Sales and Marketing Strategy in the IT Industry – Collaborating with Independent Software Vendors (Management Project)
The IT industry is characterised by rapid changes and an increased level of consolidation and competition. Hardware and software developers are moving away from proprietary technologies to open-standards based technology. This makes it more difficult for large hardware vendors, such as Hewlett Packard (HP) and IBM, to lock their customers and partners to proprietary solutions.
Therefore, in order to keep and increase its market share, HP needs to improve its collaboration with partners. The partners, especially local and regional independent software vendors (ISV), are important due to their applications focused on solving business problems, their ability to provide industry relevance to HP’s products and their ability to influence what kind of hardware and software platforms the end-customers will choose.
We have identified key market characteristics, the ISVs’ key needs and challenges, as well as what they consider crucial in order for them to recommend a certain vendor’s hardware platform. Companies in the IT industry face several unique challenges; one is that there often exist conflicting interests between the different industry members, e.g. competitors collaborating with each other. This puts extra pressure on clarifying the rules of engagement between the collaborating parties.
The ISVs are generally agnostic to which hardware platform the customers buy as long as their applications run on the specific platform, therefore the ISVs’ vendor preference is often based on more intangible relationship factors. Factors that affect and decide the ISVs’ preference are e.g. their existing vendor relationships, ease of doing business, clear point of contact and clear rules of engagement. Furthermore, many of the ISVs are interested in having joint- business planning and go-to-market strategies with HP. In order to leverage hardware, we recommend that HP tries to tie the ISVs to them and form closer relationships with the ISV community. (HP must however carefully evaluate the value of the individual ISVs and what they can offer.)
The recommendations consist mainly of how to select the relevant ISVs and, after the selection, how the ISVs should be categorised and managed by utilising HP’s partner portal for developers. This would enable HP to engage more efficiently with key partners, which in turn would lead to increased leverage of HP hardware.
Source: Linköping University
Author: Antvik, Niklas | Bihammar, Patrik