A simple definition of an ecosystem in business might be “community of organizations interacting to drive value to a common customer”. However, my experience and literature review suggest that a partner channel ecosystem is much much more. In this article I will share a detailed example of why partner channel marketing & sales matters as well as some thoughts around the much larger ecosystem valuation.
In 1983 and 1984 Maconomy and Navision were created with two distinct strategies in Denmark. Maconomy was acquired by Deltelk for US$73 Million (2 times gross profit) and Navision by Microsoft for US$1.2 Billion (12 times gross profit) 8 years earlier. The difference in strategy? Well that’s what we will get to in this article so keep reading (Antero and Andersen, 2013 p. 18). But first I’d like to suggest we look at the bigger picture ecosystem.
Over the past few years well after these acquisitions took place, enhanced formulas surfaced for determining the value of a company which now includes its Brand Equity (BEq). I believe a large part of what brought the value for Navision was the BEq. Their “channel partner” strategy or indirect sales approach created 2400 partners which was critical to the success of Navision. This partner ecosystem included sales, client support, market verticalization and localization, and an ability for the company to move very fast to capture marketshare.
Channel Partner programs bring value, simple. SaaS companies who employ such a strategy can demand revenue premium as a result of their BEq and the consumer value which is gained by bringing services and products together. Per Williamson and De Meyer (2012), companies who are complementors or partners co-create value for their mutual customer. Building such a business ecosystem allow for companies to move faster and become more flexible to meet customer needs. In addition, the creation of strategic partnerships enhances the lead firms competitive advantage and the ability to capture increase in valuation.
Does your organization have a partner program? If so, would you be interested in joining my dissertation research project which will further examine the partner ecosystem and how it impacts revenue growth? If so, please comment or message me.
Antero, M. C., & Andersen, N. B. (2013). Why-a-Partner-Ecosystem-Results-in-Superior-Value_-A-Comparative-Analysis-of-the-Business-Models-of-Two-ERP-Vendors. Information Resources Management Journal, 26(1), 12–24. https://doi.org/10.4018/irmj.2013010102
Williamson, P. J., & De Meyer, A. (2012). Ecosystem Advantage: how to successfully harness the power of partners, 55(1).