Software distribution partnerships--got to know what you want
When you set out to form software distribution partnerships, you know one thing at least: you are looking for someone to sell your stuff. Beyond that, though, many companies wade into this phase of partnering with few other things decided.
And that's a problem.
Are you looking for the partner to fulfill any other roles besides sales? Like, say:
- Installation
- Systems integration & project management
- Ongoing account management
- Providing complementary software
- First-level maintenance
- Second-level maintenance
It's important to have a point of view on this, because it will help you narrow down the types of companies who will be good partners (and perhaps more importantly, the types who won't).
Let me describe two partnerships at the extremes of the distributor spectrum:
Partnership 1: the software provider wants the distributor to sell the product, but the software provider will do all the installation work, any integration/customization required, ongoing maintenance.
Partnership 2: the software provider wants to sell a standard platform, and wants the distributor to install, customize, integrate and provide most maintenance (the software provider only provides core product customization and level 3 support for bug fixes to its platform).
These two partnerships will have very different commercial models, legal agreements, training, exclusivity provisions, etc. The type of partners you look for will be very different as well. Partner 1 can sell and doesn't need any other capabilities (e.g., manufacturer's rep). Partner 2 better also have lots of professional services, strong processes, industry domain expertise, a reliable brand name, etc. Partner 1 will need a share of the license revenue, but most of the overall revenue will be yours. Partner 2 will command a much larger share of each customer's spend, but will let you distribute much more widely.
So think about what you want before you start signing up partners. It'll save lots of money and headaches. And you'll sell more stuff, too.
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