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Powering strong partnerships for successful digital transformation
César Cernuda, president at NetApp, shares his thoughts about the need for collaboration to support success
Due to the ever-increasing demand for data processing, storage and analytics, the cloud continues to disrupt the software industry rapidly, encouraging companies with traditional on-premise applications to invest in new hybrid and multicloud solutions.
Currently, 60% of corporate data worldwide is stored in the cloud. Also, the percentage of organisations committed to, or interested in, a hybrid cloud strategy has grown from 81% to 93% since 2017, and that figure will only continue to rise.
Although the benefits of a cloud-first strategy are significant, so too is the complexity. Companies that are achieving the highest degree of success in helping their customers with their migrations are doing so through the power of partnerships. In fact, more than 75% of CEOs with businesses in the technology, media and telecom sector rate partnerships as “important” or “critical” to their business, according to PwC.
This shift was accelerated by a need for organisations to digitally transform during the pandemic and cloud-based companies are becoming enterprise data management experts, regardless of their size or knowledge. Many businesses realised that, without the right resources in place at the right time, digital transformation might not be achievable – or would take much longer, and be much more expensive, than originally thought.
Finding a partner that has complementary expertise to achieve a common business goal for customers has multiple benefits. This is especially true for small companies and startups with limited resources.
First, IT systems must work seamlessly with each other to deliver maximum value. Companies that have collaborated on solutions to ensure compatibility and ease of deployment in cloud environments can lift major burdens of complexity off the shoulders of their customers. This is a huge value-add that can drive sales to both new and existing customers.
Another important benefit of establishing partnerships is the ability to join up marketing and sales efforts. If two small companies partner in sales as well as technology, they effectively double their resources. When smaller companies partner with an enterprise-scale company, the benefits to the smaller company in terms of marketing resources can be even greater. In either case, every new partner relationship creates opportunities for new conversations with both prospects and current customers.
When companies partner, they are better equipped to solve specific customer problems, as they can create teams with subject-matter expertise from both companies who also have complementary areas of technical expertise. With this advantage, they can collaborate to solve different aspects of a problem that neither could solve alone and drive innovation in the process. In today’s hybrid, multicloud environments, multi-faceted problems are common and require quick decision-making and a willingness to experiment without fear.
In the case of independent software vendors (ISVs), partnering with a larger enterprise with high brand recognition adds to their credibility in sales situations. Also, ISVs typically have specific domain expertise that would help a large company with a horizontal offering (such as networking, security or the internet of things) provide a solution that addresses the needs of a vertical niche (healthcare, manufacturing, automotive).
Startups and growing companies that establish strong partner relationships with large enterprises (such as cloud providers) often obtain privileged information that gives them a significant time-to-market advantage in areas such as cloud-native products. This can be critical in the early days of establishing market share.
What to look for in a partner
In the technology sector, companies often target potential partners based on their intellectual property, specific technical capabilities and access to new customers. However, there are several other important considerations beyond these basics:
- A partner you can trust: Forming partnerships can involve a great deal of negotiation, and mutual trust is essential for success. Once the partnership is formed, there are bound to be disagreements. Once again, trust is a necessary foundation for resolving issues. This may seem obvious, but the importance of trust cannot be overemphasised.
- Value: Partners should be able to quantify the potential business benefits of a partnership to both parties. Equally important, they should be able to offer customers a clearly understood joint value proposition. In the technology world, this includes both business benefits that impact customers’ bottom line or market share, and technical benefits that appeal to potential customers’ IT departments.
- A deal you can live with: Larger companies with which you might consider partnering will most likely have an established partner programme that spells out responsibilities, financial arrangements, sharing of intellectual property, and so on. Ideally, such programmes should have some degree of flexibility, but the terms should be equitable as stated. Deals between same-sized companies need to be spelt out in detail. This is a process that makes some entrepreneurs impatient, but it is very important for maintaining smooth long-term relationships.
- External factors: It is critical not to overlook regulatory, tax, legal and accounting issues that could ultimately delay a deal or prevent it from happening altogether.
- Coordination and teamwork: Partners should be comfortable with quarterly, if not monthly, executive meetings to ensure that partners are on the same page and understand the details of product roadmaps. Development teams might need to meet more frequently, such as at the beginning of each sprint, in an agile organisation. Sales teams should also confer regularly to share target information and plan joint presentations when appropriate.
- An open innovation ecosystem: Innovation is at the heart of any technology business. The ideal ecosystem consists of trusted relationships that allow deep integrations.
The key takeaway here is that partnerships can improve your bottom line. They give access to complementary intellectual property that can make your market appeal stronger, and they also give you access to a new customer base. For all their benefits, it is not wise to rush into a partnership, but to think carefully first. Due diligence takes time, but it is time well spent.