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The Building Blocks for an XaaS Partner Framework

Anne McClelland
Anne McClelland Member | Guru ✭✭✭✭✭
edited July 2020 in Revenue Growth

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  • StevenForth
    StevenForth Founding Partner | Expert ✭✭✭

    I like the notion of a Partner Framework and am looking forward to this. My question(s) ...

    What are the best formal measures for designing value exchange between the partners? What is the taxonomy for the types of value exchanged? How does one manage the case where the value exchanged between two partners is greater than the value created for the company organizing the partner framework? Does this then become an opportunity to build a marketplace?

  • Christine Sei
    Christine Sei Founding Member | Scholar ✭✭

    Thanks Anne! We have a tried and true model by which to measure partner performance for transactional selling activities. What are your recommendations for short & long-term performance metrics (as part of partner management) as we grow our XaaS offerings?

  • Anne McClelland
    Anne McClelland Member | Guru ✭✭✭✭✭

    @Christine Sei - thank you for your question and good to hear from you! I answered it on the webinar but I'll add some more info here... Of course in the traditional, transactional partner realm, we measure our partners' success in typically pure revenue terms, so revenue (in a sell through sense) per year, per quarter, per product, per geography, etc. and we also focused on new logos and partners sales of strategic products that we were promoting through various SPIFs, incentives, etc..

    In SaaS - "as a Service" models, we turn our focus to Annual Contract Value (ACV), Total Contract Value (TCV), Low churn, Upsell / Cross sell revenue off the ARR or growth of ACV yr over yr and Renewal revenue that is consistent (i.e., no "down-sell" and timely). Additionally for partners you can measure adoption growth through however you measure adoption (be that number of subscriptions or number of users / seats, etc.).

    We use the revenue waterfall to have this discussion with members:

  • Anne McClelland
    Anne McClelland Member | Guru ✭✭✭✭✭

    Hello @Steven Forth - sorry I didn't get to your question in the webinar on Wednesday. These are great questions and lots of depth there for sure.

    Ideally the ultimate desire with an ecosystem is to have one that is engaged and energized around the vendor's offering as the "platform" or as I talked about in my TSW Live! presentation, having it become the "flywheel" of engagement for a continually spinning, evolving ecosystem that can exchange value with the vendor and with each other.

    I don't believe that there is a negative aspect to having loads of partner-to-partner engagement and value exchange, (maybe that's because I spent a chunk of my career in the open source arena), I believe it is "all net positive."

    Now ideally the partner-to-partner engagement causes more consumption of the vendor platform as a natural consequence of the engagement, but I suppose its not guaranteed. I have personally managed ecosystems where I have seen my partners acquire other partners in my ecosystem, and typically this is for the greater good of what customers need from partners in their pursuit of a fully integrated holistic solution vs. having to cobble together piece-parts.

    Now you ask about Marketplaces specifically, and I would say that Marketplaces are a good way to have a window in the virtual world to what you are doing from an ecosystem partnership perspective, but that is not the only way to do so. Other ways can be around Developer Communities and/or PRM portals with "intranet" functionality to allow and encourage that partner-to-partner engagement.

    Obviously face-to-face would be fantastic, but not possible in today's times!