- July 22, 2024
- Posted by: Larry Walsh
- Category: Blogs
This is the first in a blog series on the pillars of ecosystems.
By Larry Walsh
Here’s an interesting thing to ponder: Can you have an ecosystem without customer engagement or a market opportunity?
The purist’s definition of an ecosystem is two or more (typically the latter) companies working together to combine their respective resources to address the problem or need of a customer. So, yes, you can have companies working together in an “ecosystem” regardless of engagement or opportunity, but without a market outlet, the collaboration is pretty much meaningless.
If necessity is the mother of invention, opportunity is the mother of the ecosystem. The entire idea of an ecosystem is that companies with unique skills and capabilities come together to offset their gaps or weaknesses and generate more value for the customer than they could on their own. The customer is the source of the ecosystem’s purpose.
Most ecosystems today are transient and opportunistic. A company lands a deal with a customer but needs help putting all the pieces together, so it reaches out to vendors and peers to form an alliance.
In numerous conversations with ISVs, Channelnomics has heard the same genesis story: “We were brought into the deal by the vendor” or “an integrator reached out to us to help with the project.” In these cases, do the parties work together a second time? Yes, but they can’t plan on it. It just happens out of necessity, making the ecosystems episodic.
For ecosystems to be truly value-producing for vendors, they need persistency and durability. Rather than thinking about ecosystems as the number of partners that can come together to address a single opportunity, vendors should look to foster relationships that are more hard-coded — multiple partners that work together consistently to capitalize on market opportunities.
A good example of this is VCE, or Virtual Computing Environment, a major initiative launched in 2009 by VMware, Cisco, and EMC. The three companies came together to develop high-performance data centers. They recognized a need in the market for solutions that none of the respective companies could address on its own. They created reference architectures known as vBlocks that defined how their technologies could come together to create value-generating systems. Then they enlisted partners and formed a joint venture to bring it all together.
Some vendors are passive participants in the ecosystem process. They know multiple partners may work together in a customer engagement, and they’ll act to support their partners in that process, but they often shy away from creating and curating intrachannel relationships.
If vendors consider ecosystems to be the future, and a significant source of value generation, they can’t afford to be passive about their formation. The starting point is identifying the opportunities that make ecosystems necessary. Vendors need to define market opportunities, detail the components (products, services, resources, and skills) required to address those opportunities, define the types of partners that fill the bill, promote the opportunity to partners in their networks, and encourage the formation of active channel ecosystems.
By identifying opportunities, vendors take the guesswork out of collaboration, explaining why partners should work together and defining the probable outcome of their joint efforts — monetization. Taking an active role in opportunity identification will expedite the formation of meaningful ecosystem relationships and foster more predictable outcomes.
Larry Walsh is the CEO, chief analyst, and founder of Channelnomics. He’s an expert on the development and execution of channel programs, disruptive sales models, and growth strategies for companies worldwide.