The Power of Partnerships

It's been a while now that I've been following Bernard Marr and his posts in "Future Tech Trends." The last one struck a chord as it touched upon a vital (yet often underrated) component of business success: partnerships. I'll zoom in on a famous example that shows exactly how powerful they can be.

Microsoft vs Amazon Web Services (AWS)

For years, AWS had the edge over Microsoft when it came to market share in the world's total cloud spend. This recently shifted in favor of the latter. In my view, this can - at least to a large extent - be contributed to a successful partner strategy. I personally worked in several layers of what is sometimes referred to as "the channel." Here is a graphic representation:

Some terminology that clarifies the different categories:

Vendor: in the business of developing software or (cloud) platforms. Examples: Microsoft, AWS, Dropbox, Salesforce, Google, McAfee, ...

Distributor: act as a middleman between vendors and "resellers." In the past, they were the famous "box movers" - in the cloud era, they needed to reinvent themselves with some of them building online marketplaces where professional resellers buy software or manage their customer's licenses. Examples: TD Synnex, Copaco, Arrow, ...

Tier 1 or "T1": large managed service providers who have a direct relationship with the vendor and basically do not need to buy from a distributor. Oftentimes, they have a sizeable market share that warrants this relationship with the vendor. Examples (too many to mention, but in the local market): Software 1, Cronos, Cegeka, CGI, ...

MSP (managed service provider): previously sometimes referred to as "resellers" as they were mainly were in the business of installing hardware and software at "end customers." In time, they also reinvented themselves shifting from "reselling" to offering extra services (cloud backup, support, security audits, ...). Examples: again too many to mention but some in the local market are Realdolmen, 3IT, ESC, ...

End customers: the ones actually using the software (such as "office 365" or dropbox or salesforce, ...). If they are big enough, they can also have a direct relationship with vendors (sometimes referred to as "enterprise agreements").

What I saw working for the cloud team at one of the distributors was that having solid partner programs in place would win the day time and again. AWS realized their error and started paying more attention but not without losing their pole position. Currently, a higher number of vendors are realizing that open ecosystems and creating partnerships actually create more business than the development of "golden cages" (famous example: the Apple ecosystem). Today, it makes sense to find good business partners as you can mutually reinforce each other. There is plenty of business to go around and with specialists helping each other, clients often benefit more than with companies who try to be "a bit of everything."