Partner-to-Partner Relationships Changing the Distribution Model

By Arthur C. Cole

TMCnet Contributing Editor

 

Partnerships between vendors, distributors, resellers and consultants are undergoing a radical makeover due in large part to the growing complexity of modern network communications.

Instead of traditional relationships in which the largest firm, usually the vendor, calls the shots on a given project, the newest wave is so-called partner-to-partner (P2P) relationships that are more decentralized and more flexible in meeting customers’ needs.

“In terms of computer technology – hardware, software, storage, etc. – there is simply so much stuff out there that no one is an expert on everything,” said Chris Bolton, partner program manager for Pepperweed Consulting, an Indianapolis firm that has formed P2P relationships with HP and others. “And with compliance, Sarbanes-Oxley and pressure from investors, customers can’t afford to have projects go poorly.”

According to a recent IDC study, P2P programs are poised to exert tremendous influence in the network management market, and could deliver significant revenue gains for vendors and their partners, provided they master a new set of partner management competencies.


The study lays out four key considerations for entering into P2P relationships:

--Learn the underlying economic and social characteristics of partner networks.
--Be willing to provide a more decentralized approach to partner management and governance.
--Explore the latest science regarding partner management, such as management scorecards.
--Develop a set of best practices based on previous P2P network initiatives.

Most of the major vendors in the computer and communications field have had partner programs for a number of years, and many offer web portals to allow partners to exchange information. But the P2P movement goes a step beyond that. Its chief characteristic is a willingness among VARS, distributors and others to invite each other in on each other’s projects without fear of losing face in front of the customer.

“I think the partner community, understandably, is a very paranoid group of people,” Bolton said. “During the dot-com boom, margins were very fat, but they have been getting squeezed and squeezed and squeezed. We all want a certain level of customer control. This is a way to involve someone else in your job who won’t compete with you and make you look bad.”

Pepperweed’s primary P2P arrangement centers around HP’s OpenView suite. One partner is Arrow Electronics, which provides much of the hardware and software, bringing Pepperweed in for network and IT management consulting.

Bolton said that building synergies with potential P2P partners is crucial, not only to avoid competitive pressures within a given project, but to foster greater cooperation to share opportunities when they arise.

“The challenge comes when you’re doing software and I’m doing storage; if you bump into a storage opportunity, you’ll want to capture it by bringing in the partner who can address those needs,” he said.

After all, partnerships work best when all firms are working together to meet the customer’s goals.

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Arthur Cole is a freelance writer specializing in high-tech information and communications.