BSS partnerships aren’t working, we need to change our approach

On the face of it, you’d think that partnerships would generally - if not always - be a good thing for companies seeking new routes to market for their products and services. Relationships based on a partnership agreement are less cumbersome and demanding than mergers and ideally are based on principles designed to support the common good. Clear targets and parameters can be established from the outset, and each partner can politely step away if and when the usefulness of an arrangement comes to a natural end.

On the face of it, you’d think that partnerships would generally - if not always - be a good thing for companies seeking new routes to market for their products and services. Relationships based on a partnership agreement are less cumbersome and demanding than mergers and ideally are based on principles designed to support the common good. Clear targets and parameters can be established from the outset, and each partner can politely step away if and when the usefulness of an arrangement comes to a natural end.

Accepting that these principles are broadly true, why is it that so few partnerships work as a route to market in the B/OSS sector? In my view, they fail precisely because they do not address these fundamental principles right from the start. Other factors such as power play and unsustainably ambitious or poorly aligned targets come much more to the fore, creating an imbalance that upsets the dynamic of any relationship and is difficult to correct over the longer term.

This lack of cohesion applies both to the bigger players as well as the minnows in our industry. The larger companies are already part of what some might describe as an “old boys network” that allows them to create their own ecosystems and claim their products are “best of suite”.

This mob mentality merely serves to create the subterfuge that complex and all-embracing products are best for clients - even though this is often far from the case. In fact, although clients may believe the myth that these products are “too big to fail”, they are often too big and unwieldy to implement in the first place.

At the other end of the spectrum, smaller players are guilty of a more haphazard and somewhat scattergun approach to partnerships. Rather than “best of suite”, their claim relies on being “best of breed”, but here they suffer from integration issues and a failure to align partnerships correctly with go-to-market strategies. What starts out as a seemingly good opportunity can end up being a completely unsustainable partnership in the long term.

So when we talk about partnerships in B/OSS, what should we do to make sure that they are of benefit to all parties involved? While fundamental principles are all very well, even better are well-established and concrete guidelines to ensure the best route to market for any given product.

In my view, there are some essential factors that should always be observed in the establishment of a sustainable partnership. One is to ensure that any partnership is clearly aligned with the go-to-market strategies of every company along the supply chain. Where there is no clear view of customer needs, then the partnership will wither and die.

Second, although I have already mentioned that mergers can be cumbersome and often unnecessary, some form of real equity participation is a valid approach. For one thing, it keeps each partner on its toes and ensures careful due diligence in advance to iron out potential bumps along the way. Finally, each company needs to have been successful on its own in order to succeed as a partner.

Ultimately, the value of partnerships is in direct proportion to the work that is put in on both sides to ensure a harmonious existence and a well-aligned route to market. A good partnership really can end up being much more than the sum of its parts.