Flashback to May 1996 – Partnership Marketing
Is your company seeking partners to integrate your products into theirs? Or do you want to build in specialized software products from other companies? Consider partnership marketing.
To get readers some lessons in partnership strategies for market development we talked recently with Glenn Sparkes, Canadian Area Manager of SunSoft, the software division of Sun Microsystems. In late 1995, his company chose Ottawa as its new Canadian headquarters. Sparkes reports that ‘ … Ottawa is a great place to headquarter this type of business – many of our major markets are represented here; government, telephone companies and manufacturers, high technology and R&D. As well, there are many “early adopters” right here in Ottawa.’ We agree – for example we have a number of world-class integrators, such as SHL, Kanatek, Opcom, and Digidyne.
Partnership Marketing – Lessons from SunSoft
As background, Sparkes gave a perspective on the SunSoft mission; ‘Our division was spawned by Sun Microsystems four years ago. The SunSoft mission is to achieve volume sales of software, on multiple hardware architectures (SPARC, Intel, PowerPC), into the enterprise. Our products are focused around operating platforms and middleware. There are three themes which run through our entire product line – development, deployment, and management.’
Partner Selection Criteria
Their criteria list for partner selection provides a few good lessons:
1. Market focus – Telephone companies, Finance, Government, Retail, Oil & Gas. – Based on an assessment of current trends, they have chosen market segments with the type of business problems and installed technology that they can grow with.
2. Service capabilities – must have most or all of the following a) customer service, b) technical support, c) training, d) consulting, e) systems integration. – True to the basics of marketing dynamics, they have recognized the need for delivery of a ‘whole solution’ to the client. The partners must be able to give customers confidence that benefits will be achieved.
3. Installed Base – must already have an attractive customer list, with a realistic forecast that a significant portion of the Sun software revenue will come from the installed customer base. – It takes a lot of time and money to build a set of client relationships – the value is recognized by this part of the selection model.
4. Marketing resources – need to see at least one person dedicated to marketing. – Good partners are committed to strategic level demand creation for maintaining a healthy prospecting funnel.
5. Productivity – should be producing at least $200K+ of revenue per employee. – A healthy revenue productivity shows that a partner is getting good leverage from knowledge resources. This kind of partner will be more adaptable as the market changes and as competition grows in some segments.
6. Financial strength – potential partner should have a positive cash flow. – Positive cash flow is a good indicator of strong business management and health.
Each part of the model gives insight into market size and timing. Rate your strength in each element. Then re-do your sales forecast. Have fun! Suggested reading is Crossing the Chasm, by Geoffrey Moore. If you have a financial stake in a technology business, get to your local bookstore!
And that is not all! SunSoft is planning to be very selective about their choice of partners. With this select group, a brand image will be cultivated for the partnership program. The brand image will be backed by a strong investment in training, support, and joint business planning. What a great way to develop and leverage a long term partnership!
This article by Peter Fillmore, was originally published in MARKETECH in May 1996.