April 9, 2008
By Howard Baldwin, News@Cisco
Among technology integrators, depth of knowledge wins out over breadth of knowledge. Being a dilettante does not help when an unfamiliar problem emerges. On the other hand, when a new technology emerges, how can consultants easily absorb that capability into their toolbox? It is an ongoing challenge, and one that technology specialists and systems integrators for Cisco and other vendors have begun to solve in an innovative and resourceful way.
These forward-thinking partners are aligning themselves into collaborative groups, or ecosystems. They can be loosely or tightly coupled, but however they are structured, they are helping partners who specialize in a particular technology, geography, or industry increase both their revenue and their expertise through collaboration with others. In fact, according to a study commissioned by Cisco and conducted by New York-based research firm Illuminas, 31 percent of channel revenue was generated via partnering in 2007, a jump of 15 percent over 2006. Furthermore, 62 percent of partners believe collaboration will continue to grow over the next five years.
What is spurring the rise of these ecosystems? What are the advantages, both economically and educationally? How are partners finding other partners? How do these partnerships work-and what are the pitfalls? News@Cisco spoke to both Cisco channel experts and independent business specialists to get a sense of this new trend and its benefits for partners globally.
What Drives Collaboration?
The key to collaboration, according to Don Tapscott, coauthor of Wikinomics: How Mass Collaboration Changes Everything, is the network. The cost of collaboration in an open market was always greater than doing business inside the boundaries of a corporation, he maintains, but the Internet has created a global platform that substantially reduces collaboration costs. "The powerful thing about network business models is that they enable people to self-organize, to come together and create value for customers."
Within the context of technology, such as partnerships among Cisco partners, the logic is simple. A partner specializing in one area or industry-say, security or banking-can collaborate with another who is an expert in contact centers. Each brings their respective expertise to the table to provide the customer with more value, without having to invest themselves in staffing up in those particular areas.
No one knows this better than Baskar Subramanian, vice chairman of Servion Global Solutions, a Cisco partner based in Chennai, India, that focuses on contact center solutions for various vertical industries. He frequently encounters Cisco partners who have a sales opportunity to build a network for a bank, but the bank wants to include a contact center, for which Servion does not have the necessary expertise or background.
"It's an ideal opportunity for us. We have banking experts. We have contact center experts. With the two partners working together, both partners benefit," he says. "Servion gets revenue for systems integration and our application, and the local partner has made a networking sale. At least 50 percent of my business comes from working with partners within the Cisco ecosystem."
Other Ecosystem Advantages
There are other advantages to being part of an ecosystem, insists Paul Cronin, executive vice president of Atrion, a Warwick, R.I.-based Cisco partner that is part of a 28-member collaborative community called 1NService. It was specifically formed 10 years ago to support its member companies, many of which serve specific geographic regions (21 of the 28 are Cisco partners); Atrion joined five years ago.
"It offers a great opportunity to network and learn more about the technology," he says. "We share information about what works well and what doesn't," says Cronin, in terms of both business tactics and technologies. "The network helped us accelerate the growth of our company, because I didn't have to learn a lot of things the hard way."
The community is also invaluable for expanding a company's technological capabilities without making a huge investment, he says. "When we first joined 1NService, we had stayed away from unified communications. But there were unified communications partners in the community, so I had access to the intellectual capital and best practices of those companies. I could leverage those results to build my own practice."
The strategy paid off, Cronin says. "Today, unified communications represents about 40 percent of my business. I would have spent at least 20 times what I paid for membership in the first three years to learn about unified communications." In addition, he says, Atrion's annual revenue derived through its 1NService membership has consistently exceeded 12 times its investment while providing a higher level of client satisfaction.
The Nuts and Bolts
How does the collaboration work in practice? Partners suggest several tactics for hands-on collaboration and communication. "No sale can be made unless we've already met the other partner face to face," Subramanian says. "There's a tremendous amount of presale activity that goes on to make sure both of you are dancing and singing the same tune." For companies with which Servion works closely, he says, there are monthly meetings either by phone or in person to discuss opportunities and projects.
In the 1NService community, Cronin says, there are several methods of communication. There are face-to-face meetings twice a year and monthly teleconferences. Each company has a liaison through whom general communications go, but employees with specific responsibilities-salespeople, executives, human resources administrators-also maintain communications through e-mail queries, he notes. In addition, they schedule meetings at vendor conferences.
Technical employees maintain an extranet. "Most technical people won't even bother contacting a vendor for support, because it takes too long to find the right person. They'll go to the other experts first, because it's quick and they have a trusted relationship with each other," Cronin says.
To aid partners, Cisco is creating what it calls an online Partner Exchange, according to Andrew Sage, Cisco's vice president of worldwide channel marketing. Partner Exchange has collaborative elements similar to a social networking site, he says, and it will allow partners to find and be found by appropriate colleagues, to substantiate capabilities, and to validate other partners' references.
The Importance of Trust
This collaboration relates to an issue that Tapscott considers crucial to ecosystems: trust, which encompasses four key values that partners must remember. "You must have honesty; you must consider the interests of the other partner; you must be accountable to the other partner; and you must have transparency," he says. "Openness drops collaboration costs considerably within an ecosystem."
With tools such as the Web and Partner Exchange, good news about your work will travel fast when company executives are doing their due diligence about partners. "You'd better have integrity, and have good values baked into your DNA," Tapscott says. "Companies need an explicit strategy based on these principles to build trust." That is the key to building success through collaboration.
Howard Baldwin is based in Sunnyvale, CA.