Build, Buy, or Partner

How To Speed Your Time to Marketor

So Many Choices, so Little Time

Deborah Henken, Highland TeamNorma Watenpaugh, Phoenix Consulting

NorCal PDMA 2

Agenda

The Challenge of Product Management Build/Buy/Partner: Benefits and Tradeoffs

Case Studies: Success and Failures

Situation Analysis: What to do, When

Partner Assessment and Readiness: Choose and Enable Successful Partners

Recap: Build/Buy/Partner

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The Challenge of Product Management

“We need a whole product solution;

not point products”

“The product needs an analytical tool”

“We need Security features to be competitive”

“We Need it NOW!

My customer won’t buy unless we have management tools

“We need

a CRM

Product”

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What is going on ?

Create competitive differentiation Fill gap in product technology Offer a complete solution

The Question: Build Buy Partner

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Sustaining Competitive Differentiation at BEA

Application Server

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Build, Buy, Partner: Benefits and

Tradeoffs

BuildBuild

BuyBuy

PartnerPartner

Time to Market & Control & Profit

Cos

t &

Ris

k

Most product controlOwn the IPMost profit opportunity

Longest time to marketRisk in market shiftsHigh development costsHighest switching costs

Pros Cons

Shorten time to marketOwn the IP

Acquisition costsIntegration costs

Least ControlIntegration CostsShared gross margins -Least Profit Opportunity

Shortest Time to Market Conserves ResourcesTry before you BuyLowest Switching CostsCredibility and access

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Why Build: Technology Leadership

Pioneer in the field

Patentable technology

Need to own the intellectual property

Core business Have time or can

build in increments

Have in-house expertise

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Why Buy: Core to business Core to business Need intellectual

property Time critical

Shortage of in-house expertise

Acquire market leadership

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Why Partner: Speed Fastest Time to

Market Reduce Risk Leap Frog

Competition

Customize for Specific Markets

Customers buy best of breed

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Which horse to pick?

Build Buy Partner

Leadership Core Business

Time to Market

Reduce Risk

Build/Buy/Partner Case Studies

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MarketFirst OEMs Business Objects to add Analytics to Marketing Campaigns

Create Competitive Differentiation

HP Buys CompaqTo Broaden

ProductLine

“Network Assoc. partners

with Internet Security

Systems to combat hybrid

security threats”

Vocent builds Voiceprint

Authenticationsolutions

Channel

Wave and

E.piphany

integrate

PRM and

CRM

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Fill Gap In Technology

HP OEMs

Canon printers

BEA partners with WebGain for application development tools

Sun OEMsVeritas

for storage management

Intuit and Verisign Collaborate to Offer Website solutions to Small Businesses

PC Mfgs buy

and assemble

OS, chips,

storage, etc

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Offer a Complete Solution:Whole Product Acquisition at PeopleSoft

Red PepperMftg Supply Chain

SkillsVillage

ServicesV

anti

ve

CR

M

Adva

nce

Busine

ss P

lann

ing

Intrepid

Retailin

g

TriM

ark

Insu

rance

Salemno

Mftg Quality

Campus Soln

Education

Distinction Consumer Supply Chain

TeamOne

Integration Services

PeoplPeopleSofteSoft

Situation Analysis:Build, Buy or Partner

Always Start with the Customer Whole Product Offering Product Adoption Lifecycle

NorCal PDMA 16© Frank Lynn & Associates, IDC

What are They Buying?

Source: IDC, High Performance Partnering Workshops

Whole Product Offering

Post-Sales

Support

Transactional Support

Pre-Sales Support

Integration

Services

Softw

are

Consulting

Hardware

TheProduct

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Elements of the whole product

Consulting services System hardware System software Development tools Server applications Application

development/ modification services

PC/client hardware Desktop applications

LAN products WAN connectivity

products Systems integration

services Training services Maintenance/support

services Server hardware Client hardware Software Network

© IDC

Source: IDC, High Performance Partnering Workshops

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Whole Product Case Study (Build, Buy or Partner) –The Database Wars

Informix/Oracle Wars:

Whole Product Solution:

Informix partners:1200 applications and tools partnerships

Informix buys Illustra

Oracle partners and builds applications

IBM buys Informix

Database

Development

Tools

Application Partners Hardware

OEMsSystem Integrators

Consultants

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Product adoption life-cycle

Time

First time buyers

Revenue

Laggards

44

Late Majority

33

Early Majority

22

InnovatorsEarly

Adopters

11

“early market”

1 S.D.1 S.D.

© IDCSource: IDC, High Performance Partnering Workshops

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Buyer motivation affects product decisions

11 “I will work with vendors of bleeding edge technologies, to fundamentally reshape my business or my competitive environment”

“I will deploy proven technology to deliver services expected by my customers”

33

© IDCSource: IDC, High Performance Partnering Workshops

“I will use stable but not yet common technology to develop a competitive advantage

2222

“I will buy commodity technology to cut costs”

44

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Partnering Requirements

Time

InnovatorsEarly

MajorityLate

Majority LaggardsEarly

Adopters

technical value-add

End of lifelogistics value-add

Goal: Bring product to market

Reason to Partner: Building own product, fill in gaps in technology with partners

Type of Partner: OEM, Technology co-development

Goal: Penetrate market/win marketshare

Reason to partner: Customize built product to specific market segments, whole-product, provide services

Type of Partner: SIs, VARs

Goal: Moving Volume

Reason to Partner: Widespread market penetration

Type of Partner: Distributors

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Partnering Examples

Time

InnovatorsEarly

MajorityLate

Majority LaggardsEarly

Adopters

technical value-add

End of lifelogistics value-add

Goal: Bring product to market

RSA and Symbian develop a small

footprint version of BSAFE for wireless

OS

Goal: Penetrate market/win marketshare

ATG and PWC offer integrated

solution for Insurance Industry

Goal: Technology Revitalization

Entrust and IBM enable

mainframe OS with Internet

PKIGoal: Penetrate market/win marketshare Moving to Volume

Citrix launches Nfuse Elite -Industry’s first

channel ready access portal server

Partner Assessment and Readiness

Enable Successful Partners What to think about as the product

moves from technical partnership to

sales partnership

Implications for the product

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Partner AssessmentWIN-WIN-WIN

Company stability — Do they have financial staying power? Do You ?

Trustworthiness — Is there two way sharing of plans, openness?

Strategic interests — Are you strategic to them and vice-versa?

Strategic Fit — Are they capable of performing their role and you, yours ?

Executional abilities — Will they be able to fulfill role on time and to spec, will you ?

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Partner Ready ChecklistBusiness

ModelTechnicalPartners

SystemIntegrators

VARs Distributors

Needs

IntellectualProperty

Dev Services ImplementServices

Margin/Volume

Technical Specs Product Documentation Early Access to Roadmaps Early Access to Product

GA Access to Products Joint Eng Relationship Developer Support Installation/Config Service Designed in Service Technical Training Service Training Sales Training Marketing Support Packaging/Bundling

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Build, Buy, Partner: Strategies to Market

Build: Technology Leadership

Buy: Core to business & time is critical

Partner: Fast time to market & reduce risk

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You’re OFF!

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Build, Buy, Partner

Deborah Henken is President of Highland Team, a marketing management consulting company specializing in successful go-to-market strategies. Her team builds revenue enhancing strategic marketing, channel development and awareness and demand creation programs. Highland Team is an Authorized Implementation Consultant of the Global Software Partnering and Alliance of IDC, adding value to clients by accessing the specific services, research and analysts needed to build best practice partnering strategies and programs. Deborah has a BS from Northwestern University and an MBA from the Kellogg School at Northwestern University. She can be reached at www.highlandteam.com or dhenken@highlandteam.com.

Norma Watenpaugh is the Principal of Phoenix Consulting Group, specializing in marketing for today’s challenging economy. Phoenix Consulting Group is an Authorized Implementation Partner of the Global Software Partnering and Alliance of IDC, complementing IDC’s research and analyst services with practical experience in partner strategy, program development and alliance management. Norma Watenpaugh can be reached at normaw@garlic.com.