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Taking a Horizontal Approach to the Vertical Partnering Challenge of IoT
1. Partnering Guide / July 25th, 2016     A+ | a-
AUTHOR: Jan Twombly and Jeff Shuman

Our previous blog post stated that partnering could be either the connective tissue or the Achilles’ Heel of a company’s efforts to capitalize upon the tremendous opportunities offered by the Internet of Things (IoT)--and all the technologies enabling the digitization of business, the shift to everything as a service (XaaS), and outcomes-based business models. We said that smart companies are rethinking their partnering practices from the customer back – and finding that what they’ve been doing is no longer sufficient for the speed, scale, and scope of partnering today.

At the crux of the issue is that in order to deliver the turnkey solutions customers require, companies need the ability to assemble just the right mix of partners for that customer scenario – and hope that can become a replicable industry use case, relevant for many more customers without tremendous customization. The path for achieving this appears to be a targeted and precise vertical focus.

Indeed, IDC’s recent study1 of IT channel ecosystems and the rapidly growing IoT marketplace highlighted two key observations:

  1. To succeed in IoT, solution providers need to specialize by micro-vertical markets and have specific solutions for individual use cases 
  2. Companies that are succeeding in the IoT market form alliances for each IoT element they need to complete the end-to-end solutions
On the surface these two observations – specialize by vertical market AND partner to provide end-to-end solutions - make sense. But it seems like a company will need a lot of partners – especially given the current fragmentation and immaturity of the IoT marketplace. There will be many different flavors of partnering – some requiring deep and broad collaboration, others much more transactional. There are likely different partners for solution development and go-to-market. Strategic decisions will have to be made about when to lead and when to follow – and the implications that has on partnering models. There will likely be new kinds of partners – particularly to gain vertical expertise and access.
This challenge has partnering leaders going back to the drawing board and rethinking how they organize their partnering efforts. The approach that seems to make the most sense to us is to put in place an overarching partnering methodology (not just a program with features and benefits) that allows the company to effectively partner as needed, in ways that range from essentially self-service to true strategic alliances. The core elements of partnering – aligning value propositions, onboarding, planning, governance, etc. – must be able to be performed throughout the enterprise in a manner that is efficient, effective, value additive, and manages partnering risks, such as IP ownership/protection and shared liabilities. Just as a company has a common way it goes about such core tasks as procurement or finance, it must also take a horizontal approach to how it goes about partnering.
This new partnering capability must have the following characteristics:
  • Baked/embedded into the company’s strategy, infrastructure and operations 
  • An overarching, end-to-end governance process driving accountability, and constantly looking for levers that will accelerate growth
  • Encourage experimentation, providing resources for placing bets to seed future opportunities, and testing new business models
  • Digitized to provide as much self-service by partners as possible and to enable the business units and sales teams to quickly partner as needed, without a lot of complexity 
  • Enable the rapid development of the micro-vertical use cases
  • Drive the ability to execute efficiently and effectively with consistent tools and templates, as well as providing just-in-time snippets of training available on a mobile platform

Success in the IoT partnering is not happenstance - it takes careful design. The ability to execute within the complexity of the IoT ecosystem will be the difference between the winners and losers. The winners will leverage the core principles of partnering, but will rewrite the rules to account for speed, scale, and scope of partnering required for a micro-vertical go-to-market approach. Taking a horizontal approach to how to partner will drive the ability to make that partnering replicable and profitable. 


Be sure to check out our article in the summer 2016 issue of Strategic Alliance Magazine, “Mastering the Speed, Scale, and Scope of Partnering for the Connected Ecosystems of the Fourth Industrial Revolution.”

1 IoT: The Next Big Thing for the Channel,” Pam Miller and Vernon Turner, IDC, June 2016)
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