While many tried and true “traditional” channel arrangements (e.g., white-label agreements, strategic partnerships, co-branding, co-marketing, etc.) are proving effective and mutually beneficial, established ISVs are sharpening their focus on mobilizing their enterprise applications, and are beginning to compete more and more with some of their key mobility partners. ISVs have long recognized that new technologies are changing the face of business and have altered how companies and employees function. As their awareness of the transformational role which integrated mobile technologies can play in the enterprise rises, so too will the need to adjust their channel strategies.
Over the past 12-18 months, we’ve seen large established ISVs make bold declarations around mobilizing their enterprise applications and ERP suites and moving them to the cloud. IBM, SAP, Microsoft (and to a lesser extent, Oracle) have been trumpeting how mobile solutions are revolutionizing how businesses conduct their day-to-day operations—however, we see proceeding cautiously in the channel as rising in importance moving forward. It has become clear that ISVs are serious about incorporating mobile into their solution portfolio—they have not only put their money where their mouth is by means of acquisitions, but are also investing (via their venture arms) in startups, and internally in R&D and personnel. However, while we see this sharpened focus having the potential to pay big dividends, it is placing new demands on their channel strategies, and has the potential to disrupt very solid, longstanding, and mutually beneficial relationships.
Co-Opetition* and the Channel
Case in point, SAP has clearly been one of the more vocal and aggressive ISVs, with regards to their mobile strategy. While the company’s marketing organization has a long history of getting ahead of itself in terms of product development, they have made significant strides since their acquisition of Sybase, in terms of integrating and expanding the Sybase Unwired Platform, and have not overpromised on delivering what they have committed to in their pipeline. However, there are strong signals that they are beginning to move in the mobile application direction of several of their key mobility partners—specifically with workforce and asset management solutions. Based on the number of participants who are providing components of broader mobility solutions, “co-opetition” has fast become a fact of life in the mobile ecosystem, and moving forward, vendors must properly engage with partners and accept the tradeoffs associated with some of the customer environments they are brought into. Larger volumes (whether they are for software licenses or physical hardware) might make more sense, based on the likelihood of acquiring a large and potentially long-term customer; however, learning to work within the channel will be critical for all participants—including “incumbent” ISVs.
*Co-opetition refers to a model in which networks of stakeholders cooperate and compete to create maximum value for the customer.