Partnering Pays

By Jessica Davis  |  Print this article Print


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VARs that work with other VARs make more money.

VARs that work together make more money.

That's according to a new survey of members of the International Association of Microsoft Certified Partners, conducted by market research firm IDC, that looked at partner-to-partner collaborations and found a key trend among VARs growing revenue—they collaborate.

"There's a whole body of research around network theory, and Metcalfe's Law—the notion of being able to increase value as you increase the number of nodes in a network," said Stephen Graham, group vice president for IDC's software business strategies group. "We started thinking about how that applies in a partner context and what that mean in terms of partner initiatives."

Key findings of the survey included:
  • IAMCP partners engaged in a total of $6.8 billion in partner-to-partner transaction activity during 2006.
  • Small and medium-sized partners accounted for 47 percent of the aggregate value for all partner-to-partner transactions.
  • IAMCP partners with a "high commitment" to partner-to-partner as a business strategy (those where partner-to-partner accounts for more than 30 percent of revenue) reported average 2006 revenue growth of 23.1 percent, while the total IAMCP membership reported 18.2 percent.

Graham said IDC plans to continue to work with IAMCP to learn more about the evolving trend and its specific cost and profitability models.

"Large vendors have encouraged partners to work together for years," Graham said. "What is changing is the partners themselves are starting to pick up the ball and run with it. Now it is less about vendors having to broker relationships to force things to happen. Partners themselves are becoming more proponents."

Partners see collaborating with other partners as a way to expand their businesses and perhaps work in new geographies, Graham said.

But the trend is one that is evolving, and Graham said that IDC also plans to take the research beyond IAMCP, admitting that partners who are members of that group are more likely to engage in collaboration already and understand the value of it to their top lines.

"This trend is really going to have a huge impact on partners themselves," he said. "It's not up to the vendors to create this. A really interesting thing here is that the vendors themselves need to figure out how they deal with this reality." IDC named the rise of the peer network among VARs as one of its top predictions for 2007.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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