Thursday, July 31, 2008
The concepts behind P2P networks are not new, and more progressive partners have used the approach for many years. The term and its more widespread adoption are new as are the software vendor programs that facilitate partners building P2P networks. Most partners in the not so distant past resisted P2P networking, mostly because of the perception that they were giving up some business rather than gaining an advantage. This was especially true of Value Added Resellers (VARs) whose business models often included a smattering of activities ranging from the software sale through SW installation, customer training, light SW customization and tier 1 support. In some ways this “we’ll do anything” attitude was a precursor to providing a full solution.
Now VAR’s are starting to talk P2P and to develop collaborative solutions. This is a significant step and serves customers and the VAR business well. IDC’s research shows that partners that engage in P2P networks increase revenue and profits significantly (Insight, Doc #207912 / Jul 2007, Charting the Partner-to-Partner Business Model: IDC Focus Group Findings, By: Stephen Graham, Darren Bibby, Paul Edwards). So how does a partner build a P2P solution offering and what should the partners involved look for in the relationship? First let’s understand what’s desirable in a P2P network and then we can look at the details. P2P solutions are market (in other words customer) driven. They solve a business problem (or several problems) and are focused on the customer. They are most often focused on an industry vertical (or sub-vertical) and are built to be 90% out of the box solutions. The network then, must provide the necessary components of a full solution; industry vertical software, vertical process knowledge, implementation expertise, customer relationships, etc. What we often see is a combination of a VAR and an ISV...but the network could also include a system integrator if the VAR doesn’t have the vertical process expertise to work through the customer issues.
The key elements of building the successful P2P network are:
-Trust - the network most often evolves from existing relationships
-Legal framework - a trust relationship is not enough, the partnership must be built on a sound legal and formal framework
-Everyone participating in the network must behave like a node, including the vendor.
-Build the partnership on a sound financial basis. It’s essential that all participants clearly understand the financial implications and advantages of the relationship.
-Focus on the customer problem / opportunity.
-Get involved in networks that utilize your core business assets / strengths (which of course presupposes that you know your core strengths)
