Over the years, we have interviewed hundreds of ISVs and asked them what they expect out of the OEM partnerships they select; and we have asked program holders what they look for in ISVs when they seek to recruit new partners. While the answers differ from both audiences, the one fundamental issue that has yet to be addressed is why information on OEM programs is so hard to find.
Our independent research and experience marketing such ISV-OEM programs covers a wide range of offers for both verticals and horizontals. By understanding some of the key takeaways, we will uncover ways that you can improve the visibility of your ISV offer and generate more opportunities.
1. Most ISVs partner with the “usual” suspects (Top Tier programs)
Typically, ISVs are small organizations with limited marketing bandwidth and go after the “low hanging fruit” when it comes to the types of OEM programs available to them. The Top Tier programs become their “must have” partners, so those are the ones they seek out first and foremost. It is clear that ISVs underestimate the value of less visible programs, whether within large OEM players or Tier 2/3 players; information on such programs is harder to come by and more “exclusive” since they generally target ISVs that are sure to give them “tangible and immediate” results. In short, the small ISVs go after the large OEM programs, while the small OEM programs go after larger, more well-established ISVs. However, our experience shows that many lesser known OEM programs generate a higher satisfaction rate than mainstream programs; the value-add is greater as is the ROI. Unfortunately, because such programs are more elusive and have stricter requirements about who they will partner with, many OEMs may be missing out on fast-growth ISVs who could be of great benefit to them.
2. OEM outreach programs generate high marketing ROI
End-user sales opportunities are still a main revenue generator for most, but an ISV audience is easier to target (if you rely on a good marketing service provider) and faster to engage. ISVs are more responsive to messaging about OEM programs, and are likely to commit to long–term partnerships. Therefore, the benefits to the OEM program holder are not only faster to materialize (ISVs are quick to join programs) but long lasting (as ISVs stick to their technology partners in a more sustainable way than SIs or traditional resellers and therefore generate more revenue over the life–cycle of the partnership). In fact, our experience shows that ISV/OEM marketing dollars generate higher returns than either end user marketing or other channel (SI’s/reseller) recruitment programs.
3. OEM programs are a great provider of market intelligence feedback
Because the relationship with ISVs is usually more open and less transactional than with end–users, our experience demonstrates that companies with solid OEM programs generate a tremendous amount of feedback that can make a huge difference from a product management stand–point. ISVs are eager and willing to share the experiences of their end-users with OEM program holders, which in turn can help accelerate discussions about the development roadmap for new features. By nature of the industry, a software product that doesn’t evolve dies; so getting feedback from partners can be a big help in order to determine the trends that will influence such product development.
Tips to make your OEM program more visible
So now that we’ve covered the importance of making your OEM program more visible, here are some tips to do just that.
First, think of all the benefits you provide to ISVs, in particular when it comes to the technology edge that will allow them to deliver a stronger value proposition to their end-user customer while saving valuable (development) time. This dimension is of growing importance as our studies show that ISV upstarts are more prone to embedding third party technologies than “legacy” ISV players. The key here is to show how embedding product features will enable the ISV to focus on their “core” area of development while implementing the best practices for other fundamental feature sets. This should be the focal point of your marketing messaging for the ISV. Creating case studies/success stories with some of your key partners will concretely demonstrate the value of your OEM program.
Next, providing marketing support will ensure that the relationship is win-win. ISVs are getting more marketing savvy and understand the benefits of belonging to a specific ecosystem: increased mindshare and exposure to new business opportunities. By helping to fund co-branded marketing activities with the ISV, you can help showcase the support you provide to mutually grow your business and theirs.
When you run your own outreach to recruit and onboard new partners, it is critical to nurture ISVs throughout the entire partnership life cycle (and not only at the initial integration phase). It is important that the ISV understand how they will be accompanied; this will help reassure them about your commitment to making the relationship a success.