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
NorCal PDMA 3
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
NorCal PDMA 8
Why Buy: Core to business Core to business Need intellectual
property Time critical
Shortage of in-house expertise
Acquire market leadership
NorCal PDMA 9
Why Partner: Speed Fastest Time to
Market Reduce Risk Leap Frog
Competition
Customize for Specific Markets
Customers buy best of breed
NorCal PDMA 10
Which horse to pick?
Build Buy Partner
Leadership Core Business
Time to Market
Reduce Risk
Build/Buy/Partner Case Studies
NorCal PDMA 12
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
NorCal PDMA 13
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
NorCal PDMA 14
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
NorCal PDMA 17
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
NorCal PDMA 18
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
NorCal PDMA 19
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
NorCal PDMA 20
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
NorCal PDMA 22
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
NorCal PDMA 23
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
NorCal PDMA 25
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
NorCal PDMA 28
You’re OFF!
NorCal PDMA 29
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 [email protected].
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 [email protected].
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