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ZDNet: Thinking small: Why ecosystems are critical to your business

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May 23, 2016

By Paul Greenberg

Mini ecosystems might be the way to go in the current tech environment for some of the smaller tech vendors out there. There is power in complementary offerings.

FIRST, AN ANNOUNCEMENT

I have asked Harvard Business Press and received (thank you very much) a big extension on writing my book on customer engagement: “The Commonwealth of Self Interest: Customer Engagement, Business Benefit” so that it will be coming out most likely in 2017 — or at least the manuscript will be done in mid-2017. They are a generous publisher and have been a joy to work with.

What this allows me to do is to ask you all something now — and the window is the next four weeks for this — if you have a case study on customer engagement that you think merits inclusion in this book, please contact me with a short summary paragraph of what it is before June 15, 2016. If it makes sense, I’ll contact you with some details and we can proceed if all of it works for both of us. If it doesn’t make sense, I’ll still let you know that it didn’t. Since there is a longer case study per chapter, it’s first come first serve, so the faster you contact me the better off you are. Be specific. It doesn’t have to be about your company. It can be a customer of your company. Please email me at paul-greenberg3@the56group.com.

OK, enough for announcements. I have this idea I want to run by you…

MINI-ECOSYSTEMS? WHAT THE…?

As far as I’m concerned, in order for a growing technology company to succeed — especially in the B2B universe (a rapidly less differentiated one from B2C than it has been in the past) — a technology company (though this could apply to any company) needs to think in ecosystems.

What I mean:

  1. “Ecosystem thinking” means that you are working from the standpoint of the totality of what your customer needs aligned with what they can expect from you. That means that you have worked out, from end to end, what that is.
  2. Say you are a technology company that provides sales force automation at a fairly simple level — and handle things such as account, contact, lead, opportunity, and pipeline management. Say, furthermore, as you grow and as your customer base grows, that your customers are asking for analytics, sales/competitive intelligence, proscriptive thinking, knowledge of what their prospects digital footprints etc. and you don’t provide that. Then you make decisions on which of those things you want to incorporate into your offering overall.
  3. Given what you already provide, you figure out what you need to incorporate into the offering. Then, you figure out what you are willing to build yourself. Based on that, you figure out which possible partners or even acquisitions can provide those things that you either can’t or don’t want to build.
  4. You then establish a go-to-market strategy with those partners who complement your offering which then encompasses that ecosystem that you know that is the optimal one for your existing and potentially future customers.
  5. You then develop an outcomes-based narrative that shows customers how the sales technology ecosystem that you can provide handles their needs.

What makes this more than just a fascinating exercise is customer demand. The customer is no longer just looking for good products and services, but also looking for tools and consumable experiences. They are also making sure that the service levels of the company are something that they can personally benefit from and thus it has caused shifts in their expectations of companies. If the company provides sales related products they need to know that the company provides them with the products/services/tools etc that they need, not that everyone needs. There is a lot more to what I mean by this, but for now, please take it on faith so I don’t have to write a gigantic blog post.

Given this environment, the smaller tech vendors, especially in customer facing technology companies, have tended to gravitate to the largest providers i.e. Microsoft, SAP, Salesforce and Oracle, who provide them with the greatest opportunity for participation in an ecosystem or at least, a marketplace. The initial stage of participation has typically been integration of the technology with the larger providers’ various offerings. So, say, Lattice Engines integrates with Salesforce. Those are technical integrations and don’t necessarily involve or require thinking about the ecosystem, but certainly can support the ecosystem.

But when ecosystem thinking comes into play is for example, when Thunderhead, the customer journey technology, integrates across Dynamics CRM and the two companies go to market together or when InsideView becomes an embedded part of Microsoft’s offering — meaning they are just simply the offering (OEM). Sales teams are trained in how to sell these partner products and, if all is right with the ecosystem, compensated for the sales. To put it in slightly specious terms, technology integration is vertical (up and down) and ecosystem integration is horizontal (across)

Along with the big four, other companies are beginning to think in terms of ecosystems also. Adobe, at their recent Digital Marketing Summit, announced that they are knitting their Marketing Cloud, Creative Cloud and Document Cloud into a single platform — a whole cloth that can be used to cut out different applications. In conjunction with this, they are working on what they called “an open ecosystem” that would be reflected in their Line of Business Marketplace — ecosystem partners who fill the gaps that Adobe can’t fill. They are go to market (GTM) partners and Adobe’s sales teams will learn how to sell them and will be compensated for the sales. The narrative is in the works. Adobe is planning on making the big four a big five of ecosystems.

But there is one other play here. A mini-ecosystem. Two examples:

Imagine a series of sales optimization/enablement/acceleration players combining their complementary offerings to go to market together with a powerful sales optimization solution that exceeds the power of any one of them; i.e. PROS meets InsideView meets Clearslide meets…. I’m not suggesting this one as a real one, because that particular combination might actually be awkward. Just the idea of three different companies that are sales value adds working together for a powerful offering that doesn’t require a particular larger ecosystem to incubate necessary. They can be larger ecosystem agnostic but in the case of this one, it does need a Salesforce automation-related parent to be of real value.

Imagine a series with this story: “Customers participate in a community and as they do so, their journey through the community and outside the community is not only tracked but intelligence on the customer is gathered. Then based on all of that, and adding all the structured and unstructured data gathered, a highly personalized set of interactions can be crafted to work with that customer even if the name isn’t known.” The value to customers of the realization of this scenario is ginormous. There are several companies out there who if they combine can realize this narrative.

These are mini-ecosystems. They are companies that provide complementary technologies that strengthen their ability as a unit to go to market and differentiate themselves in that market. Sometimes they can stand alone. Sometimes they still need a specific application or solution to embed themselves in. But they don’t need a specific ecosystem. They are an ecosystem, albeit a smaller one. I think there is a lot of opportunity out there among the smaller vendors to unite around this principle.

There is one that I got a press release about not too long ago but I can’t find the press release and I didn’t know the company that issued the press release. What I do remember clearly (sadly, the only thing I remember clearly) is that this company whose name I can’t remember was in a GTM relationship with InsideView and two other unnamed (I’m not just forgetting here) companies. This four company alliance was designed to provide a complementary set of capabilities that made each of them stronger and all of them better together and allowed them to some extent in any case, pool resources. Meaning, a mini-ecosystem. This was the first sign that it was more than a good idea and was becoming something that companies were taking action on.

Exciting possibilities I think. There is one other in the works that I think has huge possibilities. Do you know of any others out there that I might be missing? Let me know. This is going to be one of my pushes in the next several months. To me, fundamentally, for technology companies to make their offerings worth anything to contemporary customers, ecosystem thinking is required — and execution needed.

This mini-ecosystem is something on my mind at the moment because I think it has some chops if it is realized in the right way. Please let me know what you think. I could be off on what I’m thinking. I’ve never claimed to be the Word or speak the gospel. These are my opinions and that’s all they are.

I want the industry to succeed. I want my friends in this industry (well, actually all my friends) to have comfortable lives of their choosing. It’s a huge market and the room for all companies to do well in it is there but it is one, like anything else, that has to adjust to a changing world. I’m trying to do my part – for better or worse.

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