In the Enterprise Software Industry, the Software companies are promoting more and more a Partner to Partner Collaboration. This topic is mentioned in hallway conversations and board-meetings, as alliances between competitors is not a trend but a puzzle that needs to be solved.
The thing is, that it might be just one piece of a bigger puzzle.
Technology has had a big impact in business for many years, but now companies need to update continuously their business model, or they will be pushed out of the market. The irony is that the companies that support the digital transformation of other companies, the Enterprise Software Service Providers (Partners), also need to update dramatically their own business model.
The revenue model of Partners changed when the industry moved to a Software as a Service model. A big impact was on cash flow, as the licensing revenue moved from an upfront income to a 3-year monthly subscription and shorter contracts on professional services.
The Enterprise Software is now more broader as everything is connected, and new technologies keep appearing, making it harder keep up with the pace and cover end-to-end customer requirements.
And with this growth, talent is scarce and global, so there is now a need to leverage different geographies.
The good news according to Gartner 2017 Research, is that organizations have increased their spending on enterprise software “because of the growing availability of SaaS-based solutions, which encourage new adoption and spending across many subcategories that now are connected to the company”.
This trend continues in 2019 as the Enterprise Application is expected to lead every segment with an expected 10.3% annual growth, above the 2.6% average (Gartner IT Global Spending’2018).
IDC Research estimated that the Salesforce Economy will create more than $1 Trillion in New Business Revenues and 4.2 Million Jobs between 2019 and 2024.
IDC also estimates that the SAP Partner Economy will double by 2024.