Are most XaaS partnering models built from the ground up or transformations of existing programs?
With the growing market of XaaS and traditional product vendors making the accelerated shift to software sales, are most of the vendors transforming their existing programs to accomodate XaaS or are they creating a separate program for XaaS from the ground up?
Answers
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Very interesting question. I suppose the answer is both, or it depends.
But in my own experience the answer is that they mainly have to be built ground up. Why?
If it is a go-to-market partnership with channel partners, the value created by the partners, profit or revenue sharing and joint marketing activities are usually quite different. Marketing especially is likely to involve a lot of content co-creation and data sharing will be an issue (which may also trigger new data privacy issues that need to be addressed).
If it is a services type partnership, again the type of service is likely to be quite different, the service provider may need new UIs, APIs and access to data and this is also likely to raise privacy issues.
So the theory may be that one can adapt existing programs, in my experience the practice is that you are better off building a new and paying close attention to who creates what value at what point in the customer journey, content co-creation, data access and because of data access new privacy issues are likely to surface.
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Thanks, Steven! Very insightful. @Andréanne Young and @Josh Garrison — This question seems right up your alleys. Any additional insights here?
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I saw many big vendors and manufacturers adapting their Channel/Partner programs to XaaS: incentives, certifications, and training. It also demands time and investment: you are promoting internal and external change at the same time.
For these vendors, the main goal is to work closely with less partners that really understand and invest on this business model change towards XaaS.
Traditional partners, resellers are going to be left behind. Services-oriented partners will make the change and be preferred.
This TSIA report may help you as well (page 22): https://www.tsia.com/resources/the-state-of-the-technology-industry-2022
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I agree the answer is both + it depends, but also, in my experience, I see more success with creating a separate program and building from the ground up vs. transforming an existing program. Pros and cons to each approach, but generally speaking, having the dedicated focus, clear goals, freedom to operate, and decision making latitude that comes with a separate program/ground up build out gets the job done more efficiently and effectively. This isn't to say one shouldn't pay careful attention to making sure the new and the old programs "play nice" together and that attention should also be given to finding clear integration points, cross-over paths and future "merging" as various milestones and success criteria are met by the new program(s). All this said, I often see individuals stuck with the mandate to "do both in parallel." It is a challenge, but it is doable.
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