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The Next Wave - Alliance Ecosystems
The evolution of B2B ecosystems & how early adopters are viewing alliance partnerships as a new and innovative way to gain market traction.
The B2B SaaS landscape has massively changed over the last 20 years.
(2000) SaaS Suites
In 1998 NetSuite, the first-ever cloud ERP application was founded. NetSuite brought upon the era of SaaS Application Suites.
(2005) Horizontal SaaS Ecosystems
Then came along Salesforce, which was the first cloud CRM provider to hit the market. Salesforce created a horizontal ecosystem of software vendors, like support and collaboration tools, that Salesforce integrated with and marketed on the App Exchange. Given that Salesforce's horizontal ecosystem was industry agnostic, this made it very attractive developers to build on, which in turn increased the cloud market size and the value of Salesforce as a company.
(2010) Vertical SaaS Ecosystems
In 2007, Veeva Systems was founded and led the way in building a vertical ecosystem. Veeva is a cloud software company focused on the life sciences industry. Veeva took a similar playbook to Salesforce in building an ecosystem, however, took a verticalized approach focusing on one specific industry—Life Sciences, which is highly regulated and required an extra level of industry-specific expertise.
(2015) Integration Ecosystems
30% YoY growth in APIs, have enabled any sized SaaS company in any industry to create an integrated ecosystem fast and early. Think about it, if you are a SaaS company today and are not integrating with other products, you are way behind. On the dark side, the rise of cloud and APIs resulted in a great deal of fragmentation, growth in competition, and an increase in the costs of customer acquisition (CAC) on most channels.
The barriers to entry in SaaS have gone down, but competition has gone way up. In the earlier days of SaaS, launching a product was timely and expensive. Today, a small team of developers can spin up Amazon Web Services, Mandrill, and Twilio, all open-source cloud services, for a very low cost and be up and running in no time. This has resulted in more competition due to a massive supply of new SaaS upstarts. Founders today are reporting 8X the number of competitors than they saw in 2016.
+Higher Customer Acquisition Costs
These systemic changes in SaaS have led to a change in 'buyer behavior'. Buyers have more information than ever before at their fingertips. On average buyers are 57% through the sales cycle before even speaking with a sales rep. Also, 90% of decision-makers never respond to cold outreach. This has resulted in a higher cost of customer acquisition as the traditional go-to-market channels are now much less effective. Marketers are reporting that the cost of customer acquisition has increased by 50%+ since 2016. Wow.
(2020+) Alliance ecosystems
Fast forward to today, the next wave we predict will be alliance ecosystems. In particular, alliance ecosystems as a go-to-market strategy. It's the perfect storm for this type of thing. The growth in APIs has brought companies closer together. Early adopters that follow this trend are viewing alliance partnerships as a new and innovative way to gain market traction.
When you think about it, it makes perfect sense—why limit your market reach to only the salespeople and marketers that you have hired, when you can 10X your market reach through leveraging alliance partner relationships in the form of co-selling.
Companies like Sendoso and Optimizely, are ahead of the curve in creating alliance partner ecosystems, following a well thought out the go-to-market playbook. Check out our Partnership Strategy Template as an example.
Realistically the majority of upstarts look at alliance partnerships and co-selling as something that they should focus on when they are a larger and more established team--when they can hire a dedicated partner manager that can dedicate all their time towards driving a co-selling strategy. This thought process makes sense (we'll kind of)-- today, co-selling typically takes place over email and spreadsheets, which make it very time-intensive and hard to measure endeavor.
At CoSell, we are on a mission to make co-selling fast and easy while unlocking the massive revenue potential between partners.
How it works:
- Sync your CRM
- Find or invite partners
- Discover account overlaps
- Unlock warm introductions and sales insights with your partners.