GERMAN VERSION

Motivation


Today there are only a few sources in the literature on the forms of cooperation between software companies and on the objectives, structure and forms of cooperation in so-called ecosystems (like resell, revenue share or referral.). For software companies, this is a crucial problem, since the decision to join or to create an ecosystem or to partner is not easy. Just a few books on this topic have been published so far. Here is a selection:

Forms of cooperation in the software industry


The forms of cooperation between software companies still cannot be found in the literature. From a pragmatic point of view, following forms can be found:Resell, Revenue Share, Referral Program, OEM, Certified Solution, Development Cooperation. The following table shows an overview of the various forms present in an English book, which is currently under preparation is thoroughly investigated and will be presented:

 

Resell

Rev Share to PARTNER

Referral Program

Outbound OEM

Certified Solution

Dev Cooperation

Who ships?

PARTNER

You

PARTNER

You

You

You

Pricing

PARTNER

You

PARTNER

You

You

You

Branding

Co- or PARTNER branded

No co-branding

PARTNER

No co-branding

No co-branding

No co-branding

IP

Separation of IP, no joint IP

Separation of IP, no joint IP

PARTNER

PARTNER owns platform, you own application

Separation of IP, no joint IP

Separation of IP, no joint IP

Rev booking

Sold on PARTNER paper

Sold on your paper

Sold on PARTNER paper

Sold on your paper

Sold on your paper

Sold on your paper

Cust. Control

PARTNER

Jointly

PARTNER

You

You

You

GTM

PARTNER

Jointly

PARTNER

You

You

You

Exclusivity

Yes and no

 

 

 

 

 

QA by PARTNER

Yes

Yes

Yes

Yes

No

No

Support by

PARTNER

You

Yes

You support

You

You


Referral

Referral means that the software vendor has outsourced lead generation to a partner company. The partner company creates the lead, passes it back to the software vendor. The software vendor pays a referral fee to the partner for a qualified lead and/or a closed deal with the lead.

Referrals are very popular, can be used as a one-time or repetitive form of cooperation between two companies. Advantages of referral are easy creation, low impact on both organizations, partner and software vendor, and limited risk.



Revenue share

The software vendor endorses the product of the revenue share partner. if the customer buys the partner´s product, the software vendor gets a share of the partner´s revenue.

Revenue share partnerships are also popular in the software industry and are usually used as door opener into other companies´ customers. Revenue share makes sense if the product offerings of the partner and software vendor are not competitive, but complementing.

Advantages of Revenue share are: software vendor participates in revenue that is generated by other companies, limited cost for software vendor for endorsing other vendor since cost of sales stays with the revenue share partner.



Resell

Products of the software vendor are supplied to a resell partner. The partner sells the software vendor´s products to the customer.

This is a close relationship between a software vendor and a resell partner.


More partner models, more details in  this book


I just published a new book that investigates the forms of cooperation in the software industry and the goals and structures of software ecosystems. It is called "Profit from Software Ecosystems: Business models, Ecosystems and partnerships in the Software Industry" .

This is THE reference if you are a professional in the software industry and you are considering to leverage ecosystems and partnerships for your success.


CLICK TO BUY Profit from Software Ecosystems

In its no-nonsense approach it reveals hidden goals of large software vendors with their ecosystems, tells  you how to create your own ecosysten or how you can be successful in another software vendor´s ecosystem. With examples from Microsoft´s and SAP´s ecosystem it is a great source of knowledge.

If you are interested, just order the book at amazon.

More business models

On another website, you will find an overview of software business models for your convenience.

OEM

in an OEM scenario the software vendor provides software to the software partner. The software partner sells the OEM software as part of his solution. Usually, the software partner charges no price for the OEM software, but for his own solution. This is the key difference to a resell.


Certified solutions

Customers are looking for minimizing their integration cost in a heterogeneous landscape of software solutions. To proof that the integration between two software solution exists and has some level of quality, software vendors are offering certification programs. Certification allows competition between software partners to keep prices low while certification increases integration quality.




Video on OEM, resell etc.



Book on the SAP ecosystem

For the SAP ecosystem, Ralf Meyer´s book is a perfect source of information. Here is the link to the book:


Continue to Mergers and Acquisitions in the software industry

or choose another hot topic on this site

Business Models in the software industry and

Mergers and Acquisitions in the software industry

Software Ecosystems

Partnerships

IP Management



(C) Dr. Karl Popp 2017


Google
Dr. Karl Popp Profit from software ecosystem book This book is your GPS for the software industry. $62.90 Amazon In stock! Order now!