Software Safari - Premium Blog on Application Software

Tough Questions

              Independence in the Reseller Channel

Interesting article in CRN this week ("Infor Enforces Exclusivity", 9/18/2006, www.crn.com) about how Infor has set a deadline of December 1 for partners to be exclusive to Infor or leave the fold.

Infor, which has acquired a number of firms recently (i.e., MAPICS, Formation, DataStream, Geac, SSA Global, Extensity and Systems Union), certainly has some interesting statistics behind it now. They claim 70,000 business customers and a host of legacy products (e.g., Baan) providing maintenance revenues to the company.

Any of the affected partners may want to examine the following before deciding the exclusivity matter:

• Will a marketplace that continues to consolidate be a space where independence is valued by your customers? Between Infor, Oracle and Microsoft, a substantial number of application software vendors are now part of one of these firms. SAP is still growing and that means that with customers seeking solutions from fewer suppliers, can you really afford to be independent?
• Customers continue to expect deeper levels of product expertise. If you spread your resources over multiple vendors' solutions are you getting too thin to remain market relevant and credible? Can you even support all of the existing solution sets of the big consolidators? Can you also support their re-designed SOA compliant new solutions, too? Discerning customers today want deep, really deep, product expertise and if you can assure them that your entire bench is focused on only one product, that may assuage their concerns.
• Can you make a better living providing conversion services to acquired product customers? Some consolidators may not be able to provide newer solutions in a time frame consistent with customer needs. They'll need a solution other than what the consolidator offers. An independent reseller may have an advantage.
• Competition for mid-market services work is heating up. Big integrators, offshore firms and others are all vying for these software projects. These bigger competitors will surely emphasize the size and depth of their focused practice units when going after this work. How will you compete against this? Being a generalist or a reseller with no specialization is not a viable strategy.

Infor's move may be a good thing for software resellers and implementers as it will doubtlessly provoke new strategy discussions in these firms.  Is your go-to-market strategy in need of a review?

 

Worst Practices in Partnering

                  Partnering Between Service & Software Firms

There has been an explosion of acquisitions in the software industry in recent weeks. The consolidation within the sectors continues.

One the bigger deals that just got announced involved a firm that made a run at me a couple of years ago. What this company wanted was someone to broker a big alliance with large systems integrators with their number one target being my old firm: Accenture. I was intrigued enough to hear what these executives had to say. I met with the CEO and several other execs but eventually I was sitting across from the EVP of Sales. Apparently, I would be reporting to this fellow.

Sales executives have a view of alliances and partners that is no different than how they view many things in this world. They believe that any outcome can be achieved, if and only if, they:

- insist the outcome be delivered

- ignore critical evidence to the contrary

- keep repeating the demand. I'm guessing the more times they hear themselves say it, the more achievable and believable it gets.

- act ever more impatient

- claim that the outcome is totally within control of the person in front of them

- etc.

Well, I told this fellow that there were two big obstacles with setting up Big 4/Systems Integrator alliances. First, many companies still act and are organized as confederations. While you may  get an alliance deal with one partner in one industry in one region or country, you have to hunt down 60 more just like him/her to get a firm-wide deal. It's like playing Whack-a-Mole on a global scale. Second, within these companies there are partners and then there are partners(or executives) that count. For a firm with 1300-3000 partners/executives, how do find the one person who can influence all of the rest of the partners/executives to go along with him or her. Third, these companies are slow. The tectonic plates often move faster than these risk-adverse firms do. You progress according to their timetable not yours. Fourth, big alliances often start off with lots of baby steps until one day, BAM, the whole firm jumps on board. Linear relationships are rare with these firms.

I've given numerous talks, coaching sessions, etc. on this subject and I can speak with authority on this matter as I was the initiator, gate-keeper, advocate, deal killer, etc. of these for Accenture for almost a decade.

Back to this EVP of Sales, he grunted when I explained how things would likely play out and what the most likely timetable for success would be like. He then concluded that I "obviously didn't believe in their product line" and assumed I couldn't or wouldn't do the job. Realizing that logic, reasoning and other critical brain functions may not be part of this guy's DNA, I decided to offer him one further piece of advice. I told him that if he does interview a candidate who is willing to commit to his terms (i.e., $400K in sales revenues via Accenture joint deals every quarter starting with the first quarter), then this person is not qualified for the job. If they really understood what was being asked of them, they'd know that the time-frame and monetary targets were not achievable.

I got a couple additional grunts and I left. They hired some poor kid within 60 days and promptly fired him after his first quarter. I know that kid made zero traction in those 12 weeks. I just hope he got something for his efforts. I never did get a call from that EVP  but his arrogance was so grand I'm sure he could not recognize the error of his ways. Sadly, he remained with this company and will likely reap some personal benefit from the acquisition. Maybe this fellow has other redeeming qualities but if I were doing due diligence on this firm, he'd be on the way out.

But the ultimate irony in all of this is that this software house is being acquired by a services firm. I'll be really interested to see how well this fellow's mindset, ethos, people skills, etc. fit in with his new employer.

Partnerships, in case you haven't guessed:

- can't be mandated. What your firm wants and what it can get are often two different things.

- often take time. Look at married couples, some of them get married after just 3 months of dating but most take between 1-2 years. I know one couple that took 8 years to get to the altar. Whether it's marriage or software/service alliances, one side can't pressure the other into a more permanent situation if either side has commitment issues.

- have to make sense for both parties. I used to get software vendors come in with partnership agreements in hand on their first meeting. Except for the show Dharma & Greg, I'm not aware of anyone getting hitched after just one date. Proof that the partnership works is often key to making a successful services alliance work. No proof - no deal.

Partnerships are not that difficult but they are different. Call some time if you're pondering one of these matches.

(This blog cross posted on both Services Safari (www.servicessafari.blogs.com and Software Safari www.softwaresafari.typepad.com).)

Technorati Tags: Acquisitions, Services, Software

There has been an explosion of acquisitions in the software industry in recent weeks. The consolidation within the sectors continues.

One the bigger deals that just got announced involved a firm that made a run at me a couple of years ago. What this company wanted was someone to broker a big alliance with large systems integrators with their number one target being my old firm: Accenture. I was intrigued enough to hear what these executives had to say. I met with the CEO and several other execs but eventually I was sitting across from the EVP of Sales. Apparently, I would be reporting to this fellow.

Sales executives have a view of alliances and partners that is no different than how they view many things in this world. They believe that any outcome can be achieved, if and only if, they:

- insist the outcome be delivered

- ignore critical evidence to the contrary

- keep repeating the demand. I'm guessing the more times they hear themselves say it, the more achievable and believable it gets.

- act ever more impatient

- claim that the outcome is totally within control of the person in front of them

- etc.

Well, I told this fellow that there were two big obstacles with setting up Big 4/Systems Integrator alliances. First, many companies still act and are organized as confederations. While you may  get an alliance deal with one partner in one industry in one region or country, you have to hunt down 60 more just like him/her to get a firm-wide deal. It's like playing Whack-a-Mole on a global scale. Second, within these companies there are partners and then there are partners(or executives) that count. For a firm with 1300-3000 partners/executives, how do find the one person who can influence all of the rest of the partners/executives to go along with him or her. Third, these companies are slow. The tectonic plates often move faster than these risk-adverse firms do. You progress according to their timetable not yours. Fourth, big alliances often start off with lots of baby steps until one day, BAM, the whole firm jumps on board. Linear relationships are rare with these firms.

I've given numerous talks, coaching sessions, etc. on this subject and I can speak with authority on this matter as I was the initiator, gate-keeper, advocate, deal killer, etc. of these for Accenture for almost a decade.

Back to this EVP of Sales, he grunted when I explained how things would likely play out and what the most likely timetable for success would be like. He then concluded that I "obviously didn't believe in their product line" and assumed I couldn't or wouldn't do the job. Realizing that logic, reasoning and other critical brain functions may not be part of this guy's DNA, I decided to offer him one further piece of advice. I told him that if he does interview a candidate who is willing to commit to his terms (i.e., $400K in sales revenues via Accenture joint deals every quarter starting with the first quarter), then this person is not qualified for the job. If they really understood what was being asked of them, they'd know that the time-frame and monetary targets were not achievable.

I got a couple additional grunts and I left. They hired some poor kid within 60 days and promptly fired him after his first quarter. I know that kid made zero traction in those 12 weeks. I just hope he got something for his efforts. I never did get a call from that EVP  but his arrogance was so grand I'm sure he could not recognize the error of his ways. Sadly, he remained with this company and will likely reap some personal benefit from the acquisition. Maybe this fellow has other redeeming qualities but if I were doing due diligence on this firm, he'd be on the way out.

But the ultimate irony in all of this is that this software house is being acquired by a services firm. I'll be really interested to see how well this fellow's mindset, ethos, people skills, etc. fit in with his new employer.

Partnerships, in case you haven't guessed:

- can't be mandated. What your firm wants and what it can get are often two different things.

- often take time. Look at married couples, some of them get married after just 3 months of dating but most take between 1-2 years. I know one couple that took 8 years to get to the altar. Whether it's marriage or software/service alliances, one side can't pressure the other into a more permanent situation if either side has commitment issues.

- have to make sense for both parties. I used to get software vendors come in with partnership agreements in hand on their first meeting. Except for the show Dharma & Greg, I'm not aware of anyone getting hitched after just one date. Proof that the partnership works is often key to making a successful services alliance work. No proof - no deal.

Partnerships are not that difficult but they are different. Call some time if you're pondering one of these matches.

(This blog cross posted on both Services Safari (www.servicessafari.blogs.com and Software Safari www.softwaresafari.typepad.com).)