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8 Partnership Types for most impact in 2023. Proven framework for building successful ecosystem

🏁 I’m thrilled to kick off our 2023 workshop series with Daniel Stefanic, who led partnerships in Atlassian, Symantec and Easy Agile before founding Atlumni syndicate.

Daniel shared his secrets from leading partnership and enterprise sales in the most successful SaaS companies of the last decade to help you divide and conquer your partnerships this year.

If you’re new to partnerships, this workshop will help you prioritize and map the territory. If you’re an expert, this will undoubtedly give you fresh ideas.

0:00 Intro

1:30 How partnerships can create much larger impact vs other functions?

3:20 Workshop kickoff

3:20 About Daniel

6:10 Feel good, philosophy and truth

13:40 Marketplaces - Apps & Platform

16:20 Technology alliances

22:40 Value-added resellers (VAR)

26:20 Distributors

28:50 Software licensing partners

30:30 Consulting partners

33:00 System integrators

34:50 Telcos

37:50 Q&A

Partnerships vs product-led growth vs sales-led growth

New partnerships vs traditional channels - complementary or mutually exclusive?

Daniel, I couldn't really imagine a better person than you to explain the entire range of partnership. We've known each other for a while, you've been in both enterprise sales and partnerships. You worked in such iconic companies like Atlassian, Symantec, and smaller growth stage companies like Easy Agile. I'm really excited to see your presentation today explaining the entire range of partnerships. But before we go into that, I know that you have years of experience in partnerships and sales. Can you walk us through your partnership journey and your journey in tech in general.

I started as a web developer during my university degree and became an accidental salesperson after getting a graduate job as a bid manager for IBM. That experience led me into a direct sales career, which eventually led me to partnerships. I find that partnerships are more strategic and require thinking about how to excite people outside of your organization about your product or offering, and getting them to advocate for your company within their customers. Your ability to have an impact through partnerships is what excites me the most.

I know you've been working on other interesting initiatives outside of this discussion, but I'm sure we'll hear great things from you. For now, I'll give you the floor for the next 20 minutes and we can do a Q&A afterwards.

Today, I'll be speaking about what I call the Petals of Partnerships. It's a template or boilerplate for IT partnerships. I use the visual analogy of a flower with its petals. Your company is in the center and the partnership arrangements with other companies extend the reach of your organization into the marketplace. These include marketplaces, software licensing, VARs, telcos, etc. We'll cover this in the presentation and have a Q&A at the end. To start, I'll describe who this is for and go over a feel-good philosophy and truth that I consider when working within a partner ecosystem. Then, I'll summarize the petals of partnerships template.

As mentioned, I started at IBM, then they sold their PC division to Lenovo, which I was a part of, creating the first Chinese multinational company. After that, I worked as a partner manager in the federal government at Symantec, then became a regional partner manager at Atlassian. Within Atlassian, I moved on to become an enterprise sales manager in APAC and the Americas. After spending six years at Atlassian, I joined a successful startup, Easy Agile, as Head of Partnerships and helped create their partner program.

Who is this for?

It's anyone interested in software and hardware partnerships. When it comes to software, you may be selling SaaS or on-prem software. Together with hardware, this covers all partnership parts for you. If you're starting from scratch, you can use this as a guide to prioritize, divide, and conquer, creating a partnership ecosystem. Or, if your partner program is stagnant, this could give you fresh ideas to re-segment your partner ecosystem and potentially target new partners and the customers they can help unlock for you.

Moving on to the feel good, philosophy and truth

I'll start with the feel good - you’re a snowflake, your situation is unique. When sculpting a partner program, you need to think about your company, product, competition, and macro environment. You need to curate your own strategy, as what others have done or what you've done previously may not work in your current environment. Think about your situation and build your own scenario.

Now, let's talk about philosophy and the way I think of how organizations partner and manage human capital. Think about who works for you. Generally, you have employees paid monthly to deliver a task and contractors paid for a project or a certain amount of time. Your partners, on the other hand, are paid later. Unlike employees and contractors who are paid upfront, your partners are paid later after investing their time and rendering services. They are only paid if they are successful in meeting a customer's requirements.

To motivate your partners, they need to see the opportunity in your product's fit in the market and the incentives in your partner program. Ultimately they need to see a return on investment in working with your organization.

Generally, you have employees paid monthly to deliver a task and contractors paid for a project or a certain amount of time. Your partners, on the other hand, are paid later. Unlike employees and contractors who are paid upfront, your partners have to pay later after investing their time and rendering services. They are only paid if they are successful in meeting a customer's requirements.

Now, leading on to the last bit of this section - the truth. You need to understand that any customer you're trying to reach already has a relationship with at least one industry Goliath, either Google or Microsoft. Their purchase will be dictated by who they hand their check to for their email infrastructure - Gmail if it's Google or Outlook Exchange if it's Microsoft. This relationship with one of these titans will set the tone for future investments. For example, if a company is considering a new chat app and they already purchase email services from Microsoft, who bundles Teams already, the likelihood of purchasing Slack will be lower. Keep this in mind when sculpting a partner environment. Before moving on to the Petals of Partnerships, are there things you want to discuss?

Your last point about setting the tone for partnerships by selecting something as simple as an email provider is great. Can you elaborate on that? Does it frame partnership philosophy or does it attach to a specific vendor? What do you mean by that?

As a company grows, often when they're entering commercial arrangements with Google or Microsoft, these organizations have a way of adding products or value as the contract grows and gets renewed every year or few years. If you're aligned with a particular stack, that stack may create opportunities if you know your product works well or complements Microsoft products. The Microsoft ecosystem may be a great place to start working with. Alternatively, it may be a place you need to consciously avoid or not invest a lot of time into. Be aware of their significance and the relationship they may have with some of the customers you're targeting. At a macro level, it may influence some of the decisions you make and where you invest your time.

We know firsthand how challenging launching and scaling partnerships 🚀could be.

That's why we build a modern light PRM that can help you to do it at 3X speed, while delighting your partners at the same time.

Partner Insight PRM helps partnership teams to onboard and train partners in minutes with automated workflows, as well as sync and exchange data between teams in 2-sided partnerships hubs.

⚡️Try it for free with 3 partners now

or schedule a 15 min demo here

I agree with you that every company is unique. When you started as a new partnership manager at Easy Agile or Atlassian, how did you come about mapping the ecosystem? What were the first targets or initial partners you wanted to target? How did you approach this question directionally?

A great place to start is with an audit of your existing relationships and seeing if there's opportunity to grow them. These are organizations if your company already has a relationship with, it’s a great chance to invest in those existing relationships. Sometimes, if you've inherited some partnerships, they may not be ones you'll be able to invest in moving forward. Take stock of what you have, there could be gems there, and make a decision to continue to invest in them, help them grow, listen to them, ask them, "What are we doing right? What are we doing wrong? What can we do better? Where do you see an opportunity?" When polling these partners, you'll find where you need to place your bets moving forward.

We'll keep discussion of how sales intersect with partnerships and product for later because it will be a longer discussion. For example, how do you convert clients into partners? How do you overlay partnerships on top of product led growth,, etc. But please continue with your presentation.

Now let's talk about each of these "Petals" of partnerships. As I mentioned, this is a way to visualize a partner program extending from a company. I'll talk through each one of these types of "petals" or partner routes. I'll preface this by saying there are a lot of gray areas and when I'm speaking about one of these areas, I'm generalizing. There could be overlap with other areas and the picture you see on the screen shows some of that too.


I'll start with perhaps the most relevant type of partner model right now, which is marketplaces. These are marketplaces through apps and platforms. The key traits of this type of partnership are that a software vendor opens up their software to third party extensions that work on or can be sold through their platform. The most famous example is the Apple App Store, which pioneered this model. But for enterprise software, there are many others including the AWS Marketplace and the Atlassian Marketplace, where you can purchase third party software and deliver it through their apps and platforms. These vendors essentially curate the product experience and extend their existing transactional relationship to a third party, which could be your company. These companies set up a platform for their existing customers to receive the same invoices, but for your product through their platform.

The level of expertise that these organizations will have in your product will be low, because they're marketplaces and often global, so their geographic reach is high.

The amount of time you'll have to spend training an organization that you partner with on their marketplace will be low, but your internal investment in setting up a route through a marketplace will be high. You may have to invest in your code base and billing systems to support this, and there could be contracts you'll need to review.

Generally speaking, if you're a software vendor, you'll probably have to give away 20 to 30% margin, which seems to be the industry standard when selling through an app marketplace.

Technology alliances

I'll move on to technology alliances now. This differs from marketplaces because it's generally an intra-vendor relationship, like vendor alliances where you OEM your products or whitelist your product. Whitelisting is when the software vendor you're working with rebrands your product and sells it as their own, or integrations where you may decide to integrate with their products or become API partners. I'll use a hardware example to illustrate this: HP partnering with Norton to install antivirus software on devices that a customer may want to activate when they bring a new computer home. And that's two vendors working together. HP protects their customers by giving them best-in-class security products.

On the other side, HubSpot may decide to work with MailChimp to build a tight integration between their products. The objective of this arrangement between HubSpot and MailChimp would probably be to align with the strategic direction of both companies, where one plus one equals three. They may want to do this because partnering and having tight integration between their products can help them have a better story against a competitor such as Salesforce and their marketing offerings. It complements both companies with what they're trying to achieve.

The expertise each company will have in each other's products will be low, but the geographical reach of this type of arrangement is high and often global. Each company probably won't need to train staff tremendously heavily to get this going, but there will be an internal investment. You'll have to set up a bespoke contract and, if dealing with software, there will be technical overhead to make sure your apps speak to each other.

In terms of software margin, there may be no margin given away in this arrangement, like the HubSpot and MailChimp example. It could help both companies grow their respective markets, with no transaction taking place. In the Norton and HP PC example, there could be 30% of each license transaction going back to HP. I'll talk about value-added resellers in a second. Any questions so far?

We can use Atlassian as an example, or I just profiled Zoom recently. Zoom or Atlassian, would mention a couple of companies like Slack, for example, as an alliance partner. Or Slack would mention Dropbox as an alliance partner. I'm wondering how this type of integration and relationships differs between integrations through the marketplace versus strategic alliances. I understand there's a big difference in contracts, both in terms of technical integrations and how companies train their workforce to push each other's product. How are they different?

In the example I use, the marketplaces generally involve a transaction through a platform or marketplace to reach an end user. There is an exchange of money, with a customer going through the marketplace provider, such as Zoom or Slack, and the provider receiving payment. With an integration partner, it is often more bespoke. In a marketplace, the vendor has created a standard set of APIs and a standard way of doing things that many vendors must follow within that structure.

Integrating products [in strategic alliances] could be more bespoke or there may not be a transaction. You can pick and choose who you work with.

Thanks for explaining that. But the outcome for customers seems to be similar, right? For example, with Atlassian and Slack or HubSpot and MailChimp, customers will be able to use both products, but there may be separate invoices to pay for them. But it seems to be in the background that relationships are different.

When it comes to the Atlassian and Slack relationship, there is a mutually beneficial interest in tightly integrating the products. However, both companies are enormous entities and Slack is not actively looking to sell through the Atlassian marketplace. It would also mean that Slack would give up a significant amount of margin to do so, and ultimately, it's not working on the Atlassian products as well - that is generally a key differentiator. Your products are generally installed and working on the products of the marketplace you’re selling through too.

Thanks for explaining, please continue.

Value-added resellers (VAR)

Let's talk about value-added resellers (VAR). This is probably the most common form of software or hardware partnership. And the way I think of these partnerships is where your product is paired with another company's human capital to deliver an offering or service. These organizations often have domain expertise and some geographical reach. This could come in the form of an architect or an expert in your local city up to an organization which may have a particular field of expertise in the US. Value-added resellers are generally small to medium-sized service businesses with key strengths in a subject domain, industry vertical, or region. It's hard to find a value-added reseller organization with awesome domain expertise worldwide. If you find one, they'll be a unicorn, so grab hold of them. Some examples of large VARs include CDW, Dimension Data in the Middle East and Africa, and Data#3 in Australia. They position themselves as subject matter experts in certain fields or verticals, with medium to high expertise in what they do.

Unfortunately, the geographical reach of these organizations is often low to medium. They are often experts in what they do, but they are usually limited to a city, region, or country. For example, in Europe or North America, they are not usually cross-geography.

Your training investment in fostering value-added resellers and building expertise in your products will be medium to high. There will be many of these organizations scattered around the world, and your internal investment in managing them will be high. There will be many of these organizations in different time zones, so you'll need to create a partner program with structured rules, guidelines, and formalized training. This will take a considerable amount of investment.

Your software margin is often dependent on the type of partner program you architect. These days it is generally based on skill or sales volume or a blend of both. If you have a software business, you will probably give away between 15% to 30% margin to your value-added resellers.


Now, I'm going to speak about distributors. In the current SaaS climate, distribution partners are often overlooked. There is an opportunity here, especially for smaller organizations, to really partner with distribution partners that have been around for a while. These distribution partners do not sell directly to customers. They essentially aggregate access to hundreds or thousands of value-added resellers in a region.

If you're a hardware company looking to partner with a distribution partner, they may also buffer local inventory. Some established names that are distribution partners include Ingram Micro, TD SYNNEX, Westcon-Comstor, Exertis, and there may be niche players as well. My former manager from IBM and Lenovo, Neil, started an Internet of Things distributor in Australia called Sapply, which focuses on working with organizations in that vertical. Beyond these big names, there are niche players that may work in your vertical.

These organizations are valuable because they can manage many transactions and regional relationships, especially if you're dealing with non-English speaking markets or currencies beyond the US dollar or euro. They also have excellent logistics capability for hardware.

However, because their expertise in knowing your products is often low and their geographical reach is often low to medium, your training investment and internal investment with them will be low, as well as your software margin if you're a software company.

Software licensing partners

Moving on to another type of partner that is often overlooked in the SaaS space: software licensing partners. These organizations assist very large organizations or governments in procuring and managing software licenses. For example, a large bank with many offices around the world may have people making procurement decisions independently in these locations, buying software from the same vendor in another country. Organizations like SoftwareONE, Insight, and Carahsoft (based in the US) may be able to help you aggregate those purchases and have expertise in software licensing. Some larger vendors even require audit compliance, so if you're a large company please tell us exactly how many of their licenses you have deployed and where they are - they may help you to maintain compliance. These organizations may also have access to purchasing panels, particularly in government. Carahsoft does this very well in the United States, while Data#3 can do it for you in Australia.

Their expertise in your products is generally low to medium because they will want to know how your product is licensed and sold. Their geographical reach is therefore low to medium. You probably won't have to spend a lot of time training them beyond how your product is procured and sold, so your internal investment will be low.

Consulting partners

Now I'll move on to what I call consulting partners. The key trait here is that they are generally the Big Four audit firms, and they have key relationships because of the nature of the work they undertake within the accounting realm. These organizations are structured under a partner ownership model, where, over time, an employee will eventually acquire a stake in the company and become a part-owner. There will be thousands of these part-owners.

Some examples of companies in this arena are Accenture, Deloitte, PwC, and Capgemini and EY. I included Accenture and Capgemini, I know they're not a big four audit firm, but their DNA and how they're structured and how they work come out of Arthur Andersen, which links back to Accenture and Capgemini I believe is also linked to EY. Their culture is really linked to how these companies operate, and how they approach their customers is similar. These firms often work with an organization and partner with their strategic initiatives.

Their expertise is very high, and they often have many architects with architect level skill sets within their environments. These firms also have a wide geographical reach, with hundreds of thousands of employees.

Therefore, your training investment is also going to be high. Finding where these employees are and who they are is a job in itself, so your internal investment is often going to be high too. However, the value they can bring to your company and your customers is high, so the margin they command is generally higher, around 30 % if you're a software company.

System integrators

I'll talk about system integrators. and how they differ from consulting partners. System integrators generally pitch to their customers and say "Hey, we have the capacity to take over your entire IT organization." These organizations are also extremely large. You may have heard of Fujitsu, DXC, Unisys, Wipro, and Infosys. When they approach their customers, they're telling them they can take care of the full stack of their IT needs. For example, if you have client devices in your bank, you may not want to worry about laptops scattered all around Europe, so you may decide to hand over a check to Fujitsu to take care of this work for you, and everything that runs on those devices. You may do the same for your data centers or mobile devices, or all of the above. These organizations have hundreds of thousands of employees, and they work with their customers to take IT infrastructure and the management of it off their hands if it's not their core business.

Their expertise is often medium to high, and their geographical reach is wide. You'll have to spend some time investing in training them, but they're pretty self-sufficient. Your internal investment can be medium to high, and the software margin will be on the higher end.

We know firsthand how challenging launching and scaling partnerships 🚀could be.

That's why we build a modern light PRM that can help you to do it at 3X speed, while delighting your partners at the same time.

Partner Insight PRM helps partnership teams to onboard and train partners in minutes with automated workflows, as well as sync and exchange data between teams in 2-sided partnerships hubs.

⚡️Try it for free with 3 partners now

or schedule a 15 min demo here


Last but not least, this one is also overlooked:p Telcos. You may have heard of Verizon, T-Mobile, BT, Orange, Telstra, and NTT. These organizations generally have a billing relationship with all of your customers. If you're not focused on enterprise, perhaps consumer, they've probably got a billing relationship with consumers as well. If it's appropriate, unlocking some of these billing relationships could help sell your product through their customers. They also have expertise on the consumer device level and offer enterprise services that complement carrier services. If you're a software or hardware company with a networking, security, or messaging product that complements what they're offering as carriers, they may be interested in partnering with you and offering your services as part of a package to their customers.

Generally speaking, they will be focused on their own products and their expertise in your products will be low to medium.

Their geographical reach is often low to medium, often down to a country level. Your training investment within will be low unless it becomes something strategic, and your internal investment will be medium, often contract heavy when trying to enter an arrangement with one of these companies. The margin that they command is high.

I'll leave the discussion of Petals of Partnerships and open it to some discussion.

First of all, thank you for walking us through the entire range of different partnerships. It's really interesting and a very detailed breakdown. It's super helpful. I think the way I feel about partnerships today is that there are almost two types of partnership people: one of them is a group with a lot of experience, maybe coming from a channel and there's a new group of partnership people who come in from the new SaaS world. You mentioned a couple of overlooked partnerships, like distribution, which are often overlooked. I'm curious, if you're a partnership manager in a SaaS company, how would you explore legacy or existing channels that not many people explore, like distributors or system integrators? How would you approach that?

If you're interested in going global, that's a great place to start. Often, many large companies outside of the United States will need to make sure their software vendors meet certain requirements. Some of that could be an invoice that's local and issued by a local organization. There may be a language barrier or currency barrier, and these types of organizations can help you navigate these procurement complexities quickly. They can also link you up with local partners. If you don't have people on the ground, they do and can help identify the relevant people you should work with in their area quickly. For SaaS companies, it can help unlock new markets quickly and remove barriers.

Let's talk about the difference between newer, more exciting channels like app marketplaces. Every VC and a lot of companies and people in the channel talk about marketplaces and the exciting new energy going into them. However, system integrators or VARs are not getting as much attention. Can you touch on how these types of partnerships are evolving and where you see them going. If you look in the last 10 years, what are the things that are emerging and declining?

With the emergence of AWS and GCP, a lot of these organizations had heavy expertise in helping clients manage infrastructure, but that's slowly going away. Everything's running on the cloud, you have cloud platforms and SaaS products on the cloud, and the level of complexity isn't what it was 20 years ago. However, some organizations still want to avoid being distracted by things that are not their core business.

An auto manufacturer wants to make cars and that is their sole purpose for existing. Having armies of people managing IT environments around the world is probably not going to be interesting to their executive team. If an organization external to them can do that better than their company, that's always going to remain attractive, regardless of how the technology changes. Therefore, there has to be a bit of respect by some of these new partnership models that you need to do both. Yes, you do need that app marketplace as well, because particularly within small to medium businesses and midsize enterprises, that will be okay for them. If you want to crack large enterprises, often some of these legacy structures are going to remain attractive to them. Working with system integrators, consulting firms, they're not going anywhere and they've got a reason to exist. So you've got to be respectful of that.

here has to be a bit of respect by some of these new partnership models that you need to do both. Yes, you do need that app marketplace as well, because particularly within small to medium businesses and midsize enterprises, that will be okay for them. If you want to crack large enterprises, often some of these legacy structures are going to remain attractive to them. Working with system integrators, consulting firms, they're not going anywhere and they've got a reason to exist.

Very good point, talking about consulting. I was surprised to see McKinsey hiring a first CTO from Microsoft. And then before that, they acquired a Salesforce implementation company. Generally speaking, consulting as a channel seems to be overlooked. I think Atlassian built a pretty sizable business with the help of people consulting on top of Atlassian software, and then Airtable and Asana, and many others. How do you see consulting companies changing their business model, what is happening there?

They've always been focused on outcomes. Often when they offer a solution to a problem, a company is looking to solve their inventory, which is really important for their balance sheet. They will start with that problem and work backwards to see which technologies are enablers. You need to make sure they're aware of your technology. If your technology can solve the inventory problem, I use that as an example, but a CFO will be really interested in reducing their inventory. That could be a strategic initiative, especially with everything that's going on with supply chains. Getting these consulting firms to analyze the elasticity of inventory and what tools are out there that can help predict that is important. If you're in the business of selling software that can help them achieve those outcomes with their customers, get out there and let them know.

How do I get McKinsey or Accenture to know that I exist? How I get in their consideration list?

Often there will be a practice manager in charge of a particular technology stack or vertical, like someone running supply chain expertise within McKinsey. You may want to get in touch with them or let them know what you can offer in that space.

One interesting point I’d like to discuss with you is that they have balanced experience between enterprise sales and partnerships. How do you see partnerships intersect with product-led growth and how sales come into the picture and how they all interact at scale?

Ultimately, you're looking for feedback on your product. We at Atlassian ran partner councils and received a lot of feedback from our partners. Our partners were both sitting in many of our services rooms and were also featured on our app marketplace. We were getting feedback on our product at a technical level because they were building on it. They were also giving us feedback on what they were seeing out there in the field when they were delivering those products to their customers. It is extremely powerful to make sure those feedback loops are strong between your partner community and you as a vendor. They may be seeing things that you never thought of out there in the ecosystem. It could be strange things like, "Hey, your product doesn't render very well with the language pack that you've deployed to my region. The characters don't look the right way on the screen." It could be the latency of a product being delivered in their region, or a multitude of other things that you're not seeing at headquarters level. That's why it is important to keep the door open to them and have a structure for them to be able to share feedback with your company.

In terms of adding sales and partnerships into a product-led organization, when do you think is the right time to maybe deploy or explore this channel?

I don't think they're binary. I think they need to work together. If there's a sales team within an organization working to achieve a goal with a customer, and a partner is also working there, they need to work together. The product lead growth component, there could be some candid conversations that a customer may be more willing to have with a partner simply because they do not represent the vendor directly. You may get some very direct feedback coming back to you with things that may not have been said. It may work the other way as well with a customer willing to unlock with the vendor directly. It depends on the situation. That's why I feel these things are not completely apart.

My last question is about the future of partnerships. You have extensive experience in partnerships and sales of different facets of technologists. What are you excited about in the next three to five years?

There are some bleeding edge technologies out there that have challenges we've never seen before. For example, the Open AI initiative with some of the datasets that will be pushed there. Maybe not immediately, but we'll see things materialize. There will be a need for strong capability from experts who can show companies how to use this bleeding technology within their organization to become efficient. In the next five to 10 years, there always seems to be a paradigm or something hot in technology. A few years ago it was 3D printing. We went through the crypto and blockchain, when people were scratching their heads how it will impact enterprise. I don’t think it’s dead, but what is commercially viable will come out. Currently, it seems to be AI and maybe we’ll go through the same thing.

Having companies that can pair the commercialization of new technology will be interesting. You won't need to be doctorate level, but you'll need to be an expert in finding a place for these new technologies in organizations and showing a CIO, CFO, or CEO how it can help them grow their business and become more efficient to deliver new products. It's an exciting industry to work in because something is always changing. We will see over the next five years if this technology can be commercialized on mass and become something tangible. There will be companies that will work with customers to help them deliver these visions.

It was a great session today and I learned a lot personally. How others can connect with you?

If you have specific questions, you can connect with me on LinkedIn and I'll be happy to help.


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