Service Providers Hope to Develop Strong Partnerships with ISVs, IDC Says

FRAMINGHAM, MA – JUNE 20, 2001 – According to IDC, the current economic slowdown is bridging the gap between service providers and IT product vendors. Historically, service providers have been reluctant to entwine their business closely with independent software vendors (ISVs) and instead have insisted on remaining product neutral. However, in this tougher economy, customers are demonstrating a preference for purchasing products and services that together fulfill a specific business need. As a result, service providers are increasingly focusing on establishing partnerships that can help them deliver these desired solutions.


"It’s do-or-die time for many IT service providers, and as qualified leads become more difficult to come by, they are seeking to team up with winning ISVs to pool resources," said Bryan Luck, an analyst with IDC’s Software Partnering and Alliances research program.

In the past when service providers partnered with ISVs, it was generally to secure a large customer win and no underlying strategy was involved in the decision. Now, however, service providers are reevaluating their past partnerships and ending those that are not driving new business. "When partners are chosen in an ad-hoc fashion, it’s extremely difficult for the relationships to deliver any long-term strategic value," Luck said. "By strategically focusing investments on ISVs that can help build differentiation and leadership in the market, service firms will be able to extend their partnering vision beyond individual clients and projects."

IDC warns that despite their increased attention on forming deep partnerships with ISVs, service providers must nonetheless retain a certain degree of objectivity. "Service providers have a responsibility to recommend the solutions that best meet their clients’ needs, regardless of whether they involve a partner’s product," Luck said. "All service firms will have to walk a fine line between supporting their partners and doing what’s best for their clients. This won’t be an easy task, but certainly it’s possible."

IDC’s report Partnering for Solutions Success: Profiles of 20 Services Firms That Matter (IDC #B24818) analyzes practices that can help services firms maximize their partnerships with software vendors and other potential partners. It profiles the partnering approaches of 20 midsize service firms, provides a framework to help service firms establish effective partnering practices, and identifies and analyzes partnering trends and best practices. To purchase this report, contact Jim Nagle at 1-800-343-4952, extension 4549, or at

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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