Software Ecosystems Are Becoming Critical Business Infrastructure
But then what do I mean by ecosystem? If done right, it means that you are defining the bulk of your customers’ end-to-end needs, aligning those needs with what you can actually deliver, and managing expectations of your customers. It means you’re defining what you can provide for those customers, but given that, you know what holes remain and what business partners can provide. You work with those partners in a strategic sense to provide the offering that your customers want. The results is a solid portfolio of offerings that support the outcomes that many of your potential customers desire, putting you in a position to win new opportunities and continue to be successful with prospects that have become customers.
But ecosystems take work. They don’t just happen because you decide you want one or you’ve found a couple of partners. Typically, there is a parent company at the center of the ecosystem, and the ecosystem, while still revolving around the parent company, requires strategic, go-to-market relationships among multiple companies that provide complementary offerings. There has to be governance in place for the ecosystem (which can do well with a named entity as an umbrella for it), with mutually agreed upon rules. None of this is easy.
Let’s look at an example, a small ecosystem that could serve as a paradigm for building one. It’s called Project Unite and it is run by Matt Bray, from Xactly—one of the sales compensation technology market leaders.
Here’s what makes it paradigmatic:
1. It has a parent—Xactly.
2. It has a central thread. It is based on Salesforce deployments and focuses on aligning sales and marketing for them, from a process-centric standpoint.
3. It has culturally aligned partners. Each partner of Project Unite—e.g., SpringCM, DocuSign, Steelbrick—was chosen by Xactly to participate; the purpose of the group is to create a seamless integration of each vendor’s product within Salesforce. Keep in mind, this is Xactly’s vision of sales and marketing alignment, not necessarily anyone else’s.
4. It has governance. There are specific rules and processes in place that are standard to the entire group and formally accepted by Project Unite members. They supersede any individual agreement that may exist between the partners—but only within the context of Project Unite business.
5. Each partner knows in-depth what the other partner offers. That goes without saying. That means that the people involved in each company know how to handle the offerings of the others. (I’m not sure if that means they all sell each other’s products.)
6. There is a practice devoted to ecosystem sales. There is a mid-level consultancy committed to developing a Project Unite practice that would sell only the entirety of the offering—though it might of course lead to sales of just one of the products, not all. But it leads with Project Unite as a holistic offering. Having a devoted sales practice is important to the health and evolution of the ecosystem.
7. There is an overarching “corporate” narrative. This means there is a Project Unite story: We help you enrich your Salesforce deployment and get the results you want by providing you with the enablers you need to align sales and marketing. This narrative supersedes any single component part of the ecosystem.
So there you have it, folks. Actual ecosystems are nascent, but ecosystem thinking is becoming an endemic part of the strategic thinking of many companies—even more so as I write this. It should be. Success in the 21st century will be defined by the ability of companies to provide support for the outcomes their potential customers are looking for. If they can’t, they aren’t likely to succeed. If they can—well, the world is their ecosystem.
Paul Greenberg is the managing principal of The 56 Group, a customer strategy company. He is also the author of CRM at the Speed of Light, which is in nine languages and is currently in its fourth edition. He is the author of the upcoming Commonwealth of Self Interest, to be published later in 2016.