A quandry on partnerships

The day job has had partnerships in the past, and maintains a number of active ones. We have reseller partnerships, joint service/support partnerships, development partnerships … and so forth. Not all (or even a majority) are listed on our site.

What we view as a partnership is a relationship which will be mutually beneficial … aid both parties … without causing harm to either. If we are going to partner, then there is a little of an exchange of something of value, so we get something akin to a 1+1=3 moment, for both organizations. Not 1+1=3 for one, and 1+1=0 for the other. The latter is a non-starter.

To date, some of our partnerships have borne fruit.

Working with TerraSoft and now Fixstars, we have a product either of us can offer, and help drive sales for both. We both talk about it with customers. We work together to help customers. 1+1=3 for this partnership (and Fixstars has a great team, which makes it even easier). Trust develops, and thoughts on how to drive into deeper markets develop.

Some of our partnerships were very one sided. The 1+1=3 was, well, theoretical. Coded into the partner agreement, but in most of the cases we encountered, was actively resisted by one side, worked around, and so forth. We watched (in horror) as the other group made terrible mistakes, ignored advice and counsel, and basically did their own thing. They took a very good, forward thinking action by a senior VP, and turned it into something that honored neither the spirit nor letter of what he intended before he left to take on a larger role in the company. Suffice it to say that we have learned a great deal from this experience. Some companies have problems with a collective ego. They can’t accept that they might not have the appropriate expertise to do something they wish to, no matter how many times they try to repackage what they have. We are not DB admins, we won’t go after such opportunities, because we don’t know enough about it to be meaningful. Likewise, we know HPC, we do go after opportunities, and we we can be very helpful to various organizations. But they have to actually want this help. If they don’t want it, or they feel it was imposed upon them, well, what we experienced will be the norm. Its hard to surpress your own ego to allow 1+1=3 to emerge. It takes a lot of guts. The senior exec we worked with, he had guts, vision, and a plan. It takes, well, intestinal fortitude to accept that you don’t know everything, and admit when you need help. To understand that the group you work with doesn’t want your job. They want you to be successful, so that they are successful. The things are linked. 1+1=3.

As you might guess reading this, not all of our partnerships have been successful. I’ve been learning about the signs of potential failure. I’ve been learning about what makes things work/fail. I am starting to notice patterns.

When senior execs own and maintain ownership and focus upon the partnership, it has been usually quite successful. Communications exist, problems get solved, and so on. This is why I am holding Fixstars up as an example. It is successful due to senior executive sponsorship.

When senior execs pass this partnership down the line, or it originates lower and is managed lower … well … then its hard to see how it can succeed. There is no imperative to make it work. There is no joint company interest to do this. One company is interested in 1+1=3, one is less so.

Of course, this rule isn’t universal. We have had senior execs own a relationship, and then attempt to take our “1” from us. Two … no … three different companies have tried this over the last several years. Its usually amusing when it happens. One time it killed an emerging relationship, that I had been cultivating over a 6 month interval. It usually happens when someone gets greedy. Such things happen. Business is a contact sport. And there are no merit badges for honesty and loyalty. 1+1 can’t ever be 3 in some people’s minds. So we have to learn whom they are, and make sure we don’t waste our time with pursuing them.

We see this in sales as well, slightly modified from a partnership. A ‘customer’ will tell us “you can unseat vendor X, if you provide Y”, where X is their favorite vendor which they are actively buying from, and Y is usually something like ‘build and loan us your biggest/baddest system, and we may deign to buy it, if you are lucky, and not return it to you after 30 days.’ Yes, they want the right to return, without question, very high priced, very customized gear, that would be hard to sell anywhere else, within 30 days. This is, from our long experience, usually the signal that they really want our logo prominently sticking out of their rack while their favorite vendor Y walks by. The purpose of this? To ratchet up pressure on vendor Y for bigger discounts. So we offer alternatives we can afford to offer. We enable them to get at a unit we can afford to loan them (one of our engineering machines) or remote access to machines we are building, so they can test. The latter is helpful to everyone, as they usually come up with some interesting tests. This is where Octobonnie came from. A serious customer has no problems with this. A non-serious customer gets unhappy, and brings discussions quickly to a close. We have shipped our big box on a try and buy 3 times with no sale. We stopped doing that, and sales began in earnest. Imagine that.

Of course, the thing that triggered this post was the actions of another partner. We developed something that makes them look good. We went on the road, and on the phone/email for them a few times to help push our joint capability. They are pointing to our stuff (in text, not back to us) on their site.

Good, right?

Well, except for a few things.

First, they seem to not wish to put a pointer back to us (e.g. a link) on their site. They will use our name, but not a pointer (link). All the talk of driving traffic to our site, as we offer something quite unique in this space? Well, mostly talk at this point. Would love to see more, haven’t seen more. We have asked. They do have a link up to drive traffic … to a very limited number of partners. Which we are not in. This is the setup part for the next point.

Second, and this one is even more annoying. They decided to have a sale on their products. Great, we can offer a customer our products using their technology at a lower price. Awesome! Makes things more affordable.

Only one problem.

We don’t have access to the sale pricing. In fact, only a very few selected partners of theirs have access to the sale pricing.

Thats not the bad part of it. Ok, it is bad, but not as bad as the next part.

On the page which talks about our stuff, our results using their tools, which we want to drive traffic to us … there is a) no link to us at all, just our name, the benchmarks we generated and b) a link to drive interested potential customers to our competitors.

Yes, this partner is using our work which we intended to help drive traffic to us, to drive traffic to our competitors.

I did forget one aspect. They asked us to place advertisements on our sites, and send notes out to our customer base to provide incentives to participate in the sale. That is, they did want us to actively drive our customers to our competitors. This is, well, wrong. At many levels.

Asked about it, they told us, effectively, pound sand.

So what are we doing about it?

We are providing the sale price to our customers. Even though we are not getting it from the ‘partner’. We are eating the difference, and it is cratering our margins on products that use their technology, something fierce. Because it is the right thing for us to do for our customers. We can’t obviously compel the partner to do the right thing. They are not. So we are doing the right thing on their behalf. This is a shame.

This partner is deriving benefit from work and results our group has worked on. Our competitors are deriving similar benefits from this work. We are being told that we cannot derive benefit the same way.

Yes, this is wrong, again, at many levels.

I should note that competitors exist for this partner, and we are starting to get courted by them, and we see a new emerging threat for them from another vendor. It is decidedly not in this existing partners interest to maintain this particular restrictive sale scenario for any substantial length of time. Though, I don’t see them changing, we are not the only ones in this boat with them. They might want to revisit this … sooner, rather than later.

Our hope is that they will see the light, fix their problems, and move forward. I am hopeful, but not wholly optimistic. Considering the competitive gear currently on the market, and some of the stuff I know to be coming down the pipe? Well, I am not sure antagonizing partners is a wise strategy. We try not to do this, and we work to fix things when alerted to issues. Two months of attempting to do this on our side, leads me to believe that they have no significant interest in this. Which, as we are not the only ones in this boat, and competitors are going to be coming at them (the prodigal partner) fast and hard in timescales measured in months.

The essential quandry is when and how to partner. What I find is that we need to define most everything up front, set expectations carefully. And then execute on those. We have to correctly manage expectations that aren’t set, and if a partner could be hurt by some action, we need to enable telegraphing this action to them, in advance, so they can adjust. And figuring out how to remedy defects so that there is no lasting damage.

Viewed 6538 times by 1227 viewers

Facebooktwittergoogle_plusredditpinterestlinkedinmail