Do Technology Providers Really Understand The Ecosystem Concept and Its Impact?

For several years now, analysts and industry observers have highlighted the growing importance of ecosystems in technology innovation, go-to-market (GTM), value creation, and customer success. However, many technology providers still equate the ecosystem concept solely with their collection of ISVs, SIs, VARs, and MSPs. This limited understanding of ecosystem dynamics is driven by a decades-old “vendor-centric” GTM approach that handicaps technology providers’ ability to transform their business and create value. A modernized GTM demands that technology providers balance multiple, overlapping ecosystems.

Different types of ecosystems are driving disruption and impacting value chains across technology innovation, delivery, management and consumption. We’ve all seen partner roles morph and hybridize as ISVs, Systems Integrators and VARs adopt elements of each other’s business model. At the same time, partners are building their own partner ecosystems in order to deliver on customer innovation and digital transformation needs. And customers are proactively building their own ecosystems, acting as partners and even taking on commercial aggregation roles. Last year, an Oxford Economics study found that CIOs are strategically leveraging Digital Business Ecosystems because they drive competitive advantages in key areas such as supply chain flexibility, understanding of markets (2:1), and improving readiness to deal with regulation.

In response to this disruption and growing complexity, technology providers need to rethink their approach and pivot:

  • From an old vendor-centric GTM that is top-down, large-vendor-centric, stand-alone, feature-function oriented with products sold through a ‘distribution’ channel.

  • To a new ecosystem-centric GTM that is customer-driven, interconnected, innovation-oriented, with solutions linked to cloud platforms and sold through marketplaces.

This won’t be simple and easy to do. Technology providers going to market in today’s ecosystem-based marketplace have a much more complex task than in previous years. Not only do they need to align with shifting partner business models, they need to extend their notion of partnerships to include the diverse set of organizations that are driving innovation for existing and targeted customers and partners.

We have some ideas on how vendors can navigate this complexity. Here are 3 best practices to consider:

  1. Start by becoming more ecosystem ‘aware’. Instead of focusing solely on your own offerings and the partners that help you GTM today, extend your understanding to include how your customers and partners are defining and leveraging ecosystems to create value and drive new innovation. In just the last 10 years, the number of ISVs has expanded by 15x! Proactive awareness about the disruptive, competitive innovation that your customers and partners are exploring will help your organization turn threats to your business into value creation and competitive advantage.

  2. Engage with your customers, partners, and others to gather regular intelligence on shifting roles and value creation ‘hubs’. Most companies do not systematically collect data on trends in their customer and partner ecosystems beyond their immediate GTM focus. Ecosystem orchestration tools like Crossbeam and Vation, among others, can help you gather intelligence, build processes, and create a foundation for value creation and strategic advantage.

  3. Act Programmatically. Take action consistently and systematically rather than acting on an ad hoc basis:

  • Gather Intelligence and build programs to understand and respond to changing customer and partner roles and sources of innovation beyond your company echo chamber.

  • Relate and proactively market your company’s value proposition and positioning to include customers’ and partners’ ecosystem priorities.

  • Analyze the threats and opportunities associated as part of your regular strategic planning cadence in a more holistic way across products, marketing, sales and partnering.

  • Plan, engage, and take action based on opportunities for value creation, competitive advantage, and growth across your entire end-to-end ecosystem.

Drop me a line if you’d like to learn more about the big picture and how to get started, build your ecosystem intelligence or take programmatic action.

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