Partnering in the Digital Economy (Daniel Saks, AppDirect)
What will the digital economy look like in ten years? How will those changes affect SaaS companies’ partnership opportunities and decisions?
To find out, Daniel Saks and AppDirect commissioned a Digital Economy report to examine how cloud use has matured in various businesses and industries.
How is the digital economy evolving?
In 2010, cloud was in its infancy. Many of today’s top SaaS companies were in their infancy. Since then, the cloud has grown in both size and scale.
Today, we see the digital economy beginning to take over the traditional economy. Companies we thought of as solely brick and mortar ten years ago can be cloud-based today. For instance, a hotel company might focus on brick and mortar lodgings, or it might connect lodgers and lodgings, like Airbnb does.
Similarly, many purchases once thought of as “products” are now turning into digital services. Insurance products, for example, can now be built digitally and tailored to individual customers.
As a result of these changes, about 70 percent of CEOs believe that the digital economy will transform the way companies in traditional industries operate. The cloud is becoming the primary way companies will distribute products.
How is the digital economy transforming traditional industries?
To illustrate how the digital economy is transforming traditional industry, Daniel offers an example based on a manufacturing plant. Ten or twenty years ago, manufacturing was machinery-driven: Machines built products, and if they broke, a mechanic would be called in to fix them.
Over the last decade, however, manufacturing has become increasingly computer-operated and interconnected. The devices that build products are now connected to the cloud, speeding product life cycles and allowing for more customized builds. The machines are more adaptable, which allows for faster research and development.
An ecosystem of software has arisen as well. For instance, a single robotic arm in a manufacturing plant might interact with ten different pieces of software, each of which requires testing and verification before being pushed to the manufacturing floor.
Similar approaches can be used to change other industries, from auto insurance telematics to radiology to banking. These industries have begun to embrace partnerships with SaaS companies as they realize how these tools can transform their work.
How can SaaS companies create beneficial partnerships?
As verticals transform, so do traditional partnership models. Traditional partnership models, including affiliate, referral and reseller, are changing as the cloud evolves.
One of the top disruptors of traditional partnerships is the realization that “sharing information” means more than sharing an assessed tool or an application. It can also mean sharing datasets or sharing information embedded in an IoT device. It may even mean sharing new ways of thinking about digital solutions, like bundling hardware/software connectivity.
Daniel describes one use case for partnerships that’s driving workflow: Creating town hall AV systems. Independent resellers use their expertise to bundle various hardware and software products into a single, streamlined system that end-users can operate effortlessly. Their expertise adds value and enhances the customer experience, providing a win-win for each supplier, the reseller and the customer.