If you’ve read anything from me in the past, you will know that I worked at Microsoft and was espousing the virtues of business model evolution with the cloud, the enormous opportunities, and the inherent challenges for partners to move from transaction to services to IP as articulated in IDC’s Successful Cloud Partners 2.0. Since that time, you may have also read in my last blog that I decided to put my money where my mouth is and join a fast growing and highly profitable partner (Nintex). Since the time of my arrival, I have learned a lot about the channel and about what I firmly believe the foundation for success is for not only ISVs like Nintex, but other services-based partners that are struggling to build cloud capabilities, penetrate the growing LOB decision-maker market, and ultimately lead with business value and IP vs. a value proposition based on IT/infrastructure and billable services capacity.
Partner models must change to meet the challenges
The business model challenges remain largely the same. As stated in previous blogs, partners that are only focused on points and margin or transactional models are being squeezed; project-based SIs are experiencing challenges as IT budgets continue to flow into the hands of business decision makers; and more and more enterprises are moving to cloud-based models which take much of the traditional bread and butter off the table. It is now widely understood that partner models must change. Partners must deliver higher value services to the end customer, and as the budgets move more into OPEX and in the hands of the LOB decision makers vs. IT, that fact continues to ring alarm bells for many traditional players in the market. The challenge for partners is how to get ahead of the change vs. having the change get ahead of them.
What I have seen most recently is a blending of the business models in all directions. I have now seen pure transaction-based partners move into billable project-based and managed services. I have seen pure SIs now add transaction-based services to ensure more account control. And I have seen pure SIs either buy or build IP to take to market. Of course, to do the latter typically means taking people off the billable bench, hiring developers, or sinking real dollars into IP OEM based relationships. That is not always possible for partners and many times requires big leaps of faith and a lot of capital costs.
What are the right next steps to stay ahead?
So, do partners need to hire expensive developers, build bespoke horizontal or vertical solutions, deliver a roadmap, and constantly work hard to stay ahead of the innovation curve? Can they even compete in an ever-growing competitive ISV market? Who will come from behind and eat their lunch? Also, what does a services business or transactor give up when re-directing their focus toward becoming an ISV? Is there an easier way? What else is happening in the industry and where do the new emerging opportunities surface?
Are “low-code” solutions the future?
One industry trend that is becoming very interesting is around low-code solutions. Solutions that manifest to a customer or channel partner as something that is more pre-built, modular, and configurable vs. something that has to be built from scratch with heavy integration or development. Forrester analysts believe that low code is a potentially disruptive technology, especially in the BPM market (see Customer Obsession Set to Disrupt BPM Market in 2015, by Clay Richardson).
With low code, a partner can take a low-code solution, rapidly iterate a unique business solution in days or weeks, and show LOB value quickly and with little to no custom coding. They can then get into the market fast, configure on-the-go as things change, and re-publish in days while leveraging their incredible business domain knowledge built up over the years from previous projects. The alternative, which is procuring heavy custom development, means a lot of capital costs and maintenance either for a company looking to move from services into being an ISV or for a customer looking for a custom-coded project. Of course, there is typically no such thing as “no code” unless building low-code apps without a lot of integration, but getting to 95% no code is very doable today and will be even more evolved in the near future.
My colleagues at Nintex take the notion of low code for granted as it’s become a fairly emerging topic in the industry. We’ve been doing low-code for years at Nintex. It was simply deemed the right strategic model to solve business process automation problems, and it breaks away from the legacy of traditional BPM. We have over 1,000 partners benefiting from that vision today, leading with business value, agility, and rapid solution development on hybrid environments, in the cloud, and on mobile devices. It is a foundation for success in the cloud for us and for those partners around us.
I feel strongly that partners need to consider how working with low-code solution providers can unlock their potential, propel their business model forward, and drive a profitable future business. However, make sure that the solution provider has truly high-quality low-code technology with a strong roadmap, ensure that they know how to partner with a good partner licensing model and have favorable channel terms, and make sure they don’t compete with you on billable services.
Vendors such as Microsoft clearly see this future and I believe must be investing heavily in this direction. Just look at project Siena. The vision is well thought out, it is clear, and although there may be some skeptics on Microsoft’s ability to deliver real enterprise value with low-code apps on mobile devices and the cloud, their strong and sophisticated partner ecosystem will most likely fill the gaps and help establish Siena as the low-code app ecosystem of the future. Other vendors are also poised to make progress against this vision, and I have no doubt that Microsoft’s competitors will be visible in a similar way.
For more information about Nintex, go to http://nintex.com.