Why are Strategic Partnerships Critical?
We have entered a new era in the business world— the era of strategic partnerships. While partnerships have been happening for decades, there has been a boom over the last 5 years. Direct competitors have been partnering and collaborating for a mutual benefit. Alliances we thought we would never see, are happening. Synergy across different brands has become necessary. This trend will continue to grow in the coming years so you better hop on board while you can!
Successful companies look for continuous growth. They want to innovate and expand their business into different markets. Some will eventually hit a peak with their sales and/or user base and struggle to grow further. They still want to remain among the “cool” companies. So how can those companies continue to grow and stay “cool”? They form strategic partnerships with other successful companies to help scale their business.
Best of Breed Partnerships
An example of a strategic partnership in the technology industry is the IBM and Box partnership. This combines the “best of breed” in technology to be “better together”. Bringing IBM Watson’s AI platform to Box unlocks many growth opportunities for both sides. This benefits Box and IBM clients who are looking to improve their business processes with AI. Box is better with Watson AI, further differentiating themselves as a leader in the cloud content management space. Likewise, IBM is better with Box’s content management platform’s added capabilities. This partnership allows Box and IBM to create powerful solutions powered by both leading technologies.
Partnerships in Competing Organizations
There is more to partnerships. It’s important to note that to maximize the scaling of your platform, you need to appeal to a broader audience. This means partnering with one or more companies in your competing market. A great example of this is in the video game industry. Microsoft makes the Xbox console and their major competitor, Sony, makes the Playstation console. These two companies have battled head to head in the video game market for over 15 years. Recently, they partnered to create new cloud-based solution and gaming experiences. They are combining the best of both platforms to create new offerings.
Microsoft also has close relationships with video game juggernaut, Nintendo. Nintendo has produced the most innovative video game platforms for the last 35+ years. The Nintendo Switch is their most recent console. At the end of the day, it is competing with Microsoft’s Xbox and Sony’s Playstation.
Microsoft showed interest to collaborate with Nintendo. They wanted to expand their outreach with Nintendo consumers. Microsoft has released their own games, such as Minecraft, on the Nintendo platform. Microsoft also made their online gaming service available on the Nintendo Switch. Their goal is to cross-pollinate on the same game from two different platforms. It is expected that these two companies will collaborate more in the future.
Microsoft’s approach with Sony and Nintendo is a great example of an organization using partnerships to maximize their outreach in the market. Keep in mind the goal for these partnerships. Both sides should mutually benefit from the collaboration. If only one side is benefitting from the partnership, then reassessment is likely needed.
Partnerships That Just Make Sense
Another reason for strategic partnerships is to do what makes sense. Building all your required technology in-house is unrealistic for most organizations. It is expensive and resource intensive. Why reinvent the wheel when it’s already available? Assuming it costs less, why not partner with another vendor to have them handle the product development and support? It just makes sense.
An important factor for survival and growth in the business world is using the “best of breed” technology stack. Leveraging one company for all your technology will likely not meet all your needs. Your goals will require using many vendors to meet those needs across the board.Using that “best of breed” stack ensures you run your business most efficiently to enhance your products, services and value. Here are some examples of “best of breed” companies and their services:
- IBM – provides world-class cloud hosting for your web applications along with a plethora of services. IBM Cloud provides leading Data and AI services such as Watson Assistant and Watson Studio to train and build machine learning models for AI-powered applications
- Slack – provides a modern, collaborative platform to connect and communicate with your teams, optimizes your workflow, meetings and more.
- Box – provides enterprise cloud content management for your data as well as numerous tools and integrations to help you work faster
- Salesforce – provides a complete CRM platform to manage your customer information for sales opportunities, customer service cases and more.
- GitHub – provides a complete platform to help developers collaborate together to write better code, manage issues, projects and more.
So ask yourself…Is your organization partnering to increase outreach to scale their growth? Are you using the best of breed technology?