or provide supplementary services to a software vendor’s technology. They are
ubiquitous across all the technologies
we cover, and in fact tend to generate substantially more revenues than
the vendors themselves. This makes vendors envious, and sometimes their baser
instincts take over.
Consider the case of Web CMS Vendors Ektron
and Sitecore, fierce
competitors in the mid-market who both issued formal praise of their channel
partners earlier this month.
Ektron announced a partner
engineering group and touted
one-hundred consultancies as certified in its latest platform. Sitecore
praised
its "growing network" and then cited
some channel "MVPs."
The timing of those announcements was kind of ironic, since we had just heard
from partners of both companies complaining about the vendors muscling in on
some of their business. Ektron’s lovey-dovey announcements followed on the heels
of a release promoting the
vendor’s own consulting services — so perhaps they were issued
to mollify a restive channel?
There’s a cycle in vendor-partner relationships, and I’ve seen it run full-circle
many times in the last twelve years of analyzing content technologies. The cycle
goes something like this:
- Vendor builds partner channel to increase sales — while recognizing its
incompetence at key collateral services (like graphic design and SEO in the
Web CMS space, for example) - Partner and vendor salespeople engage in an intricate dance with prospective
customers — choreography that typically involves copious beer and horse-trading - During a sales downturn or feared sluggishness (e.g.., now), vendor
increasingly "cannibalizes" channel by promoting its own consulting - Vendor re-discovers to its delight that basic services can be highly profitable,
while deluding themselves that they can scale it horizontally - License sales from the jilted channel predictably start to drop
- Vendor loses some deals and reputation by overcommitting to consulting services
where they don’t excel - Vendor realizes belatedly that margins diminish once they get beyond boutique
architectural services - Vendor hires new channel marketing rep with "fresh commitment"
to building partner channel - Initial resistance arises within vendor consulting team, but the rest of company
finally comes along after multi-month delay - Some jilted partners get back in the game with idealistic new salespeople
- Vendor dips into bottomless well of consulting and integration firms to
recruit new partners - Everyone returns to Step #2
In the case of Ektron and Sitecore, the story will vary from country to country.
It’s the same with a lot of other WCM and ECM vendors: their channel posture
may differ in North America than say, EMEA or Asia-Pac.
As a customer this all might seem like insider talk, but you
need to be aware of the dynamics when starting or renewing a vendor relationship.
As we’ve counseled repeatedly in these pages, "partnerships" can take
many forms. Ultimately, managing your suppliers to best effect remains your
responsibility.
