Building Successful Partner Channels: in the software industry

"Building Successful Partner Channels" is a book laying out the roadmap for achieving global market leadership through independent channel partners in the software industry.

The book applies the business model and business model environment frameworks developed by Alexander Osterwalder and Yves Pigneur and concludes that taking the indirect route to market adds an additional layer of complexity to our business model as we leave the control of finding, winning, making, keeping and growing happy customers to third parties.

The book explains that the direct and the indirect go-to-market approach are not options we can choose freely between, independent of the nature of our business model and business model environments and it discusses when the indirect go-to-market approach is applicable and advantageous and when it is not. The book concludes that taking the indirect route to market requires that the channel is an integrated element of our product offering and value proposition.

The indirect route to global market leadership requires developing and maintaining a channel partner program and the book lists all the elements of this program including the critical channel partner P&L model. The book concludes that our partner program will change substantially as we move from early stage channel building to the mature mode where most of our revenue comes from existing channel partners.

The book describes the process for channel partner recruitment, and concludes that the initial process is very similar to the process of hiring top performing sales people. However, where we pay staff to perform their duties from the day they join, channels partners will have to make substantial investments before they reap the benefits of the cooperation. Channel partner recruitment is therefore initially a long process requiring substantial investments.

The dynamics of channel partner recruitment changes as we move from the early mode channel development stage to the mature stage and the book recommends that we should recruit as many channel partners as we possibly can. We then let them demonstrate where they belong in the channel pyramid classifying channel partners and the book discusses how we should manage each group.

A full chapter is devoted to discuss adopting the indirect channel approach at a later stage after having applied a direct approach first, introduces some simple sanity checks to verify if switching is feasible and explains how this switch can be accomplished.