IDC Maps Out Course For ASP And Software Vendor Partnerships
FRAMINGHAM, MA – MAY 16, 2000 – For the application service provider (ASP) concept to be successful, effective partnerships between software vendors and ASPs are critical. However, many software vendors are having a great deal of difficulty navigating the partnership course. In its
new report, Partnering with ASPs: Licensing and Channel Strategies, IDC provides a road map for this most essential excursion.
"Software vendors trying to pursue ASP market opportunity absolutely must understand the partnering needs of ASPs," said Stephen Graham, vice president
of IDC's Global Software Partnering and Alliances group. "Effective partnering is a core competency that leading firms in this market will inevitably possess
and leverage to build competitive advantage."
According to IDC, the difficulty in partnering is caused by the lack of standard business models for ASP agreements, which is making it hard for
vendors to fully appreciate the broader implications of a potential deal until after it has been signed.
To simplify the partnering process, IDC suggests software vendors start with a thorough understanding of customer needs and partner requirements to build
adequate coverage of the market opportunity. To completely comprehend customer needs, vendors have to be aware of the buyers' decision-making process and the reasons they want to purchase from an ASP and not the vendor itself. "Coverage is where it all begins," Graham said. "All partnering strategy decisions
should begin with the end user to ensure that the vendor's profit motives are not supplanted by a desire to get involved with an emerging channel."
After considering coverage, the next step in the partnering process should be developing a value proposition. IDC says vendors cannot develop an
effective value proposition without clearly understanding the ASP business model.
"Only when coverage and value proposition have been considered should vendors think about negotiating agreements with prospective partners," Graham
To simplify the process of selecting partners, IDC has developed six partner agreement models. These models are published in Partnering with ASPs:
Licensing and Channel Strategies (IDC #B22202). In addition to outlining the partner agreements, the report looks at the key issues ISVs face when they
partner with ASPs and how they can address these issues. The report also examines customer needs and ASP business issues. To order a copy, contact
Cheryl Toffel at 1-800-343-4952, ext. 4389 or at firstname.lastname@example.org.
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