Webinar: Optimizing for Telecom Network Deployment Services Opportunity in 2023

The telecom infrastructure services (TIS) industry is a $35 billion market that is expected to evolve and expand rapidly in the next 10 years. Government funding is driving network expansion projects by major telcos, and a whole ecosystem of large, established and interrelated vendors are jockeying for positions on those projects.

 

That dynamic is making it more challenging than ever for telecom network deployment services providers to compete and win. Labor shortages, wage inflation, workforce aging and other trends are pressuring vendors’ ability to serve their existing customers, much less innovate and/or compete with a growing ecosystem of peers.

 

TBR has helped telecom infrastructure services vendors navigate these dynamics for nearly 30 years, and we regularly hear firsthand the problems that TIS companies are facing.

 

In this FREE webinar you’ll learn:

  • The current state and future outlook for telecom network deployment services
  • The four mega challenges facing TIS vendors
  • How vendors can overcome these challenges to pursue the market opportunity

 

 

 

Previous TBR webinars can be viewed anytime on TBR’s Webinar Portal. For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Top 10 Impacts for CI & MI Teams in 2023

In February 2023 TBR surveyed its client service teams on the state of competitive and market intelligence in 2023. One megatrend stood out in those results — change.

 

Change comes in many forms. At the highest level, changes within the markets companies play in place new burdens on the type and volume of intelligence. Teams, budgets and organizational structures change constantly. Change can also be its own challenge; markets and teams change, but the need for CI/MI and the deliverables that CI/MI professionals create does not change.

 

Change typically requires the most precious resource CI/MI professionals have — time. Time is under constant pressure, as CI/MI professionals are asked to do more with less. In many recent cases, this even means doing CI/MI without the benefit of a shared and centralized budget, resources and leadership structure.

 

As changes continue to disrupt the profession, CI/MI teams and professionals will increasingly look outside for help. They will seek out technologies, third-party analyst and research firms, and other tools that can help them automate and optimize CI/MI and free up available time for the most high-value, impactful projects.
 

Download State of Competitive and Marketing Intelligence in 2023 White Paper



 

Top 10 Impacts for Competitive and Market Intelligence Professionals in 2023

  1. Ecosystems of Competition

Demand for CI/MI continues to grow because markets are becoming more competitive. They are not just crowding with small, ankle biter competitors, either. Markets are converging and overlapping, and major established technology vendors are encroaching on each other’s territory. This creates an ecosystem dynamic in CI/MI for technology firms, in which vendors need to not only track their usual suspects but also assess how the broader ecosystem is forming in the area(s) they play in.

 

  1. CI/MI Professionals Taking on More Responsibilities

This is the one that most CI/MI professionals have figuratively, if not literally, tattooed on themselves. CI/MI teams are always being asked to provide more resources, answers, assets and support with less time, budget and people. CI/MI professionals must ruthlessly prioritize projects to focus on the greatest areas of impact, lean heavily on third parties for support, and find new ways to activate competitive and market intelligence via self-service, often enabled by technology. In many cases, CI/MI is becoming the full or partial responsibility of business unit or other resources such as product managers, marketers, strategy leaders, and sales enablement, strategy and operations teams.

  1. Staying the Course

Most CI/MI teams are staying the course for 2023 in terms of their team size, structure and deliverables, despite tech sector and macroeconomic headwinds. If anything, as we said above, they are being asked to do more with the same — or less — resources. For many, CI/MI has become an established mechanism that supports deal pursuits and development of products and services. Making major functional or strategic changes to CI/MI would require eliminating the systems that have been developed to support deal win rates and the other key KPIs that are attributable to CI/MI outcomes.

 

  1. Core Deliverables Matter

We have not seen much change in how competitive intelligence is being translated into core deliverables. Competitive battlecards, profiles, benchmarks and newsletters remain common tools to deliver intelligence. Where dividing lines exist is around CI/MI maturity. We find that many less mature organizations are more reactive, request-driven and ad hoc in their approach to deliverables, whereas established programs at larger companies have created embedded programmatic CI/Mi deliverables.

 

  1. Live where stakeholders live

Just as core deliverables have not changed much for CI/MI leaders, neither have the methods in which stakeholders seek to consume intelligence. This is suggested by the deliverables themselves. Email remains the most popular way in which to get competitive updates, and newsletters continue to be a popular deliverable for CI/MI teams. The big lesson for CI/MI teams is to take a stakeholder-led approach. Understand what they want and where they want it, and create resources that support that.

 

  1. Specialization Everywhere

We believe specialization is going to define the future of CI/MI for practitioners at technology companies and the research firms, agencies, and other types of service providers that support them. In this research, we found no material changes happening in how companies are using third-party research vendors. CI/MI programs still rely heavily on analysts and other providers to augment their internal staff. However, sophisticated programs increasingly demand specialization around the market areas, customer segments, topics and/or services they care most about. As technology tools elevate the baseline of CI/MI, those organizations and providers that can provide specialization via access to nonpublic, direct-from-market data and insights will stand to win.

 

  1. Small Teams

Even at the largest global technology organizations, CI/MI teams are typically fewer than 10 FTEs, and often fewer than five. In our surveys, we did not see any indications that companies plan to substantively grow or shrink their teams in 2023. This is why establishing specialized partnerships with research providers and analyst firms is so important; they are a lifeline for time-and-resource-strapped internal teams. This trend also underpins the importance of building a culture of self-service and all-hands-on-deck CI/MI.

 

  1. Empowering Self-service

Self-service is the foundation of all small CI/MI programs and increasingly a priority for larger teams at bigger vendors. Through CI platforms like Crayon and Klue, solo CI/MI professionals can establish a baseline program and deliverable assets and activate through self-service, freeing up their time to respond to ad hoc field requests versus build standard deliverables. At larger organizations, the trend is to move in a similar direction where possible. A key challenge we have heard from CI/MI teams is how to design (and reinforce) systems to make sure that stakeholders know exactly where and how to collect the self-service resources they require.

 

  1. Manage Centrally; Empower Everyone

The best CI/MI programs at organizations of all sizes focus on building a CI/MI  sharing culture. Having the full support of an organization collecting and disseminating intelligence and insights can greatly amplify the resources of the core team. We have seen great examples of how companies are using Slack, lunch-and-learn meetings, and other similar vehicles to promote CI/MI wins outside of the centralized CI/MI organization. There is a catch, however: This type of strategy does not eliminate the need for a centralized and dedicated CI/MI team. A central team is necessary to quarterback the process, provide a baseline program of assets and resources, and be available for ad hoc requests and questions.

 

  1. Technology Enables but Does Not Replace

The emergence of CI platforms is probably the biggest technology disruption in CI/MI, but there are others on the horizon. Just as tools are being built for marketers that leverage OpenAI’s ChatGPT and other functionalities, a new crop of AI tools will emerge for CI/MI use cases. For example, in 2022 a new startup named 1up emerged, billing itself as “the competitive AI.” Others will follow suit. While these types of tools will automate how publicly available intelligence can be gathered and distributed, they are unlikely to replace intelligence methods such as win/loss interviews or unseat industry and/or sector specialized analysts with nonpublic data and insights. These tools promise to enable CI/MI through efficiencies but will not replace CI/MI roles and services providers. Rather, they will create more demand for unique, differentiated and specialized intelligence.

Challenges Facing Telecom Infrastructure Services Vendors

The telecom infrastructure services (TIS) industry is a $35 billion market that is expected to evolve and expand rapidly in the next 10 years. Government funding is driving network expansion projects by major telcos such as Verizon, AT&T and T-Mobile (as well as their international counterparts), and a whole ecosystem of large, established and interrelated vendors are jockeying for positions on deals.
 
That dynamic is making competition more challenging than ever. Labor shortages, wage inflation, workforce aging and other trends are pressuring vendors’ ability to stay above water, much less compete with peers.
 

Download Optimizing for Telecom Network Deployment Services in 2023 & Beyond White Paper



 

Challenges Facing Telecom Infrastructure Services (TIS) Vendors

TBR has engaged with hundreds of vendors that provide services related to TIS and with operators and hyperscalers that buy from those vendors. When briefing these companies on our research and sharing our perspectives on the market, we often find ourselves in discussions about their challenges. While the specific challenges differ by vendor, geography and/or TIS service line, TBR consistently hears about four major pain points that are broadly impacting most providers of telecom infrastructure services:

 

  • Wage and benefits inflation: The U.S. Social Security Cost of Living Adjustment for 2022 was 8.7%, and 2022 concluded with a 6.5% annual inflation rate as measured by the U.S. Consumer Price Index. Low unemployment for TIS-related labor, coupled with an expected increase in the demand for labor, points to a need for wage increases to attract workers. General expenses beyond wages are rising for telecommunications vendors as well. They must grapple with this trend by passing along those higher costs to customers.
  • Worker and subcontractor shortages: The U.S. Government Accountability Office (GAO) published a report in December 2022 entitled, “Telecommunications Workforce: Additional Workers Will Be Needed to Deploy Broadband, but Concerns Exist About Availability.” The GAO studied Bureau of Labor Statistics data and conducted interviews across the industry to forecast the state of telecommunications labor for a 10-year period. The analysis concluded that the U.S. government, at its peak in 2023, would support 23,000 workers, but that conditions are ripe for a potential labor shortage due to lower-than-national-average unemployment for telecommunications infrastructure services professions. Qualitative factors such as an aging workforce, training requirements and industry competition for this category of labor are also pressuring resource availability. As a result, vendors must figure out how to source their own full-time employees to support build-outs, as well as determine the optimal manner in which to use third-party subcontractor services to augment their own resources and pursue available work.
  • Navigating government incentives and stimulus: The GAO analyzed eight programs that fund the deployment of fixed and mobile telecommunications infrastructure. These programs are not an exhaustive list but represent the largest available to support this type of build-out activity. Of these eight programs, the National Telecommunications and Information Administration’s Broadband Equity, Access and Deployment program is the biggest, providing a total of approximately $42 billion for broadband build-outs in underserved and unserved areas across the U.S. Collectively, the eight programs provide over $75 billion in total available funding. Operators must navigate this environment to capture funding, and vendors in turn must position themselves effectively to win related opportunities that operators generate from this funding.
  • Ability to differentiate: The available funding to support telecom network deployments is increasing the level of competition among the vendors that provide services to operators in support of these deployments. As noted above, competition for talent is intensifying rapidly, and it is becoming more difficult for vendors to compete on price. In many TIS segments, avenues for differentiation are also inherently narrow, and there is a tendency for many vendors and services to look the same. As many services are heavily based on labor, vendors must compete on talent to win. Talent defines key vectors of competitiveness such as delivery efficiency (time and resources required) and delivery quality. Increasingly, however, this is not enough and, at times, is not a sustainable path to differentiation. Vendors must differentiate in areas such as delivery tools, automation, process rigor, reporting, commercial terms, partnerships and other related factors to optimize delivery efficiency, provide cost-effective bids and stand out in a crowd of RFPs.

Overcoming TIS Market Challenges to Pursue the Growth Opportunity

Taken together, these four difficult challenges can quickly become a heavy burden for telecom infrastructure services vendors. Overcoming a vast industrywide labor shortage while also managing rapidly expanding costs is no small feat. It is difficult to find time, particularly as a Tier 2 or smaller services supplier, to work strategically rather than simply putting out fires. Lastly, there is a competitive dynamic: The top 10 suppliers make up approximately 65% of the TIS market by revenue, according to TBR’s Telecom Infrastructure Services Global Market Forecast.

 

How can companies begin to address these difficult challenges? TBR believes this process starts with research. Addressing each of these problems both separately and collectively with a rigorous quantitative and qualitative research approach will help build a winning TIS market strategy rooted in competitive and customer insights.

 

For more information on the TIS industry outlook for 2023 and how to optimize your strategy for telecom network deployment services opportunities, download your free copy of our latest white paper.

Where to Start with an Alliance Partnership

An alliance partnership is a strategic agreement between two or more organizations that agree to work together through shared resources, expertise or market access. Terms of the agreement will vary depending on what each partner brings to the table. In almost every case, an alliance partnership is established to gain a competitive advantage in a particular market or industry.

But Were Do You Start with Alliance Partnerships?

Alliance partner prospecting will start with requests from the stakeholders for more information about a specific vendor — a request, basically to understand, Who are those guys?

 

The reasons for those requests will be as broad and as varied as the stakeholders you serve:

  • Sales might ask based on customers speaking highly of the vendor and stating that interoperability with the technology will be table stakes for a potential opportunity. Conversely, a customer might cite the lack of connection to that vendor as the reason for not awarding the contract.
  • Technologists might ask based on curiosity about the value proposition and how it might fit with your own firm’s offerings to accelerate internal product development efforts, or allow them to cut development efforts through the alliance.
  • Strategists might ask based on senior executive or board curiosity about the prospects of an alliance or a potential acquisition.

Capturing the Basics When Creating an Alliance Partnership

Profiling a potential alliance partner starts with the basics of what, to whom and how?

  • What does the company provide in terms of products and services?
  • To whom does the company sell its products and services?
  • How does the company go to market and provide support?

In most scenarios, your stakeholders will know pieces of this information as they request more details from you. Aggregating these facts and augmenting them with additional information will be the formulation of your company’s internal knowledge base. Other critical elements to curate include basics about the company entity such as the year established, annual revenue (or main investors if a young firm) and key employees.

 

Knowing the key employees in a smaller firm can often provide insight into how the firm will operate. Did many of the key personnel work together at a prior firm? What do you know about the firm? Does this company have any operating characteristics that are similar to the prior, better known company (if so, what?).

 

Larger firms obviously have more nuance. If you are trying to determine how to approach them, it likely will be the remit of a specific business entity within the firm that you will want to engage. Profiling from that vantage point likely requires more digging to determine the proper business unit to contact.

Watch Now: How to Use Objective Data Metrics to Benchmark Alliance Performance

 

But What’s in it for your Target Partner?

Your stakeholders likely have a good understanding of what’s in it for your company. The key is also to determine what can be in it for the target company to entertain partnering with you. The target company’s website will likely have a general flyover of different partner designations. These should be studied intently, especially for larger firms.

 

Once slotted into larger firms’ partner programs, it is often difficult to interact with other parts of the organization. This is an emerging disconnect in business alliances during a time of great industry disruption and has to be addressed cautiously.

 

Many alliance professionals broadly organize partnerships into three categories:

  • Sell to directs the transaction to the partner, which may, in turn, “private label” your products in a way that could limit end-customer awareness of your company involvement.
  • Sell through aligns with classic reseller dynamics where your firm’s involvement with the end customers could be limited, but customers will have awareness of your brand.
  • Sell with has very broad connotations of a true partnership arrangement. These arrangements are often highly customizable in terms of the joint employee interactions, responsibilities and compensation metrics. Smaller firms have to take great care when launching these relationships.

Conclusion

In this blog we look at the basics of creating alliance partnerships and how to prospect potential partners. We suggest profiling a potential partner by aggregating basic information about the company, its products and services, and its key employees. Additionally, is essential to understand what can be in it for your target partner, which should be studied intently, especially for larger firms.

 

If you’re struggling to start the alliance partner prospecting process or have questions about a potential partner, TBR can help! Contact us today to discuss how our research can support your team!

Technology Alliances Are Evolving

TBR has been evaluating the changing nature of technology alliances through its subscription and commissioned research for decades. A series of best practices have emerged, most often developed by young technology companies, while the commercial impediments seem more acute for legacy vendors with their employees’ resistance to change. The balance of this document will discuss the successful approaches vendors have shared with TBR, and what end customers and small technology companies have shared with us as the anachronisms associated with legacy partner program structures.

Why the urgency in alliance program evolutions?

The ICT market landscape has undergone a massive transformation since the advent of more customer-friendly cloud subscription and consumption models. Traditional enterprise application software incumbents like Oracle, Microsoft and SAP were the first entities forced to transition their business models to thwart cloud natives like Salesforce from poaching their existing install base.

 

But the disruption to the enterprise application space was only the beginning, as customer preference for subscription-based pricing soon bled across the IT stack, upending the traditional on-premises data center market at an ever-increasing rate. Specifically, as client trust in the security, uptime and resiliency of cloud infrastructure alternatives strengthened, buyers facing on-premises hardware refresh cycles increasingly sought to migrate their workloads to public and private cloud environments instead.

 

The outbreak of COVID-19 in 2020 forced large portions of the global economy to operate remotely and resulted in a substantial acceleration of clients’ IT modernization efforts. This dynamic helped jump-start cloud adoption among laggard businesses, as challenges ranging from scrutiny over the security of public cloud environments to internal change management issues delaying executive buy-in on projects were superseded by the need to sustain the business continuity of a remote workforce.

 

This background was not intended to provide a history lesson on a now-well-understood ICT evolution but rather to offer some context to better understand how partner ecosystem models must now similarly evolve to support the aspirations of a rapidly maturing enterprise customer base.

 

The benefits customers receive from cloud, such as continuous updates to deployed solutions and greater flexibility in the vendors they procure solutions from, must be built into the design of vendors’ partner programs, as the programs of old, which were built to support vendor-to-partner engagement models, will hamstring vendors’ cloud market development efforts. The evolving ecosystem strategies of Microsoft and Salesforce reflect this shift.

 

TBR has been evaluating the changing nature of technology alliances through its subscription and commissioned research for decades. A series of best practices have emerged, most often developed by young technology companies, while the commercial impediments seem more acute for legacy vendors with their employees’ resistance to change. The balance of this document will discuss the successful approaches vendors have shared with TBR, and what end customers and small technology companies have shared with us as the anachronisms associated with legacy partner program structures.

But first, the TBR analytical framework

TBR has developed an analytical framework to examine ecosystem value propositions. This framework evaluates alliances across three core elements:

  1. The Ecosystem Value Chain assesses the different components of a solution stack, and we list end users given they inform the technology community of what they seek. User-driven solutions are a significant departure from the way selling was done in the past, and this selling shift is currently a big challenge legacy technology vendors face.
  2. Industry elements are a critical solution delineator. Industries can have specific requirements, especially around compliance. Additionally, large vendors will evaluate smaller partners against this layer for IP that provides them with market distinction in that segment.
  3. Business Value Chain is where a lot of the challenges reside. Often, these different components have been evaluated from the vantage point of the large vendor that sponsors and promotes the partnerships. These aspects have historically been fashioned in a way to easily accommodate the operational idiosyncrasies of the sponsoring vendor.

 

The ecosystem and industry aspects refer largely to the assembly of the technology and talent and are not where the challenges lie in alliance partnerships. Talent is not limited to technical talent, either. Having talent that understands the buyer’s business is, at times, more important than the technology itself.

 

The technology evolutions are placing incredible amounts of pressure on legacy business value chains. Industry shorthand has discussed this as the consumerization of IT for years. Whatever you call it, technology is not the challenges buyers see. Hybrid infrastructure is past the proof-of-concept phase for enterprise buyers. Buyers just want assurance the tech stack works, is secure, in regulatory compliance, and has addressed the fundamental business objectives.

 

As such, buyers have precious little patience for challenges in how they seek to consume technology and technology services, and this is a major competitive attack point cloud-native vendors can wield against legacy vendors.

Commercial terms of yesteryear are not aligned to flexible buyer consumptions patterns

Commercial terms and definitions have been the domain of large technology vendors. Large technology vendors dictated the terms to other vendors and, in large part, to end customers. This hub-spoke relationship style allowed big vendors to dictate the terms to distributors, VARs, ISVs and OEMs. Legal wrote the terms to protect the big vendor, and the small vendors had little room for negotiation.

Strategic alliances have been (and continue to be) negotiated agreements between two large firms seeing mutual benefit. The large vendors did not necessarily follow the standardized agreements pushed to small vendors.

 

But today’s IT buying patterns require the integration of technology assets and services from multiple vendors. Enterprise software may have to run on premises and in the cloud, requiring agreements with major cloud providers, the system integrator providing advisory services to the end customer, and the infrastructure supplier for the on-premises infrastructure equipment. Where complexity arises now is with the increase of niche application software vendors that end customers want integrated into their solutions. Interoperability integral to consumerizing IT reduces barriers to entry to these unique IP services that many more large enterprises want to consume.

 

Small vendors in the past were slotted into those big vendor commercial constructs. Today, however, these smaller vendors, particularly if they serve a very narrow niche, can be called on for services, for development work, or just for the niche software based on system integrator evaluation and standardization around that application.

Large vendor resistance to change is increasingly a competitive liability

Cloud-native companies are known for simpler commercial terms. From interviews with cloud-native executives, TBR has heard a very consistent story: The cloud native rallying cry is merely a percentage of net revenue (PNR). Cloud-native application vendors do not necessarily care which vendor is prime to the customer as long as the PNR quotient is transferred to them. As many cloud vendors will state, all they care about is “spinning the meter.”

 

On the other side of this situation is cloud-native executives’ frustration around engaging with traditional enterprise application vendors. The litany of challenges shared with TBR in these discussions cut across most of the business operations, with technology release cycles and commercial terms as the most pressing concerns.

  • Does the traditional enterprise application vendor have one version of its code in the market?
  • What are the commercial terms?
  • Enterprise application vendors can prohibit smaller vendors from selling directly into named accounts. In some scenarios, it could be the niche application vendor that has gained the account attention with a solution for a unique business workflow.

 

In discussions with TBR, executives’ reasons for the resistance to change relate not to customers but rather to the internal change management and the lack of appetite for effecting that change.

  • Executive compensation metrics are often tied to these siloed business performance metrics. Determining how to change the commercial engagement model for multiparty flexibility means tweaking some of the most emotional aspects managers have to consider: the impact on their compensation and their team’s compensation.
  • Internal software development in these traditional firms has been migrating to faster release cycles. Some of the teams may be further behind on the transformation, triggering resistance to the notion of synchronized IP versions across their various channels and end markets.
  • Few line managers want to confront the retirement of legal debt. The idea of convincing general counsel to scrap legacy contract terms and embrace a simplification of those terms can get “what if’d” to death.

Large system integrators have been coming to the rescue

TBR has seen a notable shift in system integrator messaging. Vendor agnosticism is less compelling as buyers have become more interested in just knowing something will work as promised. As such, large system integrators have taken to providing recommendations on different IP elements. To TBR, this is the 21st century equivalent of the successful 20th century market messaging of “Intel Inside.” Tagging a solution as “SI certified” assures the end customer that the IP will work as specified and provides a highly valued technology brand to hold accountable in the event it does not.

 

From an administrative perspective, many system integrators take on the role of orchestrator. These SIs, especially the Big Four (Deloitte, EY, KPMG and PwC), understand the regulatory landscape and can keep workflows current while also handling the commercial interactions between hyperscalers, enterprise application vendors, infrastructure suppliers and maintenance providers. In essence, the SIs become the ecosystem administrator given their high-value brand cache with end customers and their detailed familiarity with complex accounting, however unnecessary and unwarranted that complexity might be within the solution assembly itself.

 

Long-term, TBR envisions the use of smart contracts with revenue-sharing metrics. Regardless of which vendor is prime on the agreement, the roles the participants play determine the set percentage of the net revenue shared. This construct is fundamentally different from the cost-plus or margin-stacking agreements that were the de facto standard, 20th century partner agreements. While these contracts can be established and monitored without blockchain, blockchain can greatly simplify the commercial agreements and simultaneously address service-level agreement (SLA) obligations to the end customer from the multiple parties.

 

Examples of these multiparty strategic alliances are legion. Many leading SIs have practices built around legacy software vendors such as SAP and Oracle, and all are building out hyperscaler competencies as ITO opportunities in legacy infrastructure start to wind down. ServiceNow, Salesforce, Workday and Microsoft Dynamics are cloud-native application sets with growing gravity centers in large enterprises.

 

Niche vendors spring up as business formation costs decline. Many provide a unique, narrowly focused service or set of services that are built to easily plug into leading application layers, often through simple API connections. This niche value is often critical to the buyer decision-making process because of its ability to solve an acute business pain point.

 

For now, as ecosystem commercial terms remain siloed, sclerotic and overly bureaucratic, some enterprises turn to their incumbent SI to serve as the overall solution administrator or solution orchestrator. The point, however, is clear: Customers want tech solutions that work; they want simple contract administration; and they are not willing to pay a premium to cover the administrative bloat associated with having their technology partners determine how to allocate their revenue or cover their technical support requirements.

Big vendors need to focus on their legacy middle-office practices

Another emerging theme TBR has encountered in its executive interviews is the concept of performance-based compensation. This construct has been discussed — usually termed outcome-based pricing — for close to a decade.

 

In the beginning, SIs told TBR the biggest resistance to these kinds of arrangements was middle management’s concern about the financial exposure of such agreements. However, as the SIs have established more automated workflows, the concept has come back under the banner of being performance based. Small firms wedded to legacy SaaS models might need to get more creative in aligning their commercial offers with the needs of larger SIs seeking to create market distinctiveness with such commercial innovations.

Small vendors have to consider approaching big vendors as if they seek investors

As TBR found during interviews with leaders of small SaaS vendors, some of their challenges have not shifted in decades and continue to revolve around the time commitment of their staff when seeking to establish and forge a relationship with a firm several hundred times larger. Numerous interviews laid out a consistent blueprint for successful engagement with big vendors that consists of three major elements:

  1. Are you a strategic fit with the large vendor? If yes, then:
  2. How do you approach the large vendor for top-down attention within the firm?
  3. How do you initially engage the large organization for positive, bottom-up, word-of-mouth marketing inside the large vendor?

Assessing strategic fit

  • What is the strategic focus of that large vendor, and does it align with your firm’s aspirations?
    • What is the vendor’s revenue within the space?
    • Is it a strategic growth segment where the vendor will see value in your offer?
    • What is the large vendor’s current sales structure by customer size and by industry segment?
    • How does the big vendor measure partner success and does its view of success align with your measure of partner success?
  • What is the overall working relationship between the large alliance vendor and its smaller participants?
      • General go-to-market motions
        • Deal registration rigor
        • Joint selling
        • Commercial arrangements
        • Marketplace access
      • Technical and sales certification requirements
        • Access to experts for guidance and for ad hoc training
        • Electronic tool sets, documentation and self-paced training
      • Large vendor tech stack
        • Release cycles and release versions across the different partner classifications
        • Underlying infrastructure technology and compatibility to your stack
        • Response times and supportiveness of its technical personnel, especially for DevOps testing

    Top-down attention grabbing

    In almost prospectus fashion, small vendors should highlight known customer overlap and customers that may present an opportunity to the large vendor. This is where knowledge of the large vendor’s strategic focus comes into play. The top-down efforts also have to establish those critical contacts with big vendor decision makers who can provide the small vendor with guidance around navigating the organizational labyrinth to get things done operationally. Every corporation has a style and a preferred way of working. These senior leaders, if they are sold on the value proposition, essentially become the small vendor’s mentor or coach on how best to engage the broader organization.

    Bottom-up or word-of-mouth marketing

    Small vendors have two audiences to convince: development and sales. While selling is the obvious aspiration, the first move is often to understand the DevOps practices deployed by the large firm as well as prove the technical rigor of the application and the distinctiveness of the functional services the IP enables. Just as it is important to forge the executive connections, the development connections help prove value and mitigate technical challenges down the road by knowing who to contact when in need of assistance.

     

    Sales engagement works best when the small vendor can essentially deliver some opportunities to the large vendor on a platter. Call this focusing on low-hanging fruit, but make sure the first opportunities engaging the large seller organization are highly qualified situations for your value proposition. Again, small vendors should outline several overlapping accounts to the large vendor and highlight the opportunity the small vendor can provide to the large vendor within those accounts.

     

    One or two early wins become the internal promotional marketing pieces to prove value to the large vendor sellers. Saying no to certain opportunities helps to establish credibility as much as winning deals.

    Planning and careful rollouts are critical to alliance success

    Time and again in small vendor interviews, TBR heard that without strategic planning and measured rollout of the engagement small firms can dilute their own sales focus. In this way the large alliance can actually impede the small vendor’s progress rather than accelerate it. Commercial terms can hamstring deal progress, but poorly vetted sales opportunities can likewise drain small vendor market momentum.

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Assessing Vendor Partnerships

TBR interviews with leaders of small SaaS vendors have shown a consistent blueprint for successful engagement with big vendors that consists of three major elements: Are you a strategic fit with the large vendor? How do you approach the large vendor for top-down attention within the firm? And how do you initially engage the large organization for positive, bottom-up, word-of-mouth marketing inside the large vendor?

Big Vendors Need to Focus on their Legacy Middle-office Practices

One of the emerging themes TBR has encountered in its executive interviews is the concept of performance-based compensation. This construct has been discussed — usually termed outcome-based pricing — for close to a decade.
 
In the beginning, SIs told TBR the biggest resistance to these kinds of arrangements was middle management’s concern about the financial exposure of such agreements. However, as the SIs have established more automated workflows, the concept has come back under the banner of being performance based. Small firms wedded to legacy SaaS models might need to get more creative in aligning their commercial offers with the needs of larger SIs seeking to create market distinctiveness with such commercial innovations.
 

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Small Vendors have to Consider Approaching Big Vendors as if They Seek Investors

As TBR found during interviews with leaders of small SaaS vendors, some of their challenges have not shifted in decades and continue to revolve around the time commitment of their staff when seeking to establish and forge a relationship with a firm several hundred times larger.

 

Numerous interviews laid out a consistent blueprint for successful engagement with big vendors that consists of three major elements:

  1. Are you a strategic fit with the large vendor? If yes, then:
  2. How do you approach the large vendor for top-down attention within the firm?
  3. How do you initially engage the large organization for positive, bottom-up, word-of-mouth marketing inside the large vendor?

Assessing the Strategic Fit of a Vendor

  • What is the strategic focus of that large vendor, and does it align with your firm’s aspirations?
    • What is the vendor’s revenue within the space?
    • Is it a strategic growth segment where the vendor will see value in your offer?
    • What is the large vendor’s current sales structure by customer size and by industry segment?
    • How does the big vendor measure partner success and does its view of success align with your measure of partner success?
  • What is the overall working relationship between the large alliance vendor and its smaller participants?
      • General go-to-market motions
        • Deal registration rigor
        • Joint selling
        • Commercial arrangements
        • Marketplace access
      • Technical and sales certification requirements
        • Access to experts for guidance and for ad hoc training
        • Electronic tool sets, documentation and self-paced training
      • Large vendor tech stack
        • Release cycles and release versions across the different partner classifications
        • Underlying infrastructure technology and compatibility to your stack
        • Response times and supportiveness of its technical personnel, especially for DevOps testing

    Top-down Attention Grabbing

    In almost prospectus fashion, small vendors should highlight known customer overlap and customers that may present an opportunity to the large vendor. This is where knowledge of the large vendor’s strategic focus comes into play. The top-down efforts also have to establish those critical contacts with big vendor decision makers who can provide the small vendor with guidance around navigating the organizational labyrinth to get things done operationally. Every corporation has a style and a preferred way of working. These senior leaders, if they are sold on the value proposition, essentially become the small vendor’s mentor or coach on how best to engage the broader organization.

    Bottom-up or Word-of-mouth Mrketing

    Small vendors have two audiences to convince: development and sales. While selling is the obvious aspiration, the first move is often to understand the DevOps practices deployed by the large firm as well as prove the technical rigor of the application and the distinctiveness of the functional services the IP enables. Just as it is important to forge the executive connections, the development connections help prove value and mitigate technical challenges down the road by knowing who to contact when in need of assistance.

     

    Sales engagement works best when the small vendor can essentially deliver some opportunities to the large vendor on a platter. Call this focusing on low-hanging fruit, but make sure the first opportunities engaging the large seller organization are highly qualified situations for your value proposition. Again, small vendors should outline several overlapping accounts to the large vendor and highlight the opportunity the small vendor can provide to the large vendor within those accounts.

     

    One or two early wins become the internal promotional marketing pieces to prove value to the large vendor sellers. Saying no to certain opportunities helps to establish credibility as much as winning deals.

    Planning and Careful Rollouts Are Critical to Alliance Success

    Time and again in small vendor interviews, TBR heard that without strategic planning and measured rollout of the engagement small firms can dilute their own sales focus. In this way the large alliance can actually impede the small vendor’s progress rather than accelerate it. Commercial terms can hamstring deal progress, but poorly vetted sales opportunities can likewise drain small vendor market momentum.

 

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