Channels & Alliances

Anaplan vs. OneStream: Duking It Out in CPM

March 14, 2025 by Kirsten Prost Leave a Comment

Coke vs. Pepsi. Nike vs. Adidas. Tesla vs. Edison. Packers vs. Bears. There’s nothing like a rivalry to focus attention and spark emotions.

Last year we wrote about the rivalry between Databricks and Snowflake in the data wars. You, dear readers, loved it, making it one of our top posts of the year. As an encore performance, we are tackling another tech battle brewing – the matchup between Anaplan and OneStream in corporate performance management (CPM).

Tercera has been tracking the Anaplan and OneStream ecosystems as part of Tercera 30 research for the last three years. Only one side has made the cut. Was it the feisty upstart (OneStream), or the somewhat more established player (Anaplan)? In this post, we take a closer look, deciphering key advantages and drawbacks of both solutions. We discuss the ecosystems for IT services firms considering partnering with one of these firms, and make a case for the one we’re confident will prevail.

What are Corporate Performance Management (CPM) Solutions?

First, some background. Corporate performance management (CPM) solutions (also known as enterprise performance management or EPM solutions) help organizations plan, budget, analyze and optimize their financial and operational performance. They sit on top of systems of record, such as ERPs, HRISs or CRMs, with data flowing in from those and other sources. Their functionality is twofold: consolidating and reporting historical financials, and supporting planning and forecasting.

The right CPM platform is like Mission Control for finance. It provides a single source of the truth so CFOs don’t lose sleep worrying about the integrity of their data. In its ideal state, a CPM should ensure a company won’t have conflicting numbers in different systems for the same data point—an all-too-frequent occurrence that drives CFOs bonkers, especially now that their responsibilities include other tasks such as allocating resources and optimizing supply chains. A holistic CPM that solves the full range of a company’s data needs can provide much needed organizational efficiencies and support better decision making.

Both Anaplan and OneStream play in this market segment, and are used by the Office of the CFO. However, they aren’t exactly the same.

OneStream vs. Anaplan: How are They Different?

The main differences between the two solutions is in the range of needs that they address, their ability to ensure a single source of the truth, and their scalability/extensibility.

Founded in 2012, OneStream supports the full spectrum of CFO data needs. It is a single, extensible platform that seamlessly integrates financial close, budgeting, forecasting, and scenario planning. As an enterprise platform, it has more power and can handle very large scale organizations.

OneStream excels at providing a true single source of the truth. It features a unified data model, where all departments work off the same numbers, preventing discrepancies. Its single-security model and reporting engine ensure real-time data consistency, and it has integrated financial data quality controls, where data is validated at ingestion to reduce errors and ensure accuracy.

OneStream is a versatile, powerful tool, a reality that carries its own burden. As one Tercera adviser put it, “OneStream’s biggest advantage is that it can do anything; Its biggest challenge is that it can do anything.” With this power comes responsibility. You have to architect the system correctly from the start, which is why guidance from an IT services partner is so important. The fact that OneStream is laser-focused on customer success helps.

In contrast, Anaplan, founded in 2006, today is more of a point solution. It is flexible, and fulfills a department’s forecasting and planning needs with relative ease. Smaller and lower-end commercial companies may opt for Anaplan because it can be deployed more quickly. However, it isn’t as effective at handling the broad range of a CFO’s requirements, such as reporting, consolidation and compliance. Customers will likely need to bring on and stitch together other tools to modernize the finance function, resulting in a spider web of applications rather than an integrated solution.

Below are two recent Gartner Magic Quadrants that highlight Anaplan as a leader in financial planning, but its absence in financial close and consolidation.

Anaplan’s decentralized model-based architecture also does not ensure a single source of the truth. Anaplan allows different departments to create independent models. While some customers may initially like this flexibility, it can lead to data fragmentation and inefficiencies. Teams can have their own assumptions, drivers, and calculations, causing inconsistencies. Users must check data accuracy and integrity using manual reviews, external databases or third-party validation tools. This decentralized approach, and the lack of built-in financial data quality controls, can also pose scaling challenges for large enterprises. More models intensify reconciliation demands, increasing the risk of data inconsistency.

Even though Anaplan is a forecasting tool, OneStream offers more robust forecasting for a couple of reasons. First, it is built around financial consolidation, so forecasts are based on accurate historical financials—that essential single source of the truth. Second, OneStream has a sophisticated logarithmic AI model, with external factors and economic indicators built in. Logarithmic AI is a powerful type of AI that improves forecast accuracy. Other platforms that incorporate generative AI are not as powerful. With logarithmic AI, you can input fewer data points and dirtier data and still have a good predictive model. OneStream’s AI can be intimidating because it’s so powerful, but we believe it’s the future.

Finally, there are key technical differentiators. OneStream’s founders had extensive experience at Oracle and elsewhere, and they created the platform to solve difficult problems that companies faced with earlier CPMs. For instance, OneStream features “extensible dimensionality,” which means that it can easily add new categories of data without breaking the database’s structure. It also offers “relational blend,” a data management approach enabling the integration of financial and operational data from relational databases. This allows users to bring together structured relational data (like transaction records, detailed operations metrics, or ERP system data) with financial planning and reporting in a unified platform. This lets OneStream handle a volume of data that is difficult for other solutions.

How are the Two Solutions Evolving?

Both platforms are innovating to broaden their markets. OneStream is investing in simplifying its platform to increase adoption among mid-market customers. In 2024, it launched CPM Express, a solution packaging “decades of experience and best-practices” and reducing implementation time to 6-8 weeks. To simplify customer onboarding and boost adoption, in early 2025 it rolled out solution-based pricing. Separately, to reinforce its position in highly regulated industries, it has achieved FedRAMP High authorization, a top-level federal security certification.

Meanwhile, Anaplan is moving upmarket, transforming what was traditionally a planning tool into a more unified platform, with native tools that can help address more complex use cases. It acquired Fluence Technologies in 2024 to add financial consolidation capabilities. It is focusing on real-time, user-friendly modeling, to support enterprise-wide decision-making, positioning itself as a flexible alternative to traditional CPM solutions.

Both platforms are also extending the machine learning (ML) capabilities that they’ve built over the last few years. OneStream has introduced Sensible ML, a machine-learning-driven solution designed to enhance financial planning, forecasting, and decision-making. Meanwhile, Anaplan is investing heavily in AI-driven scenario planning to match OneStream’s advancements in predictive modeling. While mainstream adoption of these AI capabilities may be some years away, it’s clear that embedding them in these platforms is becoming a higher priority.

How are the Two Ecosystems Oriented?

OneStream’s ecosystem is tiered based on experience, into Diamond, Gold, Platinum, and Silver tiers. OneStream also offers a GSI tier, and a Development designation for partners building solutions in the OneStream Solution Exchange. The firm is committed to 100% customer success, so its partner model is highly-controlled and high-touch. As of December 2024, OneStream had more than 300 partners, annual recurring revenue of $568 million, 35% year-over-year subscription growth, and 1,600 customers with a 98% retention rate. You can learn more about the OneStream partner program here.

Anaplan is stratified by industry (Consumer, Manufacturing, Financial & Business Services, Technology, and Media & Telecom) and function (Finance, Supply Chain, HR & Workforce, and Sales & Marketing). Anaplan has a more flexible, open partner ecosystem, and offers opportunities to generate resale revenue. Anaplan, which was taken private in 2022 by software investment firm Thoma Bravo, announced in February 2025 that in the previous two and a half years it had grown annual recurring revenue from approximately $600 million to over $1 billion, added nearly 300 new logo customers, and expanded the number of customers with annual subscriptions greater than $1 million to over 200. In 2022, nearly 200 partners were listed on the company’s website. However, a recent analysis shows closer to 75 pure consulting partners.

Who Will Win?

Both platforms have the potential to continue gaining market traction, but OneStream has the pole position, especially when it comes to its services partners.

As a newer and broader platform, OneStream has a bigger role to play across the office of the CFO, especially within large enterprises. It is far more customizable for the inevitable evolution of use cases. We believe the company’s expansion into function-specific planning, AI-driven forecasting, and its strong financial data control framework make it the preferred solution for companies needing a true single source of truth. Additionally, OneStream’s recent IPO means the company is well capitalized to invest in growing its share.

Anaplan, while strong in flexibility and multi-scenario planning, has more limited upside for partners in our opinion. The data fragmentation inherent in its model makes enterprise-wide financial accuracy challenging, which will limit the company’s ability to move up-market. We also believe that it’s easier to expand downmarket rather than upmarket, giving OneStream an edge. While Anaplan’s business performance has done well under Thoma Bravo’s guidance, the company has been flat to down in both employee growth and number of ecosystem partners.

As many CFOs look to consolidate their tech stack to streamline operations, reduce cost and improve data quality, we believe OneStream is positioned to win. It’s why in 2022 Tercera invested in Black Diamond Advisory, a Diamond partner for OneStream that was recently named Partner of the Year for OneStream. So, to be fair, we might be a little biased here.

License resell: Free money or trojan horse?

February 8, 2025 by Garrett Blank Leave a Comment

On the surface, license resell revenue may seem enticing for IT services firms. Compared to lumpy, unpredictable project-based revenue, license resell can be a reliable source of cash with minimal cost and great margins. But this golden goose also comes with some long-term risks.

In this post, we review how firms should think about resell revenue as part of their overall business mix – when it could make sense, how to manage the risks, and how investors view this kind of revenue.

What are resell revenues and how do IT services firms earn them?

Simply put, license resell revenue is income that an IT services firm generates by selling an independent software vendor’s (ISV’s) products directly to an end user. Many ISVs have lucrative resell programs that encourage partners to sell their software as a way to expand market reach, and to leverage their partners’ established customer relationships and local expertise to drive revenue.

Many ISVs have lucrative resell programs that encourage partners to sell their software as a way to expand market reach, and to leverage their partners’ established customer relationships and local expertise to drive revenue.

Generally, partners earn a commission by collecting the difference between the software retail price that clients pay and the wholesale price charged by the ISV. Commission rates vary, but tend to range between 7% to 12% on the recurring fees that clients pay. If licenses allow unlimited usage, revenues may be fixed. If contracts are “pay as you go” or based on the client’s actual usage, revenues are typically variable.

ISVs will often tier their commission structure, with higher rates for partners that bring in greater sales volumes and have stronger relationships.

Most services firms will still charge a client a project fee for customization, implementation or ongoing support. Typically on a time and materials basis, although we are starting to see a shift to retainer or value-based pricing.

Why do ISVs incentivize IT services firms

ISVs tend to offer resell deals when they’re trying to quickly grow a new service. Resell commissions reward partners for upselling the ISV’s software to clients. When the ISV charges a pay-as-you-go fee based on usage (as is the case in some cloud contracts), the commissions motivate the partner to promote increased usage of the software.

The relationship is symbiotic. Services firms act as a sales channel for the ISV, and by providing recurring revenue, the ISV builds an ecosystem of partners interested in ensuring that clients are satisfied with the ISV’s product. Often the services firm acts as the first layer of support if issues arise with the software, saving the ISV from the expense of building its own captive support network.

More mature platforms do not offer resell commissions, or have limited commissions, because they’ve already established a large enough ecosystem and user base that it’s not required.

What are the benefits of reselling for IT services firms?

Resell commissions can be a predictable and attractive source of revenue in a business where fixed costs are high and revenues fluctuate significantly. In contrast to implementation work, which may yield strong revenues for a few months to a year while employees are busy, resell revenues arrive when clients pay recurring fees, usually monthly, quarterly or annually. As long as the client uses the software and the ISV continues its incentive program, the services firm earns revenue, which can be a critical source of cash to cover fixed costs, such as salaries, in lean times.

Resell commissions can be a predictable and attractive source of revenue in a business where fixed costs are high and revenues fluctuate significantly.

Additionally, the margin on resell revenues is very high. Consider a software contract with a retail cost of $10 million annually, with a 10% wholesale discount (the resell commission). The IT services firm collects the $10 million and remits $9 million to the ISV. Once the contract is signed, there is virtually no cost to the services firm, so the margin on the $1 million it retains easily exceeds 90%. In contrast, the margin for project-based IT services tends to range from 35% to 50%.

By partnering with an ISV that is aggressively building an ecosystem for a promising new product, a services firm can grow quickly through resale revenue. But as we’ll discuss, the window of opportunity is limited and firms shouldn’t overlook the risks that come with a dependence on this type of revenue.

What are the risks?

The lure of resell revenue is real, but more seasoned leaders and services investors know there are some significant risks that come with this reward. Here are a few that you should consider before building a business based primarily on resell revenues.

Any services firm that relies heavily on resell revenues should always assume that their economics will get worse, not better.

Revenue risk: Any services firm that relies heavily on resell revenues should always assume that their economics will get worse, not better. The ISV is free to reduce its commissions, and is likely to phase them out as its ecosystem grows, as it becomes dominant in the market, or as it comes under pressure from shareholders to boost profits.

ISVs don’t normally eliminate resell incentives abruptly, but belt tightening can still cause financial pain. For instance, an ISV that initially offered a 10% annual commission could decide to change the rate for existing clients to 7%. That would mean a whopping resell revenue cut of 30%. Services firms need to build this eventuality into their long-term revenue models. The art is anticipating when the resell revenues will dry up.

Ecosystem risk: Some ecosystems are so competitive that services firms will install or customize software at a hefty discount or for free in order to collect resell commissions. In these ecosystems, it can be tough for competitors to make a profit by billing for their professional services. Additionally, when an ISV reduces its incentives, firms that have been giving away their professional services will face an uphill battle in attempting to charge clients rates sufficient to offset the lost resell revenues. Many firms built on this free money may not have the culture, relationships or skills to survive the transition.

Credit risk: Firms should be aware that they generally assume credit risk for clients. As an intermediary, the firm owes recurring fees to the ISV for its clients’ software use. If clients fail to pay or pay late, some ISVs may work with the firm to find an acceptable financial arrangement. Others may not. Given that software fees may be very high, a delinquent or insolvent client could pose a major risk to a firm. To manage this credit risk, it’s important to handle the money owed to the ISV carefully. If a $10 million retail payment arrives at your firm and you still have two weeks before you need to remit the wholesale amount, it can be tempting, but risky, to use the funds to supplement your cash flow.

Contractual risk: In addition to credit risk, the firm may face contractual risks. The contract for the software is generally between the services firm and the client. If there’s a dispute, the services firm may get stuck in the middle, incurring liability or legal fees. That said, it’s advantageous for services firms to have direct contracts with their clients rather than having an indirect contract through an ISV. The former gives them more control, and they are far more attractive to strategic buyers.

How do investors feel about resell revenues?

Some investors may be cautious of a firm that relies heavily on resell revenues for the reasons mentioned above. Because the ISV is in control of resell commissions, there’s very little room for negotiating and there’s not much a services firm can do if an ISV changes its incentive model. This can be particularly dangerous if the firm’s revenue sources aren’t well diversified.

There’s not much a services firm can do if an ISV changes its incentive model. This can be particularly dangerous if the firm’s revenue sources aren’t well diversified.

Investors and buyers may also worry that the firm doesn’t have a competitive moat. If the firm is seen as a lower-value intermediary between the ISV and client, rather than a partner that differentiates itself based on its experience and value add to clients, it can hurt valuations.

All this said, investors and buyers do like the predictability that comes with revenue resell – especially if the business has a lot of debt on their books with covenants that require predictable cash flow.

If the firm is ultimately looking for an investment or a potential acquisition, it’s important to consider how to balance resell and other revenue. The guidance we give is that resell should be a sweetener to the business, not its sole purpose. Timing is also important, as there’s an ideal window for reaping this revenue and the margin accretion that comes with it. But having a sense for when those incentives might start to decline, is critical.

Avoiding the Trojan Horse trap

To take advantage of the benefits of resell revenues, while at the same time ensuring it doesn’t become a Trojan Horse that compromises long-term performance, firms should consider these three things:

1. Treat your professional services as a standalone part of the business (excluding resell revenue). A firm can get fat and happy on resell revenue and lose sight of the fact that margins for their services business are slim or declining, hurting value in the long run.

2. Diversify resell revenue sources. The one constant in services is change. Commission programs shift, customer buying preferences evolve. Don’t be so reliant on one source that you can’t adapt with the times.

3. Prepare for the inevitable and invest wisely. As platforms and programs mature, commissions will decline. Factor that into long term plans and invest profits wisely to scale the core business.

Those who rest on their laurels and live under the illusion that resell revenues will flow abundantly forever may be in for a surprise, especially when times get tight.

The survey says: There’s a sweet spot for partners

November 5, 2024 by Tercera Team Leave a Comment

Part 2 of the Tercera 30 survey blog series

In part 1 of our Tercera 30 survey blog series, we described how the majority of the 269 firms we surveyed for our annual Tercera 30 report are still reporting growth, despite headwinds.

In part 2, we’ll cover which partner ecosystems were the most popular, why firms are choosing to work with multiple software partners (a trend that we cover in more detail here), and how research indicates a sweet spot for the number of strategic partners a firm has.

Without further ado…

The hyperscalers and Salesforce are most frequently cited partners

More than 60% of services firms in our survey cited one of four vendors as their primary partner – Amazon Web Services, Microsoft Azure, Google Cloud and Salesforce.

It’s no surprise that the three largest cloud providers and the world’s leading CRM and customer experience company are the go-to partners for services firms. These four companies alone raked in more than $260 billion in revenue last year, and have mature, structured programs that support thousands of partners with revenue opportunities.

These large companies support partners through everything from co-marketing and events, to providing marketplaces to list offerings, to offering training and development for consultants. Some will even provide funding.

The next most frequently cited primary partners include: IBM, Adobe, Oracle, ServiceNow and BigCommerce. Overall, more than 25 primary partners were represented across survey respondents.

The next most frequently cited primary partners include: IBM, Adobe, Oracle, ServiceNow and BigCommerce.

When it comes to the most popular partner, that of course is somewhat subjective. However, the vendors selected by readers of the Tercera 30 for our 2024 People’s Choice Award were Atlassian, Databricks and Snowflake. Learn more about these awards and who came in second and third in this blog.

There’s a sweet spot for number of partners a firm should prioritize

While many services companies lean into one pillar partner, 83% of the technology services firms we surveyed said they had relationships with more than one software vendor, and approximately one out of five (17%) said they’re looking to enter a new software ecosystem within the next 12 months.

Services partners typically work with between three and six software firms. Not surprisingly, that number increases with company size, although not substantially.

For technology services firms of any size, having multiple partners delivers multiple benefits, such as opening the door to new ways to solve unmet client needs, diminishing risk and unlocking new growth channels. With the increasing complexity and interconnected nature of today’s enterprise tech stack, the ability to provide expertise across multiple technologies is becoming even more important.

However, services firms do need to be aware of how many is too many, and the distraction that can come from supporting too many partners. Becoming a top tier partner requires time, attention and resources. Trying to spread that love across too many partners can be challenging.

Services firms do need to be aware of how many is too many, and the distraction that can come from supporting too many partners.

In part 1 of this series, we highlighted the strong correlation between level of partnership and inbound deal flow. Top tier partners are nearly twice as likely as the lowest tier partners to say their partner brings them the majority of their deals.

However, there are real benefits to not putting all your eggs in one basket. This research piece from G2 highlights how buyers prefer to work with service providers who play across multiple software products and ecosystems.

Data from our survey also seems to prove this out. Services firms with two to three software partners reported the strongest growth, while services firms with either more or fewer partners do not grow as robustly.

If you combine the G2 data and our survey data, a sweet spot for the number of strategic partners a firm supports begins to emerge. G2’s research found a lift across satisfaction metrics for those consultants who were listed in two of G2’s ecosystem service provider categories, and found a notable dip in satisfaction among firms listed in three or more categories.

Services firms with two to three software partners reported the strongest growth, while services firms with either more or fewer partners do not grow as robustly.

It seems one partner may not be enough for customers, while too many can lead to diminishing returns and stretch firms too thin. Trying to be a master of many can result in being a master of none.

To learn more about what makes a successful software partner relationships, and the ecosystems we believe hold the greatest near term potential for services partners, take a look at our 2024 Tercera 30 report here.

The survey says: Tech service firms, and their partners, are still growing

November 4, 2024 by Tercera Team Leave a Comment

Part 1 of the Tercera 30 survey blog series

Software companies and their services partners aren’t immune to today’s economic uncertainties, including the ongoing impacts of AI, inflation and shifting global markets.

However, the majority of the 269 technology services firms we surveyed claim to be doing well, and say demand for their partners’ products has increased over the last 12 months.

This year’s survey was fielded in August 2024 as part of our Tercera 30 research. Respondents were primarily CEOs and managing partners from middle market technology services firms, and weighed in on everything from company performance, to perceptions on their partner ecosystems, to the adoption of AI.

More information on the survey and the respondents can be found at the end of this blog, and a full copy of the Tercera 30 report is available here.

When asked to estimate 2024 revenue performance compared to 2023, the vast majority of survey respondents said they had grown over the last year, with a median growth rate of 16.5%. Only 5% of respondents reported a revenue decline over the previous year. Lower middle market firms (those with annual revenue between $20 million to $50 million) reported better growth on average than those in lower or higher ranges of revenue.

Lower middle market firms (those with annual revenue between $20 million to $50 million) reported better growth on average than those in lower or higher ranges of revenue.

Sound too good to be true? We wondered the same, especially given what we’re witnessing across the larger services landscape and the first half performance of the publicly traded Global Systems Integrators (although that seems to be stabilizing.)

To validate our numbers, we triangulated the survey findings against LinkedIn headcount growth data across 140 technology services firms of various sizes. Using the headcount numbers as a proxy for growth, we found that most firms were indeed growing, and that growth rates were directionally in line with what survey respondents said.

The self-reported growth from survey respondents may be a touch high when you compare it to employee growth, however, it could be a sign that companies are finding they truly can do more with less (perhaps using AI and automation to make consultants more productive). It may also reflect the growing optimism we’re seeing across the tech services market.

Where is growth happening?

Trying to understand where growth was the highest and lowest wasn’t easy, as high growth and low growth firms existed in virtually every segment and ecosystem.

Some ecosystems, like the hyperscalers, did seem to afford more opportunities to partners. Partners in these ecosystems tended to report higher growth on average than those in other ecosystems reported.

However, growth appeared more correlated to firms being hyper focused on the customers they serve and the business problems they solve.

Perhaps this is why the vast majority (57%) of survey respondents position themselves as a Solutions Expert rather than an Ecosystem Expert (20%).

Top tier firms cite growing demand for partners’ products, high satisfaction

Most firms we surveyed said demand for their primary software vendor’s products is increasing. The majority are also likely to recommend their primary software vendor to a friend or colleague; overall, we found a net promoter score (NPS) of +55.

The majority of services firms are likely to recommend their primary software vendor to a friend or colleague; overall, we found a net promoter score (NPS) of +55.

Most respondents also feel that a healthy deal flow relationship exists with their partners; with half of firms reporting a fair balance of trade, signaling a mutually rewarding give and take relationship.

There appears to be a strong correlation between how positive these perceptions are, and what level of partnership the firm reports with their primary vendor.

Of the services firms we surveyed, a third reported being at the highest tier of their primary partners’ program.

Partners at the two highest tiers of partnership are at least twice as likely as lower level partners to say demand for their primary partner’s product has increased in the last 12 months.

The same correlation holds true when it comes to a steadier flow of deals. Top tier partners are nearly twice as likely as the lowest tier partners to say their partner brings them the majority of their deals. Conversely, partners in the lowest tiers are significantly more likely to say that they are the party responsible for bringing the leads, that they are on their own or that they are competing with the software vendor’s internal team for deals.

Top tier partners are nearly twice as likely as the lowest tier partners to say their partner brings them the majority of their deals.

With these stats, it’s no surprise that service firms put so much investment into climbing the ranks of these partner programs.

Interested in which partner programs are the most popular and the sweet spot for number of strategic partner relationships? If so, check out part 2 of our Tercera 30 survey blog series here. You can also check out which partners won our 2024 People’s Choice award here. Hint: Data and AI players saw the love.

More about the technology services firms we surveyed

Tercera surveyed 269 leaders of technology services firms to gain insights to inform our selection of the Tercera 30. We recruited the respondents with the help of an external research partner and assistance from G2 and 3Seven. Respondents completed the online survey between late June and the end of August 2024.

The people have spoken: Atlassian, Databricks and Snowflake win People’s Choice Award

October 30, 2024 by Tercera Team Leave a Comment

When we unveiled the 2024 Tercera 30 last month, we shared our view of the 30 best software vendors around which to grow a technology services business or practice. The report features 10 large, publicly traded software companies with mature partner ecosystems (Market Anchors), 10 growing, publicly traded companies that are leading their categories (Market Movers), and 10 privately held partner-centric companies that have both market and mindshare (Market Challengers).

While our selections are based on a multi-faceted scoring methodology that incorporates both qualitative and quantitative inputs, we were careful not to make the Tercera 30 a ranking. We list the vendors in each of our three categories in alphabetical order for that very reason. Partly because we have no interest in being an analyst firm, and partly because firms choose partners for different reasons. What is a great partner for one firm, might not be relevant for another.

Still, we’ve always wondered how those who follow the Tercera 30 view our picks and if they have favorites.

This year, to celebrate the third year of the Tercera 30, we asked our followers to weigh in on a new People’s Choice Award. We asked them to select the vendor who they see going above and beyond to support partners. Those that are driving demand now as well as future opportunities for services engagements.

Perhaps not surprising in today’s current environment, the software vendors specializing in data and artificial intelligence emerged as some of the most popular.

The People’s Choice winners across the Anchor, Mover and Challenger categories are Snowflake, Atlassian and Databricks.

Without further ado (cue drumroll)…the People’s Choice winners across the Anchor, Mover and Challenger categories are Snowflake, Atlassian and Databricks.

Each of these vendors are highlighted in more detail below.

People’s Choice Market Anchor: Snowflake

In the Market Anchor category, Snowflake claimed the top spot with 24% of the vote. Snowflake is a cloud-based data platform that allows businesses to store, analyze, and share data efficiently and securely. It is one of the smallest of the Market Anchors, but has become a dominant player in the modern data stack. Today more than 10,000 customers use the Snowflake data platform — more than 500 of those spend over $1 million per year.

Snowflake has a mature partner ecosystem, and depends on its partners to drive both customer satisfaction and data consumption through its platform. While growth has slowed in recent years, the company’s new CEO is pushing a rate of innovation that is sure to feed partners in the coming years. Especially as more organizations look to use their own proprietary data sets for GenAI initiatives, and build with programmable data and leverage industry AI applications.

Read more about Snowflake’s partner program here.

People’s Choice Market Mover: Atlassian

Atlassian received nearly one-quarter of the votes in the Mover category – a category that saw votes more distributed than the other two categories. Atlassian provides collaboration software for development teams, project managers and other business groups. These products are in increasing demand as work becomes more agile and distributed.

Atlassian may not be a household name in AI and data the way others in the Tercera 30 are, but it is using AI in innovative ways to drive enterprise productivity and relying on partners to show customers the way to an AI-enabled future. One of the most compelling attributes about Atlassian is that it goes to market almost exclusively through its 800+ channel partners. Atlassian’s dependence on partners translates into a high partner attach rate, strong marketing and enablement support, and a lucrative resell program.

Read more about Atlassian’s partner program here.

People’s Choice Market Challenger: Databricks

The privately held companies in our Market Challenger category produced our most definitive People’s Choice winner – Databricks. The company commanded a third (33%) of all the votes in this category. Databricks provides a unified environment for data engineering, data science and machine learning, which has given it an edge in the GenAI race. Because of this Databricks continues to see its prospects increase, underscored by a $43 billion valuation during its Series I last September.

The Databricks partner ecosystem has expanded dramatically over the last year, and now boasts 3,600 consulting partners. While large, the company’s partner ecosystem is still evolving and maturing. Our team will take a closer look at the intricacies of this partner ecosystem in an upcoming Tercera 30 profile on Databricks over the next several weeks.

And Second Place Goes To….

In the Anchor category, Microsoft Azure, Salesforce and ServiceNow all tied for second place with approximately 15% of the votes each, while AWS received 11% of votes.

In the Anchor category, Microsoft Azure, Salesforce and ServiceNow all tied for second place with approximately 15% of the votes each, while AWS received 11% of votes.

On the other end of the spectrum, some of the largest and most mature ecosystems didn’t see the same level of love. SAP received only one vote while Adobe and Oracle received none. This is somewhat surprising given how well SAP and Oracle seem to be doing over the last year and the high services attach associated with these platforms, but could have something to do with the legacy nature of these ecosystems.

In the Mover category, Nvidia had a strong showing with a surprising 18% of the vote. We say surprising given its partner motion with services firms seems to be more nascent than many other vendors in this category. Perhaps not for long!

Braze, a customer engagement and marketing automation platform that was new to the Tercera 30 this year, and enterprise finance platform OneStream tied for third place.

In the Mover category, Nvidia had a strong showing with a surprising 18% of the vote.

Unlike the Market Anchors, in the Market Mover category, no one was left out of the love, and each of the 10 Movers received some portion of the votes.

In the Challenger category, while Databricks pulled notably ahead of its peers in the voting, Anthropic, another first-time member of the Tercera 30, claimed 24% of the vote. The AI company was founded by former researchers from OpenAI, which happened to come in third place with 14% of the vote. It will be interesting to see how AI continues to influence the enterprise technology stack and partner choices moving forward.

In the Challenger category, Anthropic claimed 24% of the vote. The AI company was founded by former researchers from OpenAI, which happened to come in third place with 14% of the vote.

Learn more about the winners and stay up to date with the latest Tercera 30 news.

The People’s Choice votes provide yet another layer of perspective around the Tercera 30 – the software platforms we believe hold the greatest potential for services firms.

Be sure to check out our partner profiles library for more on members of the Tercera 30, including People’s Choice winners Snowflake and Atlassian and runners up ServiceNow and OneStream.

To be the first to view our upcoming profile on Databricks, subscribe to our newsletter and stay up to date on all the latest information about the Tercera 30 and the people and businesses that make technology work.

Why more services firms are foregoing monogamy

October 24, 2024 by Michelle Swan Leave a Comment

There’s a time and place for monogamy. But when it comes to working across an increasingly complex and interconnected enterprise tech stack, services firms are recognizing the value of not being too tied into just one partner.

Of course, some services firms do choose to focus on one partner, especially when they are in those earlier plateaus of growth. For good reason. Focusing on a smaller number of software vendor partners can help firms go deeper on platforms, and point finite sales, marketing and executive attention in a specific direction for greater impact. Being opinionated on a platform can also build trust with partner sales teams. If they know you have their back with customers and won’t recommend a competitor, they will be more apt to bring you into deals.

Yet, we’re seeing a growing number of services firms foregoing that singular focus – even in the early stages – to create a more diversified network of partners. Even pure-play firms that have been adamantly focused on a single vendor for years are looking to play in other software ecosystems. They are doing so judiciously, but they see diversification as a way to:

Offer more valuable solutions to customers that have complex, multi-faceted environments
Stay stickier with customers after an initial engagement is over
Manage the risk of having all their eggs in one basket

A recent Tercera 30 survey of 250+ services partners confirms this trend. The vast majority of respondents are already working with multiple software companies, and approximately one out five say they’re looking to enter a new software ecosystem within the next 12 months.

On average, services firms report working with between three to five partners. Not surprisingly, that number increases as companies scale, but not substantially. Even large firms recognize the value of focusing on a fewer number of strategic partners, and not spreading themselves too thin.

The Rise of Interconnected Ecosystems

The enterprise IT stack is both growing in complexity and becoming more composable. This means it’s becoming much more difficult to solve customer needs if you specialize in only one technology. The average large enterprise now has hundreds, if not thousands, of different applications – each of them collecting and producing data. Data, that if harnessed correctly, can be used by people and AI systems to create more personalized experiences, optimize processes and drive revenue. Something almost every customer is looking to achieve.

Certain software platforms tend to be the center of gravity for this data. Names like AWS, Microsoft, Google, SAP, Oracle, ServiceNow and Salesforce (to call out a few). Not coincidentally, services firms most often highlight these software companies as their strategic, or anchor, partners. It’s why we refer to them Market Anchors in our annual Tercera 30 report.

Each of these Anchor partners has hundreds of hardware, software and service providers orbiting around them, supporting or extending platform capabilities in different ways. And then each of those solution providers have their own partner networks, creating what we call an “ecosystem of ecosystems”.

Some partners are more agnostic and work across different ecosystems, while some are more specialized and tightly coupled with platforms. For example, Microsoft tends to be more tightly coupled with Databricks and OpenAI, while AWS tends to be more closely aligned with Snowflake and Anthropic. Nvidia is playing the field and working with nearly all Anchor partners.

The Ecosystem of Ecosystems In Action: Salesforce

Salesforce is a great example of how this ecosystem of ecosystems is playing out. Over the past few years, Salesforce has evolved far beyond a CRM platform, moving deeper into data, AI and everything that touches the customer experience. As the platform has evolved, so has its partner ecosystem.

When Salesforce first came onto the scene in the early 2000s, it had only a handful of software and services partners. Twenty years later, it has more than 11,000 partners around the globe. Nearly 3,000 of those are consulting partners.

When Salesforce first came onto the scene in the early 2000s, it had only a handful of software and services partners. Twenty years later, it has more than 11,000 partners around the globe. Nearly 3,000 of those are consulting partners.

Many of these consulting partners have built their business on the back of Salesforce, staying loyal only to Salesforce. Expanding their business by servicing different “clouds” within the Salesforce platform. Salesforce made this easy as it continued to grow, innovate and acquire its way into new areas. However, most partners now see they must do more than Salesforce today.

As Tal Frankfurt, founder and CEO of Cloud for Good, a Salesforce partner specializing in nonprofits and higher education, tells us, “When I started in the Salesforce ecosystem 15 years ago, we used to say, ‘If it’s not in Salesforce, it doesn’t exist.’ Today, we say, ‘If everything is in Salesforce, you have a problem.’”

This sentiment underscores the maturity of technology and the growing demand from customers (and Salesforce itself) that partners know their way around adjacent technologies and can work across data sources. Especially when it comes to effectively using AI.

This sentiment underscores the maturity of technology and the growing demand from customers (and Salesforce itself) that partners know their way around adjacent technologies and can work across data sources. Especially when it comes to effectively using AI.

Kevin Murray, VP of marketing and alliances at Zennify, a Salesforce partner specializing in financial services and regulated industries, tells us this is one of the reasons Zennify is doubling down on Databricks. “Unfortunately, not all customer data lives in your CRM. If we want to help our customers deliver on highly personalized marketing, service and sales experiences, we need to unify and standardize data from across the organization. That requires pairing knowledge of platform architecture with a broader data engineering skill set.”

So where else are Salesforce partners playing?

I’ll give you the typical consultant answer. It depends, but it’s largely dependent on the customer segment or industry a company specializes in. As Nick Hamm, founder and CEO of the on-demand Salesforce consultancy 10K Advisors, says: “If you focus on smaller businesses, then Snowflake, Oracle, and Databricks probably don’t make a ton of sense. If you focus on larger enterprises or are trying to move upstream, you may want to look there.”

For all but the largest firms, it’s tough to have more than two or three strategic anchor partners.

For all but the largest firms, it’s tough to have more than two or three strategic anchor partners. These are the partners that you go deep with and invest in building joint go-to-market motions, so it’s important to pick those wisely to ensure you get a high return on those efforts. However, you can go much broader when it comes to solution or technology partners.

Nick from 10K adds, “In the Salesforce ecosystem, there is a lot of opportunity to partner up with industry solutions or alternatives/extensions to Salesforce’s own technology, such as Logik.io for CPQ, Workato for integration or nCino for banking.”

Both Zennify and Cloud for Good have been capitalizing on this opportunity for years as industry specialists. For example, Zennify has implemented and optimized nCino for a number of its banking clients, while Cloud for Good has implemented Civis for many non-profits.

According to data from our Tercera 30 research, companies that listed Salesforce as their primary partner most often listed one of the hyperscalers (AWS, Microsoft and Google) and/or cloud data players (Snowflake, Oracle and Databricks) as adjacent technologies partners. Below is a map illustrating some of the other most common adjacent partners for Salesforce consulting firms.

What Will Your Ecosystem of Ecosystems Look Like?

Whether your primary partner is Salesforce or another software platform, it might be time to think about how your own partner network could evolve. If you’re not sure which technologies to pursue, start with these steps:

Look for unmet customer needs. Evaluate your partner relationships in the context of your customers’ most pressing needs. Where do you see glaring gaps that the current software you represent can’t fill? What other software products could fill in those holes and solve key challenges for your customers?
Pinpoint opportunities your customers are missing. Even if there are no obvious unmet needs, are there ways to add value with a different product or solution that complements or supports the primary platform?
Talk with your primary partner’s most trusted AEs. What applications and technologies are they hearing about the most from their own customers and prospects, where a services partner may be needed? Are these technical capabilities you could offer, or is there an opportunity to build a partner relationship with these software firms?
Leverage the Tercera 30. The Tercera 30 is a great place to start identifying both entrenched and emerging players that are focused on partner-led growth. Use the data within the report to identify ecosystems that might be a good fit to solve unmet client needs, and to understand the opportunities for new partners.

All these moves can help inform your partner strategy, but know it takes time and resources to build new partnerships so plan accordingly. In the early stages, you’ll be better off building technical competencies and developing customer case studies (even if it’s from within your existing customer base) rather than expending too much energy mining the channel and courting execs. Partners will value your success stories, technical chops and certifications over another round of golf and a press release.