Mathematician and astronomer Nicolaus Copernicus (1473-1543) changed how humans understood the heavens. Before Copernicus, people believed that the Earth was at the center of the solar system and that the sun and the rest of the planets revolved around it. That resulted in some complex theories of how planets looped and jumped around the Earth. Copernicus showed that things became simpler and cleaner when we understood that Sun was at the center of the solar system. All planets - including the earth - revolved around the Sun.We are living through a similar Copernican moment in partnering. Before today, people believed that their company was at the center of the partner network and that all the distributors and resellers and SIs and hardware and even customers revolve around their company (an “ego-system” model). The truth is that customers are at the center and all companies revolve around the customer to provide optimum value (an “ecosystem” model). Every partner will do the right thing for the customer - the gravity of each partner is for the customer - not for the vendor. This observation has important repercussions on how we understand partnering motions.I shared this and five other observations and three predictions for 2020 in my recent opening presentation at our Ecosystem Cloud Summit event we co-hosted with NetApp on December 5th at their beautiful headquarters in Sunnyvale, CA.
Six Observations in Partner Ecosystems
- We’re Living in a Copernican Moment (Ecosystem vs. Ego-Systems)
- Multi-Partner Collaboration (Channel and Alliances are Coming Together)
- Collaborating with Top Channel Partners (We’ve ignored the top partners driving 90% of revenue)
- Marketplaces Need Ecosystems to Succeed (Enterprises don’t buy like consumers)
- Co-Innovate Solutions (Need to develop outside-in muscle for speed to market)
- Neutral Ecosystem Cloud (Need a shared system of record, that is co-equal in security and rights)
If these observations pique your interest to learn more, check out my presentation and audience comments and questions by watching here: https://www.youtube.com/watch?v=BRf4z-KAc_I
Three Predictions for 2020:
These six observations have come about because of a global industry going through transformative change. Forrester Research states that nearly 75% of the world’s revenue flows through the ecosystems. We are transitioning into an “Ecosystem Economy” where companies working together with their ecosystem partners are delivering greater and greater value to end customers. Forward-thinking CEOs and senior executives recognize that it is absolutely critical to engage with and grow their partner ecosystem to drive faster, more predictable, and more measurable revenue to take advantage of the ecosystem economy.
Prediction #1: Ecosystem Impact will be quantified: Providing partner revenue attribution
Partner organizations have always struggled to quantify the true impact of their business ecosystem. The old challenge of demonstrating “influenced revenue” continues to be a source of friction between Sales, Partner teams, and senior leadership. Saddled with siloed processes and miscommunication and no single source of truth, partner ecosystem contributions are mistrusted and undervalued. Next year will be the time to course-correct - to finally quantify partner contributions and acknowledge the value of ecosystems and ecosystem leaders.I was talking with a partner leader at an F500 company and his #1 initiative for the coming fiscal year is to be crystal clear on the revenue attribution of each of his partners. His goal is to proudly and confidently quantify and share partner contributions with the c-suite. Other ecosystem leaders in the high tech industry are facing similar challenges, questions, and pressure to quantify contributions of their ecosystems with tangible proof about partner influenced deals. You might ask, how can we achieve this?In the mid-2000s, Marketing organizations were similarly challenged to quantify their contribution to leads coming into the Sales organization. Companies like Marketo and Eloqua created new innovative solutions, processes, and terminology into the marketing world, and today terms like MQL, SQL, and SAL are universally known as clear measures of marketing attribution of leads. We predict that in the year 2020, we will see that ecosystem impact will be quantified - providing partner revenue attribution with tools such as WorkSpan.
Prediction #2: Shared brand, innovation & relationship power: Partner programs will outperform going solo
As each company’s ecosystem value becomes more quantified and measurable, more organizations understand in real terms how valuable their ecosystem-led sales motions are -- and will make greater investments to take advantage ahead of their competitors. As Ray Wang, CEO and Chief Analyst at Constellation Research said at our Ecosystem Cloud event, “If you’re not investing in ecosystems today, you’ll be left in the dust -- you’ll fail.”Bottom line, in 2020, we will continue to see greater investment in ecosystems and partner programs to drive more co-innovation with partners and more joint sales opportunities to grow business together.
Prediction #3: Ecosystems are driving strategic advantage: CPOs (Chief Partner Officer) emerge in the c-suite
As this trend continues, more and more organizations will understand the strategic opportunity of jointly selling with ecosystem partners and will elevate a senior leadership role -- a Chief Partner Officer -- to drive the business forward. As the Marketing profession transformed with tighter measurement and clear attribution, the role of Chief Marketing Officer emerged and became standard practice. We expect this dynamic to apply with partner ecosystem leaders, that as clear definitions, trustworthy reporting, and strong revenue attribution become dominant, the Chief Partner Officer will be a requirement in modern boardrooms.We’re already seeing this come about with organizations like SAP appointing Karl Fahrbach as their Chief Partner Officer earlier this year. We predict many more companies will recognize the value of their ecosystem partners as a revenue multiplier -- and therefore see the rise of the CPO.
The future is here
We predict 2020 will bring c-suite’s attention to revenue contributions by their ecosystems. Modern and innovative organizations will be early adopters recognizing the value hidden in their partner ecosystems, driving more co-innovation, creating more value for their shared customers, and accelerating revenue together -- with the Chief Partner Officer leading the way.