The Business Partner Model - Part 1

By Joe Francica

A few weeks ago, I asked the community of consultants and independent software providers, who were registered resellers of mapping software, if they thought that their "big brother" partners were squeezing them.I stated that the major GIS firms were probably moving away from the model of having smaller firms resell software and services because they were losing money in the services business that provided higher revenue margins.Independent listserv moderators were asked to post this message to generate feedback.

I received many emails, most negative in tone, but not as many as I anticipated.Given that there are several hundred resellers of many different mapping packages, I expected more letters.I can only conclude that most are quite satisfied with their relationship and that the software vendors are doing a good job of managing a channel that could foster conflict, if not administered properly.

Now, this is not to say that it is a perfect marriage.Several resellers are attempting to duck under the radar screen of their larger partner by selling only single copies of software or servicing accounts that are just too small to be profitable to the vendor.One reseller stated, "partners have to be offering something of proprietary value and/or work on all the marketing bits (establish a brand name, spend some on advertising, work more on client relationships) i.e.protect their assets and be of value to the parent company in selling more software.Another asked, "do either MapInfo or ESRI know their products or clients well enough to offer adequate total solutions packages? My experience is that they don't want to hassle with the details, so they recommend the little guys."

And so, to be a successful partner, the theory is to remain small and offer better service than can be reasonably performed by the larger, primary software vendor.But this goes against the grain of the entrepreneurial spirit and the natural tendency to want to grow in success and profit.It is, of course, the same problem that the major GIS software vendors have.How do they grow? Do they cannibalize the sales of their smaller partners or offer something the smaller companies cannot like enterprise solutions?

Greg Bazhaw, a planner with the Santa Clara County (CA) Planning Office, offered this caution about specialization versus the temptation to be an all-inclusive, total solution provider:

  • If a business partner focuses on services, you should get better services.
  • If a business partner focuses on hardware, you should get better machines.
  • If a business partner focuses on data, you should get better quality data, and...
  • If a business focuses on software, you should get better quality software free of undocumented features.
  • If you're a company that provides all of these services, a turnkey, you will know a little about everything, but not excel in any one component."

But, I think the relationship between vendor and partner was succinctly summed by Wayne Staats, president of Information Solutions, LLC (Milwaukee, WI), an Intergraph business partner, as well as serving as president of Intergraph's International Graphic User's Group (IGUG) for many years:

"When a true "partnership" between the supplier and the Channel exists, both entities excel and the client benefits (and purchases more goods and services).When a poor relationship exists, no one benefits.Few of the suppliers have adequate infrastructures to deal with the smaller clients on a service basis.They want all the big accounts, but don't have the "feet on the street" or the relationships to do good jobs for the smaller guys.They end up serving the client in a mediocre way.After all, unless they are willing to hire all the Channel members, how can a supplier expect to understand the needs of all the smaller entities and develop the close ties that already exist through the Channel? I am aware of a few suppliers who have one or two sales people and an equal number of support people covering as many as five or six entire States!! And, if the suppliers don't share a few of the "cherries" with Channel members, they will kill them off (the Channel that is) gradually and lose the contacts that already exist.Everyone wants to be the recipient of the latest "get rich quick" scheme.If they only understood how rare those schemes are, perhaps powerful partnerships would be more prevalent and everyone would be ahead.Greed (or maybe it is desperation) will eventually hurt the entire industry."

Next week, we'll get the major software vendor's point of view and continue the discussion from other business partners.

Published Thursday, February 14th, 2002

Written by Joe Francica

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