How to Develop Strategic Cloud Partnerships

There are many ways to engage with a cloud provider. If your company is at the right stage, and your product is a good match, a partnership can drive significant growth. So, how do you actually know? This section outlines how cloud partners could add value to your company and customers, what makes a good fit, and alternatives to consider if your company isn’t ready just yet.

Firstly, as a partner, you get access to the wide range of technical resources that any cloud provider already has. You could use these resources to optimize your architecture to scale with projected growth, or develop a new proof of concept with the cloud provider’s guidance and investment so that your internal engineering resources don’t have to be diverted from their current priorities.

Secondly, the cloud provider’s sales team could help with selling on your behalf. Earlier in my career, I worked with a tiny 5-person company that had partnered with a cloud provider to help them scale. Through the partnership, they now had access to over a thousand salespersons and their contacts. By offering the right incentives and aligning their product to the cloud provider’s roadmap, the tiny company grew their sales footprint and ended up having a very exclusive product relationship with the cloud provider and became a top co-selling partner. Their strategic partnership with the cloud provider continued to grow as did the company, which now has hundreds of major enterprise customers – a scale they were able to achieve because of the partnership.

In addition, most cloud providers have solution marketplaces that allow software companies to transact on the cloud provider’s paper. For most companies that are looking to reduce time to signature, transacting through a cloud provider’s marketplace and on the provider’s paper can lend instant credibility and significantly lead to deal time. For instance, I once saw a start-up close a $2.5 million deal in three months. Without the partnership, closing the deal would have taken three times as long. A cloud provider’s marketplace can also act as a discovery platform (through organic interest and marketing campaigns), providing new leads to companies that would not have otherwise surfaced.

Lastly, being backed by a cloud provider aids marketing efforts by giving your company’s credibility a huge boost. Some of the many benefits include reaching new markets by having your products and company showcased on the provider’s websites and case studies, and by generating new leads and gaining mindshare through joint go-to-market campaigns.

However, the benefits are moot if your company doesn’t have sufficient resources to handle significant deal flow, or if its products aren’t a good fit. Be realistic as you assess the two questions below.

Do You and the Cloud Provider Serve the Same Market?

These partnerships generally work best for B2B products simply because sales teams at most cloud providers support enterprises and small/medium corporations for cloud-based services.

To illustrate: returning to the example of the tiny 5-person company, the solution they had created enabled compliant online archiving for businesses. Archiving can be tricky because there are compliance requirements to adhere to, and these requirements are constantly evolving. Stored data also needs to be retained and searchable, and comply with regional requirements including privacy and data storage and passage . Partnering with a cloud provider offered benefits to both the company, which was able to scale its services significantly while minimizing incremental resources, and the cloud provider, that was able to expand the value it provided to its customers via service offerings.

You’ll also need to understand how to position your company’s value proposition in the context of the cloud provider’s customer base, and explore overlaps in your customer segments. For example, if your solution provides core banking as a service, your company will be very appealing to any cloud seller whose account list contains a bank, whether regional or global. Due to the fundamental nature of this offering, the total addressable market overlap between your company and the cloud provider’s will be large, which makes a compelling case for partnering with a cloud provider and jointly going to market.

What Can Your Current Sales Force Handle?

Your sales team needs to be ready to both receive and close leads generated by the partnership with the cloud provider. Let’s say the partnership generates over 100 leads a month, and you’re only able to handle 15 at a time. This bandwidth constraint limits growth opportunities significantly for both your company and your cloud partner, and it is important to set expectations up-front on partnership goals and capacity before engaging in a joint sales motion.

What if Your Company Isn’t Ready Yet?

It can be disappointing to acknowledge that this is not the right time to partner deeply with a cloud provider, but this also represents other opportunities for growth that might be a better fit. After all, beyond a partnership, there are many other ways for you to engage with a cloud provider. Use this as an opportunity to explore the different ways you could benefit from their services and build towards a partnership.

Most cloud providers offer programs for startups that have been in business for a limited period of time or earn revenue below a certain threshold. They offer a sampling of services to these companies, and generally provide cloud credits without requiring any commitment from the start-up itself. Look up the different programs and apply to the ones that better suit your needs. This gives you a chance to test assumptions you may have about the partnership before committing resources, such as migrating to a different cloud provider or expanding your sales team to gear up for higher deal flow.

More importantly, start building your network and establishing your presence in the cloud provider’s ecosystem. There are aspects of the partnership that you could achieve on your own such as getting listed on marketplaces offered by cloud providers. Partnering with established players in the cloud provider’s ecosystem could incentivize potential cloud partners and potential customers to reach out to you if they find your solution interesting. The marketplace listing can also be a powerful tool for breaking into the cloud provider’s ecosystem as most marketplaces allow you to unlock incentives based on the level of business you transact through your listing.

If your company is ready to partner with a cloud provider, here’s a reminder that may seem obvious, but is overlooked by so many: you’re entering a partnership. You need to work together to help each other achieve your respective goals. Yet, so many people enter the partnership focused on what the cloud provider can do for them.

A simple shift in mindset, that is to also consider things from your new partner’s point of view, can make a big difference. It remains relatively rare, and I’ve seen what a change it makes to the conversation – especially for companies meeting with the cloud provider’s sales team for the first time. By asking questions such as ‘What are your metrics?’ or ‘How can I make you successful?’ most members of the sales team tend to warm up and prioritize the partner, and are likely to pay more attention.

Admittedly this takes some upfront effort in learning more about your partner ahead of time. By understanding what they stand to gain, you can be more strategic about when you enter the partnership, how you position your company and better align your pitch with their priorities and interests, which can vary dramatically each fiscal year. This way, you can both make the most of working together.

B2B partnerships still come down to people. Your main contact in such partnerships would usually be someone on the sales or partnerships team. What metrics drive their success? For instance, most compensation for cloud sellers is driven by consumption of cloud services. Use this knowledge to explicitly frame how a partnership can support their immediate success while adding value to their customers: ‘I have a solution that your customer needs and solves this problem for them. Our solution will drive this amount of dollars per month for your customer, and we will transact through your marketplace.’ This not only highlights how your product serves their needs, but shows the scale of transactions they could expect and quantifies what they stand to gain.

In addition, learning the sales structure, priorities and compensation each fiscal year is key. Most sellers are compensated on a fiscal year basis. Therefore, they tend to care only about deals that can close in these 12 months, so timing is really important. Generally, if you reach out to the cloud provider’s sales team near the end of the fiscal year to broach a deal that will close the following fiscal year, you will miss your mark with your audience and will not receive support.

Understand the stakeholder map within the company. Cloud providers have rapidly evolving and complex sales and partner organisations, so be prepared to refresh this map every one to two years. Understanding your cloud partner’s core priorities, incentives and stakeholders allows you to align your partnership, funding, technical and sales roadmap accordingly, so that you can optimize your partnership.

Read interviews with key personnel or listen in to flagship conferences –organizational structures are usually revealed through these sources. Alternatively, professional or crowdsourced platforms such as LinkedIn and The Org could offer insights as well. Whatever your source, you should be able to answer: What is the company structure? How are the sales and partnerships teams set up and segmented? What are their core priorities this fiscal year? What incentives are available to partners?

This also gives you a sense of who you should reach out to, or if nothing else, aspire to connect with. For instance, if you’re selling a security solution, the best case scenario would be to have an executive in the security product or sales team in your corner. It’s not an easy connection to make and takes time, so start proactively

Be up front about what you and your company are capable of. As mentioned, companies tend to overestimate their bandwidth and often aren’t able to manage deal flow when the cloud provider delivers on their end of the partnership. In addition to being a huge missed opportunity, it also makes it that much more challenging to mend the partnership due to reputational fallout, should you wish to work together again. Likewise, your partner should be clear about what your company can expect to get from them. Be explicit, even if it seems pedantic, so that you can hold each other accountable.

Silent Partners

This said, even despite your best efforts and investments, your partner may not hold up their end of the deal. One of the biggest challenges you’re likely to face: not getting attention from your cloud partner.

If you have a partner manager, or if you’ve worked hard to build a good network with critical connections, here are steps you can take. Firstly, be persistent about reaching out to your partner,manager and their leadership team. Contact them directly – remind them of their commitments, the reasons they entered the partnership to begin with, and what they stand to gain.

Ask your customers to reach out to them and flag why your product is important. Feedback from end users could give the seller a sense of demand, which may push them to do more. Reach out to your networks, or connect with system integrators and other key partners who could benefit if your product grows.

Use the stakeholder map you created previously, or look up the cloud provider’s website to identify key contacts. Reach out to them to give your seller a nudge, or ideally get a warm introduction to another seller who might be more motivated to honor the partnership. As a very last resort, if you have a contract with commitments clearly defined and agreed to, reach out to the partner’s executive team for guidance, and possibly legal assistance. Consider moving your business to another provider who will honor and value the partnership. To this point, when you architect your cloud solution, proactively do so in a way that will allow for an easy lift-and-shift migration to a different provider, should the need arise.

1 Assess if Your Company Is a Good Fit

Cloud partnerships can offer amazing opportunities for your company to grow – but only if you’re ready to handle it. Is there a good product and customer segment match? Do you have a well-trained sales force ready to receive and close leads? If not, explore other ways to engage with the cloud provider.

2 Define Success for All Parties in the Partnership

Many companies enter partnerships excited about what cloud providers can do for them. But what does success look like for a cloud seller? Take time to understand the metrics and key timelines important to them. Work to establish a partnership that benefits both of you and align your goals and expectations based on reality.

3 Build Your Network

Start building your network today. This should include system integrators, product partners, industry leaders - not just cloud sellers. A benefit of having strong connections? If your eventual partner doesn’t hold up their end of the deal, members of your network could influence them to act otherwise.