Software partnerships and business models: Distributors: join the European workshop on software ecosystems

The European Workshop on Software Ecosystems is an annual event which connects top notch researchers and business professionals in the field of software and platform ecosystems as well as business networks. Here is an example of a topic we will discuss at the event.

Distributors

A Distributor gets software directly from a software vendor and sells this software to Authorized resellers. The relationship with Authorized resellers is handled by the Distributor.

Business Model Canvas for Distributor

The value proposition for the customer of the distributor is that he provides the distribution service to resellers and that the distributor provides great margins for the resellers and that he supports resellers in selling the solutions. The customer relationship is direct to the resellers. Customer segments cannot be determined in this generic distributor business model.

Revenue streams are license, support and maintenance fees flowing in from the customers and resellers to the distributor.
A distributor key activity for making business in this business model is convincing and onboarding resellers. As soon as the resellers are on board, the next key activity kicks in: enabling the resellers to sell. Key resources are sales support for resellers and support for the resellers´ customers.

More details and background information can be found in these books:

Software partnerships and business models: Revenue share: join the European workshop on software ecosystems

The European Workshop on Software Ecosystems is an annual event which connects top notch researchers and business professionals in the field of software and platform ecosystems as well as business networks. Here is an example of a topic we will discuss at the event.

Revenue share

The software vendor endorses the product of the revenue share partner. if the customer buys the partner´s product, the software vendor gets a share of the partner´s revenue.

Revenue share partnerships are also popular in the software industry and are usually used as door opener into other companies´ customers. Revenue share makes sense if the product offerings of the partner and software vendor are not competitive, but complementing.

Advantages of Revenue share are: software vendor participates in revenue that is generated by other companies, limited cost for software vendor for endorsing other vendor since cost of sales stays with the revenue share partner.

Business Model Canvas for Revenue share

The value proposition of this business model is clearly additional revenues for the partner, who does the revenue share with SAP. For the company engaging with revenue share partners, the generic model is not limited to specific customer segments. But depending on the products for the revenue share there can of course be customer segments.

Incentified by the revenue share, the company gets license, support and maintenance revenue streams.

Key activity is endorsing the partner´s software to start the revenue share, key partners are the software vendors providing the software. Key resources are the sales people hunting for customer contracts triggering the revenue share.

More details and background information can be found in these books:

Software partnerships and business models: Resell: join the European workshop on software ecosystems

The European Workshop on Software Ecosystems is an annual event which connects top notch researchers and business professionals in the field of software and platform ecosystems as well as business networks. Here is an example of a topic we will discuss at the event.

Resell

Resell works as follows: Products of the software vendor are supplied to a resell partner. The partner resells the software vendor´s products to the customer.

This is a close relationship between a software vendor and a resell partner.

Three main drivers exist for a partner to resell solutions: significant revenue for the Partner Company, solution fit of the resell solution with the partner´s solutions and non-competitive offering; with revenue being the main driver for the resell.

Business Model Canvas for Resell

In a generic model, a Value Added Reseller (VAR) provides resold products as well as additional value related to these products. The added value can come from a special expertise of the VAR related to a customer segment like consulting expertise in the oil and gas industry. So the value proposition for the customer comes from both, solutions and added value.

The customer relationship is direct and thus the channel is a direct channel to the customer. Customer segments cannot be determined in this generic model, they depend on the partner.

Resell revenue streams are from license and support and maintenance fees. Key activities in this model are selling to customers and enabling sales people to sell. Key resources are sales people and the software provider´s Channel sales manager. Key partner is the software provider.

The cost structure in this model contains cost for customer acquisition, cost of sales in general and cost of partnership management.

More details and background information can be found in these books:

Software partnerships and business models: Certified solutions

The European Workshop on Software Ecosystems is an annual event which connects top notch researchers and business professionals in the field of software and platform ecosystems as well as business networks. Here is an example of a topic we will discuss at the event.

Customers are looking for minimizing their integration cost in a heterogeneous landscape of software solutions. To proof that the integration between two software solution exists and has some level of quality, software vendors are offering certification programs. Certification allows competition between software partners to keep prices low while certification increases integration quality.

The software vendor provides certification services for a certification fee and logo usage to software companies. Software companies sell their software to customers. No revenue share is paid to the software vendor.

Business Model Canvas for Certification

The value proposition contains the following values:

• Reduced development cost and time for integrating solutions since the integration already works based on the certifiable interface.

• Quality products are being integrated to avoid that customer value is destroyed by bad quality.

• Partners that get certified on an interface create value for the company that offers the interface on their solutions because the solution scope is extended by the partner products.

More details and background information can be found in these books: