News

Hidden Gold in Partner Organizations

• By Keith Ward
• June 13, 2007

According to a new study by market research firm IDC, partner-to-partner (P2P) transactions among members of the International Association of Microsoft Certified Partners (IAMCP) association accounted for almost $7 billion in revenue in 2006. Small and medium IAMCP partners made nearly half -- 47 percent -- of their entire revenue that way. And that's just among members of a single organization.

The study's author, IDC Analyst Stephen Graham, points out that the IAMCP's mandate is to promote P2P business activity, so the results aren't reflective of all partner activity. Still, the numbers show a very healthy opportunity within such organizations.

"When we looked at the aggregate [figures], it was very interesting and positive," Graham said in an interview. Since IDC had never done a study of this nature before, Graham said he had no solid idea of what to expect. "We really didn't have any benchmark. I'd suspected there would be some activity, and expected to see pockets of activity," Graham commented, but the overall numbers suggested a very viable profit channel.

How was the money made? Graham said "there seem to be a lot of services. Lot of times they [partners] said they were looking [to other partners in the IAMCP] for solution-specific expertise, and increased sales and marketing coverage -- they were looking to each other for some kind of specific expertise."

The findings suggest to Graham a new way of thinking about partners and professional organizations. "Companies are looking to P2P activity as a source of long-term business-building activity."

The traditional role of P2P interaction, Graham said, is "always thought of as a tactical and reactive strategy. 'I need someone because I can't do this part of a deal.' " In other words, looking at other partners as a way to cover their own weaknesses in an area.

But the companies making a lot of money through P2P transactions -- Graham defined them as those earning at least 30 percent of total revenues this way -- view it as "a business strategy, and see it as long-term business advantage," Graham said.

In fact, those businesses successful at P2P deal-making listed the tactical aspect of the relationship as the second-least important reason for their P2P activities. That's why a "professional association" topped the list of the most important tools or business resources they currently use. "Partners are finding value in their own professional and business networks," Graham said. "The vendor resources they're working with are important, but this is more a function of the business networks they're developing."

Those networks are paying off handsomely. Graham found that those IAMCP partners with a high commitment of P2P as a business strategy reported an average 2006 revenue growth of 23.1 percent, while the total IAMCP membership reported 18.2 percent.

Remember that the next time your partner organization's dues bill lands on your desk, and you consider whether or not it's worth it to remain a member.