While TBR research and services are often used for competitive intelligence and market intelligence, an equally active and fast-growing use case for our research is ecosystem intelligence — understanding the performance and strategies of current and/or prospective partners.
One partnership area where this is particularly true is among global systems integrator (GSI) alliances. GSIs are a critical centrifuge in enterprises’ ongoing digitization and technology optimization efforts, providing the industry-centric business outcomes layer for those programs. Large and established software, cloud and infrastructure players are aiming to build and scale their existing GSI partnerships to create competitive advantage at those accounts, while growth-stage technology companies are aiming to build GSI awareness and forge initial relationships in their efforts to scale up to serve enterprises.
The Global Systems Integrator (GSI) Alliance Journey
TBR views the path to a successful GSI alliance program as a five-step process, with many small steps, tasks and requirements associated with each step. Technology vendors may be anywhere in this journey, depending on the maturity of their GSI alliance program, if they have one. It should be noted that this is our perspective, based on the support we have given companies along this journey with our research and advisory services. We have drawn elements of this framework from ASAP’s Alliance Life Cycle framework to make it specific to ISV-GSI partnerships.
Step 1: Determine GSI Alliance Goals
It is imperative to be prepared before taking any tactical steps to approach a GSI about a potential relationship. GSIs are complex organizations, and there are many parties vying for their attention. They are steadfastly focused on driving business outcomes for themselves and their customers.
Technology vendors first must get clear on their internal goals for partnering with GSIs. Specifically, they should focus on how and where business opportunities can be driven with GSIs, and what the required investment and risk are from the GSI side. Basically, technology vendors should paint a realistic picture of expected business outcomes from their GSI programs, which will not only help them get aligned internally but also reflect those goals in a hardened business case for GSIs. Because that is what GSIs will care about — what is in it for them.
Alliance goals, as noted above, must be rooted in a firm’s ability to execute on partnerships. At this stage (and then going forward), partnership capabilities should be audited to ensure technology vendors are ready to successfully onboard, manage and grow GSI alliance relationships.
Step 2: Build Ecosystem Mindshare
Once there is a clear set of goals, it is time to get started. It is tempting to want to jump right in and start engaging with GSIs and pursuing deals. It can, at times, be beneficial to start that process alongside this step. But that should not replace efforts to build ecosystem mindshare.
For smaller technology vendors, there are a lot of barriers to establishing a relationship with a GSI. There is a lot of noise in product categories; for example, the marketing technology category, according to notable tech blog chiefmartec, has almost 10,000 providers. GSIs usually have invested significant time, resources and energy into building practices around specific partner solutions (e.g., SAP, Microsoft, Oracle). Unseating established relationships swimming in the same streams can be a challenge, as GSIs have already de-risked their relationships with established technology partners. GSIs are also fragmented and matrixed, making it difficult to determine the right doors to open and what messages to deliver to whom.
For all those reasons, we think a great place to start for ISVs exploring GSI alliances is by building mindshare in the ecosystem. What does that mean, exactly? Getting a name and alliance-specific value proposition and business case out there to an audience of GSIs, with the goal of raising awareness. Think of this effort in the same way a business would about a sales and marketing funnel.
This is a top-of-funnel effort to build awareness in the addressable GSI market. Build targets in the same way a business would for direct customer sales — establish specific named account targets and go broader than GSIs to regional systems integrators (RSIs) or smaller boutique systems integrators if that is what the strategy calls for. Consider the entirety of the ecosystem too — even if the end goal is to build relationships with the GSIs, building credibility with their current technology partners could be another angle through which to gain access to targeted GSIs.
There are several ways to tactically go about building ecosystems mindshare:
- Determine a clear owner(s) for alliances and establish clear KPIs for that person(s) around building ecosystems awareness.
- Ensure GSIs and other partnership programs and key partnerships have a dedicated webpage.
- Create and distribute original content (e.g., white papers, webinars, guides, case studies) that outlines the value of the GSI program.
- Network with key personas in the target GSI ecosystem by participating at events, hosting events or becoming a member of a professional association such as ASAP.
- Sponsor a third party, such as an analyst firm, that has an owned audience with the GSIs to create content, or host an event or workshop that brings the company’s GSI partnership value message to the audience (this is often where TBR supports ISVs).
Step 3: Establish a Strategy
As you are building awareness as a viable option in the GSI product arsenal in your area(s) of product focus, start thinking about formalizing the GSI strategy.
There are two big challenges that we find companies grapple with when they reach this stage: (1) determining what the GSI program specifics will be and (2) determining the right GSIs to partner with.
The first part of that equation requires answering the question “What is in it for the GSIs?” This starts with the business case value proposition associated with the deal flow and the revenue that can be brought to the partner. But it also extends into the full set of relationship benefits and incentives such as co-selling and co-marketing assets and enablement, technical training, discounts (if there is a resale model), investment in jointly created IP assets, accelerators, and/or services, resource certifications and partnership management such as dedicated alliance managers.
Often at this stage, we find that companies seek out benchmarks and competitive research to understand how their direct peers and proxies are building partnership programs. A great start is an evaluation of the stated partnership benefits and requirements on direct and aspirational peers’ websites. We find it is valuable to go deeper through interview conversations to understand what works and what does not about peers’ partner programs. Client partners and other leaders at GSIs can typically compare multiple technology partners within a given domain, providing guidance that is invaluable in building or refining a company’s partner program.
With a vetted partner program in place, the next step is choosing the right subset of GSIs to target for relationship development. Businesses want to focus on the partners that offer the most mutual benefit. This is where we get lots of questions from executives leading the GSI programs of technology companies; they want to know who the top 10 GSIs for HCM software are in North America and why, or which two or three of the best GSIs for project management software in the telecom vertical have the biggest revenue and headcount.
These types of questions beget a structured, data-driven research approach to partnership prioritization that we call a partnership scan. A scan basically involves establishing a set of criteria that determine a best-fit partnership and then evaluating the full universe of potential partners against those criteria, using secondary and primary research methods (with the help of a research partner like TBR, if and where necessary). Scoring is established for each criterion (we use a weighted average model and assign different weights to each criterion) and used to identify a short list of ideal candidates (usually between five and 10). Each of the short-listed candidates is then profiled in depth, creating a battle card of sorts that can be used to pursue each relationship. This type of analysis can then be repeated and adapted over time as the criteria that define ideal GSI partnerships evolve.
Businesses will have to define their own scan criteria, but in our engagements, here are a few that are almost always included:
- Partner revenue (overall and/or by business line, geography, vertical, customer type and/or other segmentation that is relevant)
- Revenue growth
- Headcount by level/role in the relevant segment(s)
- Certifications and skills of staff in the relevant segment(s)
- Number of clients in the relevant segment(s)
- Breakdown of current clients by relationship length, client size/type
- Current IP assets
- Services portfolio breadth and depth
- Current partnership relationships in the relevant segment(s)
- Recent acquisitions or large-scale investments in the relevant segment(s)
- Leadership experience and tenure in the relevant segment(s)
Step 4: Get in the Door with Proofs of Concept (POCs)
In a series of LinkedIn posts such as this one, Subhashish Acharya, Centric Software’s director of Strategic Alliance & Ecosystems: Enterprise Digital Transformation, draws out a tactical playbook for how to build a go-to-market model as an ISV aspiring to work with GSIs. This type of tactical business development matchmaking is outside the usual scope of how we support ISVs and GSIs, so for this particular section, we will rely on these posts and others to support our recommendations. In his posts, Acharya advocates for a stepwise approach to building a relationship with a given GSI that can be summarized by the following steps:
- Understanding how GSIs operate and how they are structured
- Navigating a specific GSI organizational structure to target the right people with the right messages
- Identifying and building deals that can be brought to GSIs, versus expecting GSIs to sell the business’s product
- Targeting the GSI client partner with a business value and outcome-focused message for a given deal
All these points are important, but we think No. 3 is particularly valuable advice. There is a tendency to think that if a business can only get into a relationship with a GSI, opportunities will come knocking. This might be more true for other types of indirect channels that are focused on high-volume product sales, but with GSIs, the primary orientation is delivering a valuable solution for the customer, not selling the business’s product. One of the best ways to build rapport with GSIs is to bring baked, vetted, business-case-supported deals to specific client partners. Acharya outlines this in further detail in one of his posts:
“SI Client Partners are very careful and plan meticulously before jumping in with you on a product Biz Dev Cycle, which is either not mature enough, not budgeted adequately and not approved yet by the customer. As a product alliance/sales rep, if the Client Partner is not being attentive to you, check the maturity of your sale first. The Client Partner is not responsible in selling your software, really. The Client Partner is responsible in selling a total solution/value, and you are a part of it.”
When getting started with any given GSI relationship, take this advice to heart. Build assets and playbooks that focus on business value, and bring value to the GSI with vetted deals to get noticed, build constituency and expand trust. This is exactly what Deloitte recommends in the playbook we shared above; it aims to form “teaming arrangements” with companies for specific deals before expanding those arrangements into partnerships.
Step 5: Optimize to Win
Once a GSI strategy is in place and being executed on through successful POCs, it is time to scale. At this stage, we find that a lot of technology vendors run into the problem of: “if you cannot measure it, you cannot manage it.” This applies both internally and externally. If businesses do not have the right internal technology and processes to track partnership performance throughout the sales and delivery life cycle, they lack the critical data and insights that can be used to their advantage.
We find the same often goes for external data. If a technology vendor is engaged with a particular GSI, that vendor does not really know the full picture of the opportunity that GSI presents. There is some level of insight, certainly, based on how the relationship has performed historically, what the GSI says about how the vendor is doing today and what to expect about the future, and what can be extrapolated from the vendor’s pipeline and other resources. But the vendor lacks an objective view of where it stands. Are competitors and/or other industry proxies generating more revenue with that partner? Do they have more joint investment in certified headcount and/or IP assets and solutions? Or is the vendor at the top of the heap?
This is another entry point where TBR is often engaged as a third party to help, be it through our available subscription research or custom research services. Vendors understand that if they can put their GSI relationships in a benchmarking context, they will be able to identify areas of strength and areas where they have gaps versus their peers’ relationships with those GSIs. If they can understand those gaps, they can take action to address the most important and urgent gaps, directly impacting their revenue performance through their GSI partners.
For us, the mechanics of this look a lot like the mechanics of the scan model outlined in Step 3. While Step 5 evaluates the same metrics, it uses a different lens. Instead of looking just at the GSI partner overall, as in Step 3, benchmarking looks at the GSI-ISV intersections that are relevant comparisons to their business. In addition to those core benchmarking metrics, this type of analysis involves speaking to partners to get their qualitative impressions on their different partnership relationships. Having a third party is a benefit here too. Third parties can get objective views of technology partners from GSIs that GSIs will not always offer directly to their technology partners. As with scanning, this type of benchmarking works best if there is commitment to making it a process, not a project. Performance and relationships change over time. If this type of assessment is only run once and then considered finished, the opportunity to build a longitudinal analysis of GSI ecosystem performance and opportunities is lost.
In addition to the types of benchmarking we support, another tool to use for partnership optimization and scale is a scorecard model. A scorecard is a means of assessing a particular alliance relationship, often hand in hand with the partner, on a recurring cadence such as quarterly or annually. ASAP’s comprehensive Alliance Scorecard Model can be used for this purpose.
Establishing and growing a GSI alliance strategy is a journey without a destination. Once you’ve formed an alliance, you need to continually find ways to broaden and deepen the relationship and ensure both sides are achieving their expected outcomes. This is easier said than done; without a data-driven and framework-based approach, it can feel like you’re fumbling in the dark. That’s where competitive and market research can help.
Whether it’s building assets to grow mindshare, identifying best-fit partners, or benchmarking your peers’ relationships to identify gaps to remediate, competitive and market research and competitor and market data will shine a light through that darkness. If you’re struggling with how to get started with using research to define your GSI alliances journey, give us a shout! We’d love to hear more about your challenges and share how similar players are approaching those challenges.