Why more services firms are foregoing monogamy

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.

Salesforce's partner of ecosystems include data players like Salesforce and Databricks and cloud providers like AWS and Microsoft

 

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:

  1. 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?
  2. 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?
  3. 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?
  4. 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.

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