designed to enable joint go to market activities between partners in its ecosystem, accelerate each partner’s time to market, increases sales and grow revenue. It claims partners can increase their revenue by 10-20% selling solutions from one or more partners, achieve three times faster time to market, close deals up to six times faster and reach more customers with three to five times larger joint pipelines. It estimates that co-sell revenue is worth more than $8bn a year.
So there’s no doubting the attraction of the P2P model but that doesn’t mean channel businesses should dive in without doing a bit of research. As Mark Kurtz, Global Partner Marketing Advisor at Microsoft, warned during his presentation at Inspire 2019: “P2P is not for everyone. It’s a mindset. You have to be willing to be in concert with your partner from day one.”
That isn’t something you can make up as you go along. So it’s important that partners have a clear idea what they want before they engage with the P2P model and of what they want to achieve. What do they want to get out of it and what value can they bring to the partnership? Without knowing the answer to those questions, they could struggle to make the model work for them, any potential partners and customers.
One software company which is working hard to make a success of the P2P model is Nimble, a provider of CRM for small business teams using Office 365. The company is the brainchild of Jon Ferrara, co-founder of Goldmine, one of the pioneers in the contact management and CRM space. Nimble is an enthusiastic participant in the Microsoft Commercial Marketplace and has been involved since the pilot was launched. Partnering with Microsoft has given Nimble the ability to take advantage of the software giant’s global reach to take its solution to market and use Microsoft’s channel partner community as Nimble’s global team in the field.
As Ferrara remarks: “We’ve found the best way for Nimble to reach customers is through trusted resellers. Once resellers recognise the value Nimble offers, they walk us right into their accounts.”
The P2P element comes in through the vendor’s focus on using the partner network to work with channel companies that have already been selling business solutions on top of Office 365, such as Dynamics and Power BI, to educate other Microsoft partners about using Nimble and Office 365. One of Nimble’s top P2P partners is Hikari. For those unfamiliar with the name, Hikari was formed after the Emit solutions division, which covered areas like CRM and business intelligence (BI), was spun out of the parent company in 2018 by managing director Eamon Moore.
Moore argues the move was necessary if there was any chance of adopting the P2P model. “At Emit we had a managed services and cloud business, as well as a data and business solutions division covering the likes of business intelligence, data analytics and CRM,” he explains. “That was great for Emit customers as they had a wide range of solutions and services to avail of. But it was bad for the P2P model as many Microsoft MSPs and CSPs weren’t open to collaboration because we had competing businesses on the managed services side.”
He claims Hikari’s own experience with Nimble is a good illustration of the P2P model. “With multiple applications across the organisation, including Office 365, Autotask, ConnectWise, Skype for Business, Xero, Twitter, and LinkedIn, Hikari found it cumbersome to manage all of our data in disparate systems. We needed to find a simple CRM system that would give us a single source of truth and help us grow our business.” Using Nimble enabled Hikari “to unify contact data and conversations from multiple systems, enrich the data with social and business insights, and use that data to engage effectively with prospects and customers”.
Moore believes that the P2P model is the smart way for SME partners to help customers delve deeper into areas like CRM, business intelligence, data analytics and artificial intelligence. The P2P model helps them assist the customer with those requirements while securing the business they already have.
But he stresses that “trust and transparency is key to the model”. It works very well when there is “a clear definition of the services that each partner will carry out for the customer and even clearer again is when two partners come together and don’t have elements of their businesses that compete with each other”.
As a specialist provider of data solutions, Hikari has found partners “more open to collaboration” through the P2P model because it is not in a competitive situation with them. Moore says this highlights “the key points for a successful P2P model: specialisation, trust, transparency and flexibility”.
As part of its growth strategy, Hikari works with Nimble and Microsoft “to educate CSP partners and MSPs on the value of data and offer a combined route to market for all of our solutions”, he adds. One example of this is IT.ie. After Hikari demonstrated Nimble to its fellow Microsoft partner, IT.ie “immediately saw the value and started promoting Nimble to its customers. We all win in this new partner-to-partner-to-partner motion.”
Ferrara describes the benefits of using Nimble “as a Trojan horse [for partners] to access their customers’ business decision makers and sell them Microsoft’s crown jewels: Azure, Power BI, PowerApps, Microsoft Flow, and Dynamics 365”. He says that Hikari’s experience in selling business solutions on top of Office 365, like Dynamics and Power BI, is important in helping “to educate other Microsoft partners about digitally transforming their practices using Nimble and Office 365”.
He echoes Moore’s point that Hikari can empathise with the challenges faced by customers and prospects in the SMB market because it has experienced “many of the same challenges they faced. By using Nimble internally and adding it to its product offerings, Hikari now offers CRM-related services, delivering greater value that differentiates them from the competition”.
Ferrara believes customers can benefit from partner collaborations because each partner has a different level of expertise and brings different values to the table. “Today’s customers expect more; if a customer has special needs that go beyond the partner’s expertise, the partner can invite someone else to step in,” he states.
Moore stresses that flexibility in the commercial arrangement is very important. “Some partners will want to front the engagement, others will want to own the financial aspect, others the after service support,” he says. “Partners engaging in a P2P model need to understand and appreciate the needs of the other partner and be flexible in their approach.”
But he warns that there are occasions when trying to put together a P2P model that suits both partners can confuse the customer “who is the important benefactor in a P2P project. The customer needs transparency and clarity and clear lines of responsibility and accountability, otherwise frustration and dissatisfaction will creep in”.
Ferrara says a successful P2P model is all about the value. Without it or if the value is distributed unevenly, the P2P approach is likely to struggle. “It all comes down to the value being portrayed properly,” he observes. “There has to be value for both partners and the customer as well. Partners have to trust each other and foster their relationship – that’s the only way a P2P model can work and grow.”
It seems strange to be talking about partners having to trust each other when so much of their identity seems to revolve around that word. They don’t call themselves trusted advisors for nothing. But trust is a much simpler commodity when it involves two parties with very clearly defined and non-competitive roles. If a partner provides a customer with reliable and effective IT solutions and services over a period of time, the customer can develop trust in that partner because it’s a beneficial relationship. There are no competitive pressures, stresses or strains.
It is slightly harder when the relationship is between channel partners because there has been potential for conflict. But things are changing as partners realise there are limitations to their capabilities. For many channel businesses, it’s no longer possible to be all things to the customer. But what they can do is focus on what they do best and appreciate that there are many similar businesses to them who can help plug the gaps in their offerings. If it keeps the customer happy, why rule it out? And who knows, they might be able to return the favour for other channel companies.