The importance of partnerships in IT

Joe Schramm, VP of alliances and channels, comes to BigPanda with the goal of forging mutually beneficial partnerships that will help BigPanda scale while also delivering results to customers and clients. Schramm emphasizes communication with partners that creates collaborative, long-term relationships. His philosophy focuses on finding partners with similar priorities and goals who will build a meaningful business relationship with BigPanda. Joe’s prior experience includes working as head of Americas partner sales for Sailpoint, vice president of strategic partners for BeyondTrust and vice president of alliances and channels for Trusona.

Read on for Schramm’s views on the importance of partnering and what drives partnerships:

Q: How can a company like BigPanda truly be a partner first? How do companies sometimes fall short in this area?

A: It all starts with company culture. Starting with executive leadership (top-down) and across all functional areas (line of business owners). It is important to have a clearly defined mission of what “partner first” means. Once you have buy-in, you must look closely at all aspects of partner interaction and challenge yourself to do it better than the competition. This must be in the form of actions, not just words. I think a lot of companies fall short because they talk about being “partner first” but their actions fail to match their words.  

Q: Can you talk about the role partners play in scaling and how important it is for a company like BigPanda to have strong partners?

A: Partners are critical in helping us scale and accelerate our growth. We need partners who are the trusted advisors to their customers in the area of digital transformation, ITOps, where we are focused. Organizations are looking for economies of scale, automation and cost reduction. We play a vital role in that, and our partners can help not only educate the market on the art of the possible but also in delivering tangible business value to our mutual customers through the adoption of AIOps.

Q: When we talk about a consumption model, how can a company like BigPanda ensure success for themselves and their partners? What are some of the most important factors to consider?

A: What I like most about BigPanda’s consumption model is that organizations can adopt our solutions incrementally. This allows us to get started with a customer quickly and without putting all the financial risk on the customer. This creates opportunities for shorter sales cycles—which benefits our partners and, ultimately, our mutual customers.

Q: What are some of the differences between a consumption model and the more traditional way of doing business where products (software, hardware) are sold?

A: The biggest difference is the removal of friction. In the traditional software model, there is a lot of friction. The procurement and deployment of hardware, configuration and implementation of the software, testing and managing upgrades are all time-consuming, expensive and require a fair amount of work. They also result in a significant amount of risk that is largely the customer’s burden. In addition, this model does not support the modern agility model that organizations need to be competitive in today’s business environment. 

A software as a service (SaaS)-based consumption model such as ours allows organizations to subscribe to our capabilities. Provisioning of the solution happens immediately after the purchase. Customers can purchase only what they believe they will consume out of the gate. They can scale up from there as needed. Therefore, the cost line moves with the benefit line, allowing the customer to take on less risk. It also allows the customer to take advantage of additional capabilities when they are ready. 

Q: Can you discuss how important service is for a company like BigPanda in establishing strong partnerships? For example, BigPanda provides training for partners, including for sales, as well as ongoing support.

A: This is a very important area for a company like BigPanda. We want to be as relevant as possible to our partners. For many of our partners, they are very interested in capturing not only the margin on product resale but also implementation services for the solution itself. When I think about enablement and partner services, I think of it in a few ways: 

• Different personas – Sales reps, pre sales engineers, implementation engineers/consultants. It is critical to think through the proper training and certification for each person.
• Type of partner – Solution providers, consulting partners / systems integrators, distributors. What is the recommended enablement path for each?
• Ongoing partner support – What are the other things that we need to be doing beyond the formal enablement? For example, updated training on new modules. 

Q: What are some of the most important factors BigPanda evaluates before establishing a partnership with another company? Also, from the partner point of view, what factors should the partner consider?

A: For BigPanda, we are looking for three things:

• Focus – Is the partner strategically focused on the ITOps / Digital Transformation / Data Center / AIOps domain? We are looking for this to be the sole or a primary strategic focus of the partner.
• Market Alignment – Is the partner focused on the same set of customers as we are?
• Go-to-market strategy- Is the partner willing to invest in building a business with BigPanda? Do they have sales/presales capacity? Are they willing to be trained? Does the partner have a marketing engine? Are they willing to co-invest with us to generate new qualified opportunities?

For the partner, I think it is important that they look for and understand the following:

• Revenue – How do they make money with BigPanda? What are the discounts/margins on product resale? How are add-on deals and renewals handled? Is there an opportunity to capture implementation services? Can they work with BigPanda to create a joint offering that is differentiated in the market?
• Customer value – How can the partner drive tangible business value to their customer by partnering with BigPanda? What is BigPanda’s renewal and retention rate? How strong is our investment in and focus on customer success?
• Partner experience – What is the overall experience of working with BigPanda as a partner? What is our “readiness” to partner as an organization? How frictionless or easy are we to do business with?

Q: What makes for a perfect partner?

A: Assuming the partner matches up to the profile I described in the previous question, I would say it is the partner that wants to “lean in” with BigPanda to build a meaningful business with us. That would mean a willingness to sit down and develop a business plan inclusive of targets, plans to execute, etc. Ongoing quarterly business reviews that measure progress, determine course corrections, solve challenges and celebrate successes. In my experience, these are the best partners who, as a group, end up driving 80%+ of the partner business for the vendor while building a very significant, high-growth business for themselves.

Q: How can BigPanda tailor what they do to fit partner needs?

A: It all starts with listening. We need to engage our partners in meaningful dialog about what is working well and what needs to improve. Do we have gaps that we need to fill? Once we understand what the partners are looking for, we need to put a plan in place to fine tune our program. We need to clearly communicate our plans to our partners.

Q: In prior roles, you talked about how the ratio of product to services is changing for channel partners and that, where once the ratio was 90/10 or 80/20, it’s now driving more to 50/50 for some partners and distributors? Can you talk about that trend and what it means for a company like BigPanda?

A: This really speaks to some of the disruption we have been seeing in the channel over the last couple of years.

For traditional solution providers/resellers of any size, there is a need to pivot more toward services to provide more value to their customers. The customer not only wants to procure a solution from the provider, but they also want them to implement it and sometimes even manage it. So that is one driver of change to the product/services mix.

Private equity (PE) is another significant driver of change. PE firms are acquiring many mid-size and even larger national solutions providers. While focused on top-line growth, PE firms are also typically very focused on earnings. As a result, these solutions providers are aggressively building out services practices to help drive better overall margins. If I can make a 10-20% margin on the sale of a product but maybe a 35-40% margin on implementing that product, the blended margins are much more attractive.

The last driver I will mention is the mega cloud vendors such as AWS, Azure and GCP. We are seeing a lot of product companies coming out with private offers on one or more of these marketplaces. The mega-vendors are putting strong incentives in place for customers to procure from these marketplaces, as it can help them burn down their contractual spending commitments. This is yet another factor in why you are seeing traditional solutions providers focus more on services.

Learn more about becoming a BigPanda partner today.

To learn more about BigPanda partnerships, reach out to partnerships@bigpanda.io.