GiantSteps/Media Technology strategies has
a philosophy of strategic technology and service partnerships
that derives from various sources. The most important is
the idea of a value network, as espoused in books like Information
Rules, by Carl Shapiro and Hal Varian. A value network is
a group of businesses with interdependent products and services
that, taken together, form a market. Another important concept
is the difference between a piece of pure technology and
a total solution to a customer's problem, as Geoffrey Moore
emphasized in his Crossing
the Chasm and Inside
Technology-driven businesses must either offer complete solutions
to customers' problems or choose to be part of someone else's
solution. It's either one or the other.
If you are building a technology-based product or service,
you must ask yourself these questions:
does my offering help a customer solve a problem?
is the difference between my offering and a complete
solution to the problem?
other vendors are there who can fill in the gaps between
my offering and a total solution?
are the pros and cons of building out the complete solution
myself vs. partnering for the
organizations make two mistakes: confusing a piece of technology
with a total solution, and rejecting
the idea of partnerships through "not invented here" attitudes.
The market for content
management systems has exhibited
both of these symptoms, although the same can be said about
markets that involve various other technologies. Content
management is technology infrastructure that supports content
muiltipurposing and digital publishing. However, it is not
a multipurposing or digital publishing solution by itself.
It is difficult to attach an ROI to content management per
se. In the early days of content management (roughly 1994-97),
vendors tried selling content management as if it were a
complete solution, and they failed. In fact, one early vendor
of content management systems, Documentum, explicitly decided
to choose vertical markets based on their ability to define
and build a total solution for that market that would achieve
major ROI for customers. Documentum succeeded where many
The "not invented here" symptom
also applies to the content management market. Various
(system integrators, service providers, etc.) have been successful
in building total solutions around content management platforms.
Yet many of these firms felt the need to build their own
content management functionality instead of integrating with
existing solutions. This is also a mistake. They chose to
build something that met near-term requirements and was easy
to integrate with because it was familiar. But later on,
they found that their home-grown offering didn't keep pace
with the market (which grew in features and began to commoditize)
and was a drain on resources to support and maintain. These
firms ended up with monkeys on their backs, and they suffered
The statements above apply to many different technology
markets, not just content management. In earlier days, they
applied to things like email systems, network file management,
and groupware. The key for any technology-driven business
is to figure out what its core value to the customer is,
concentrate internal resources on that, and partner for the
Some people argue against that statement: they say that
if you go to market with partners, you lose the exclusivity
of the customer relationship. That is a false argument that
dates back to the old days of vertical solution providers
like IBM and DEC. You can maintain long-term relationships
with customers through a combination of strong brand identity,
superior products, and a top-notch network of partners with
which to go to market.
Microsystems was the ultimate example of this in its
heyday in the late 1990s through the bursting of the Internet
bubble. Sun does not
produce solutions for customers; it produces
server hardware, workstations, storage devices, and related
products. (It has a professional services division, but that
exists mainly to provide implementation expertise that is
specific to Sun products.) Sun had developed strong brand
identity and was known as a key technology provider. Sun salespeople
often pitched solutions, instead of products, to their customers.
Yet they offered them through software vendors, system integrators,
and other partners; Sun almost never took a "prime
contractor" role. Sun's partners liked working with the
company because it had a powerful presence in the
marketplace but did not compete with them.
In other words,
Sun worked to optimize its position as a key player in various
value networks. Unfortunately, Sun was not able to
sustain its strong brand identity after the Internet bubble
burst, so its ability to maintain a strong partner network
In today's information businesses, one of the most important
executive positions is the VP of Business Development --
or, as it should more properly be called, Chief Partnership
Officer. It has become obvious that websites cannot function
without partnerships for distribution and marketing as well
as back end functions like e-commerce and customer service.
Similarly, content and technology organizations must understand
their place in their value networks and build partnerships
to strengthen it.
Expending precious internal resources on activities that
are better handled by partners is wasteful; the benefits
of partnering far outweigh the disadvantages. There are many
key factors in choosing the right partners; some are fairly
obvious, but they are worth stating. The most important is
that the non-core function for which you want to partner
is the other company's core business. Another is that the
two companies should be strategically aligned, meaning that
the companies should be after the same target markets and
have similar strategic goals. There should be minimal danger
that the two companies will compete or an understanding in
advance of how competitive situations will be resolved. Finally,
there should be good personal chemistry between the principals
of the two companies. The best way to find this out is to
actually start working together. Work on one or two projects
with the other company before launching a full-scale partnership,
merger, or acquisition.
Doing these things will result in a stronger business over
the long term, one that is part of a value network and offers
total solutions to customers.
GiantSteps Media Technology Strategies offers experienced
guidance to technology vendors in strategic partnerships
and other areas. Click here for more information.