• August 12, 2003
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Partnership Happy

Gartner today announced the results of a recent study that maintains IT services partnerships are on the rise. The study, "Selling IT Services via Other IT Services Providers," examines the degree of IT services sales activity via other IT services companies. The survey of 40 IT services companies, conducted in May, states that 80 percent of the participating companies are currently selling their IT services offerings either to, through, or with other IT services providers. According to Michael Haines, principal analyst for Gartner, selling to partners refers to one service provider selling to another for its own internal use. Selling through partners is the traditional channel model where a vendor or service provider sells maintenance or support services through value added resellers, solutions providers, or original equipment manufacturers. Selling with partners refers to the traditional alliance or strategic partnership model between two vendors. These alliances have caught on primarily to meet the changing dynamics of customer demand in today's unstable business environment, according to Gartner. "Economic challenges and the need to penetrate new markets are serving as catalysts for IT services providers to seriously investigate and consider all possible strategies for growth in their businesses," Haines said in a statement. "One of the strategies is to leverage other IT services companies, either as a target market or as a conduit to new markets." Additionally, customers are growing less tolerant of multiple relationships. "Most of the buy side companies [end customers], we continue to hear, are trying to reduce the number of relationships they have with vendors as a whole, especially in the IT space. The classic case of chief information officers getting hundreds of calls from various vendors is going away--they simply don't have the time to deal with so many companies," Haines says. Instead, he adds, buy side companies are looking to deal with fewer solutions providers that can also act as brokers for additional IT services. The report maintains that this year, participating IT services providers expect to sell 26 percent of their services via other IT services providers. Gartner predicts that this buying segment will account for 40 percent of IT services sales by 2006. This bodes well for partner relationship management solutions. "PRM solutions are more important than ever, as they are going to be even more critical in building optimal relationships," Haines says.
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