By Kurt Milne, Managing Partner, PartnerAlliances LLC
Managing technology alliances is hard work. If we look back at the collective track record of alliance efforts at technology companies, we find that the majority don’t achieve the desired results that justify the investment. IN a partnership, there are multiple agendas that must be addressed which multiplies the risk and uncertainty of success.
Yet technology companies continue to allocate scarce resources to manage alliance activities. Why go through the effort to initiate and manage relationships that have a low probability of success, yet have a very real cost? “Because we have to” is the simple answer.
The bottom line is that technology companies need partners to get products and services to market. Customers demand integrated solutions. Technologies must be proven to work in the solution stack. Single solution firms lack the market reach of their larger organizations. Speed to market can be enhanced by working with other firms. And, most technology company acquisitions are previously proven as an alliance effort.
We have a greater chance of achieving success if we clearly understand and communicate the objective of our efforts. There are a few basic strategies that justify our efforts to reach out and make agreements with other companies.
Accelerate R&D
The partner option adds a new twist to the classic build versus buy decision. Partnering to accelerate the addition of a component or technology is a valid strategy used to accelerate product development efforts. Agreements should include access to the partner’s product expertise and support resources as needed to enable a whole customer facing solution.
Supplement Growth
Partnering is a valid approach to accelerating both revenue and profit growth. There are a wide range of potential mechanisms to increase top and bottom line growth from increased lead flow, to cross-selling into partners’ existing customers, to lower component costs.
Enter New Markets
Partners can help technology companies enter new markets. Limited geographical reach is one hurdle that can be overcome through an effective partner strategy. Applying a proven technology to a new application or solution area is another strategy that is enabled by effective use of partners.
Eliminate competitive threat
The speed and agility are key competitive weapons for technology companies. Sometimes, a competitor gets a solution to market first. One effective response is to get the same capability through an alliance relationship. A better response is to leapfrog the competitor and partner to deliver a solution that renders the competitor’s new offering obsolete.
Extend Sales Reach
Many technology reach natural levels of sales efficiency of scale that make it hard to grow without significant field resource investment. Properly structured partnerships can put more “feet on the street” and extend the reach of go-to-market activities for existing solutions that are not feasible through organic growth.
If we have complex agendas that make it hard to unpack the logic of the relationship, we are likely to fail to go beyond the press release stage. If we are clear on why we are partnering with other firms, we have a greater chance of planning and communicating our objectives is a way that enhances the expected return on alliance investments.
About PartnerAlliances
PartnerAlliances is a Silicon Valley based business development and alliance management service provider. We bring the necessary competencies, tools, resources, and contacts that enable our clients to develop and execute successful alliance strategies faster and more efficiently.
We offer a broad range of expertise and services in the areas of strategic alliance development, technology transfer, and partner enablement that can be utilized for a single project or delivered on an ongoing retainer basis.
Let us know about your current alliance projects, and we can quickly assess the strategic value of our offerings. info@partneralliances.com
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