VARs Turn to Peer Networks

The trend, which has been building for several years, according to IDC analysts, has accelerated during the last year or two, most recently with the announcement by the International Association of Microsoft Certified Partners, an independent partner organization, of a new online community for software solution providers.

SoftwareBizExchange.com offers software business resources and expertise, according to the IAMCP, which announced the new community at the beginning of April. The site will include moderated discussion forums for networking and information sharing.

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"Partners are starting to see [that partner-to-partner networking] is a proactive opportunity rather than a reactive way to solve partner problems," said Darren Bibby, senior analyst covering global software sales channels for the Software Business Strategies Group at IDC.

What's happening, said Paul Edwards, program director of the software sales channel at IDC, is that partners are realizing they need other partners in order to compete at the solution level with bigger partners and with vendors.

"That's driving more organic partner-to-partner engagement," Edwards said. "It's all about complementary assets."

And that's one of the types of collaboration that the IAMCP is hoping to drive with its new SoftwareBizExchange.com site, according to Per Werngren, the organization's president.

"The essence of the IAMCP is to help build profitable connections among Microsoft partners around the world," Werngren said in a statement. "This site will play a key role in the IAMCP delivering on its mission."

"Over the last 3 years [the IAMCP has] seen an explosion in membership," said John F. Payes, president of the Canadian subsidiary of IAMCP and chairman of SoftwareBizExchange.com. Payes is also director of the Microsoft Global Alliance at Nakisa, an ISV based in Montreal. "Partners have found [that] networking has been very effective. There has been a dramatic change, more so in the last few years."

Over the last three years, worldwide IAMCP membership has quadrupled, Payes said, and in the United States membership has spread from just nine states to more than 40. European membership has grown by 1,700 percent, he said.

"Partners are working together more than before," he said. "And customers are expecting that. You can no longer rely on a single entity for all the answers. The new reality is to go to the marketplace and offer a joint solution."

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IAMCP is perhaps the largest independent partner network in existence today, according to IDC. But other, smaller organizations are just as effective, if not more so. For example, Bibby mentioned a small network of about five Microsoft partners in Arizona, each with a complementary specialty—one was a training company, another was a systems integrator and the others focused on different areas. Such a network allowed the partners to share leads and gain more business.

While partners may miss the funding or resources provided by vendor-run partner organizations, partners tend to prefer organizations not affiliated with specific vendors, because it allows them to work without being swayed in any particular direction, Edwards said.

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Vendors are encouraging such independent networking efforts, too. Such organizations could allow large vendors the possibility of managing groups instead of individuals, a less cumbersome and more efficient option, according to Edwards.

But the stakes will be higher for vendors once such partner networks take hold as a new way for vendors to manage channel programs, Bibby said. "If you are trying to recruit by groups of partners rather than individuals, you may get one big deal by recruiting just one partner and getting the whole group," he said. "But if you lose one, it's a bigger deal than just losing one partner."

Smaller vendors could also leverage the influence of such groups by using them to spread the word about their product. "They could grow a group of smaller partners and turn them into evangelists," Biddy said. "These partners could then spread the gospel of doing, say, security, the way a particular vendor does security."

And as more and more VARs take note of the value of partner-to-partner networking, others are looking to turn the demand for such networking into a new kind of business.

Xeequa is one example. The startup, based in Palo Alto, Calif., is looking to capitalize on the trend for partner-to-partner networking by providing an online infrastructure that enables partners to find each other and share business leads, much in the same way the professional networking site LinkedIn does. The company soft-launched its offering in January and currently is doing a pilot test of its service.

"Many partners collaborate with each other but there has been no mechanism out there to support this systematically or methodically," CEO Axel Schultze said. "With XeequaNet, we built a new technology that acts like a PBX between all parties. This many-to-many relationship model, actually a real network, connects all kinds of alliances, partners [and] influencers with each other."

The company is planning a second phase of its pilot in June.

"These social networks used to be considered fringe technologies but are now considered mainstream," Bibby said.

"A lot of younger folks who are coming into these businesses have grown up with the start of social networking online," Edwards said. "The younger generation will seek out similar types of experiences in the business world."

Editor's Note: This story was updated to include more information on the IAMCP.