Monday, August 18, 2008
Let’s face it, the partner model of most large software vendors is in a state of rapid change. There are a host of reasons for this change ranging from the new, emerging business models like SaaS, to simple market economics, but the change is real. I suppose we’ve used the word “ecosystem” off and on for a few years and it definitely falls into the “trendy” word bucket (and we applied the term to everything from customers to partners). Nevertheless, the use of the term seems to fit where we’re going with our view of the software partner program model.
I’ve blogged and talked a bit about P2P networking already so I won’t go back through that topic, but I do want to look at the shift to a vendor led ecosystem. The point to point partner model that is by far the most prevalent one applied to alliances, partners and channels models is becoming much less effective. Several leading software vendors have started using the ecosystem term to describe their partner programs, including SAP. Even more traditional firms like Autodesk are starting to understand that their current models are not as effective as they could be.
So what’s a software ecosystem and why do we care anyway? Wikipedia defines an ecosystem: “denotes the physical and biological components of an environment considered in relation to each other as a unit” This definition starts to get to the importance of the word and what we mean by applying it here. The key to the ecosystem model is “interdependence” (and not codependence, by the way). This is where the P2P effect is most pronounced and programatically the largest change required by most vendors. IBM has a very developed P2P model / program called ValueNet. Other vendors are starting to develop programs that encourage or even facilitate P2P solution development and go-to-market. This interdependence changes the interaction model of the partners and the importance of that interaction. If the success of my business is really tied to the success of several other businesses, and in fact to the success of my customer as well, my priorities have to shift. And this is not just a shift in strategy, my business tactics are also different. My go-to-market plans are different and even my sales compensation models have to change and align with my new business plans.
We’re still in the midst of this shift and will be for some time, but look for this change to accelerate over the next 2-3 years. The partners and vendors that embrace this shift will gain competitive advantage. The ecosystem model will have an added effect of causing partners to coalesce around several large “centers of gravity” as we move to vendor mega-economies around the major software vendors like Oracle, SAP, IBM and Microsoft.


