by Richard Fouts
“In the traditional sales model, deals are either won or lost when competitors sell to each other’s weakness. Such scenarios are why markets have been viewed for many years as battlegrounds, and why ancient books like The Art of War can be found on the bookshelves of modern marketers and salespeople.
While the traditional sales battlefield still typifies how a great deal of business is acquired, a model where competitors cooperate to achieve mutual goals, is not only becoming more common, it has proven to blast old myths about winning and losing.
Coopetition, or cooperation between competitors to address a higher volume of marketing and sales opportunities, represents a go-to-market model that many companies, including Siemens, have found beneficial.
“Competitors team up for several reasons,” says Mark Straton, Senior Vice President of Marketing for Siemens Enterprise Communications. “A combined solution responds to the customer’s desire for best of breed solutions and one stop shopping. And coopetition delivers a more distinct value proposition than competing vendors provide individually. And, customers really don’t care if the integrated solution is comprised of offerings from companies that compete in certain markets for the same customers. A case in point is our relationship with Genesys.”
Another example? Microsoft. Though Siemens competes with Microsoft in the Unified Communications (UC) market, the two companies cooperate in joint solutions because customers want to realize the improved enterprise workflow and business process optimization offered by a combined Siemens-Microsoft solution.
Siemens and Microsoft share a complementary vision and market position in Unified Communications as demonstrated in their respective leadership positions held in the Gartner 2006 UC Magic Quadrant. The two companies enable sales opportunities of UC solutions through joint marketing activities; for example, Siemens has been a sponsor at Microsoft product launches.
Similar go-to-market arrangements exist with AT&T and British Telecom (BT). Says Diana Meacham, Vice President for Global Alliances at Siemens Communications, “It’s important that our solutions and channels align with the buying behavior of our customers. If they want best-of-breed, integrated solutions from distributors or carriers, we need to be part of the solution. Otherwise, we’ll be left out of the game.”
Meacham adds: “We are interested in going-to-market with carriers because our portfolio of solutions fits well when customers ask for an SIP-enabled network. We can add value to a competitor’s solution and it supports our mutual goal to increase market share. Go-to-market relationships with competitors and non-competitors alike, strengthen our overall value proposition with broader solutions and allow us to expand our presence.”
Meacham raises another motive for coopetition: to accelerate market penetration in certain verticals or geographies. The Microsoft example cited above was designed to target growth in the US, UK, Germany, and Switzerland.
Coopetition also supports Siemens’ channels strategy. “Our sales organization has traditionally been direct-centric. That is changing as we realize more revenue from indirect channels,” adds Meacham. “Our joint solutions are defined by a handful of targeted alliances that are global and focused on the key capabilities we need to succeed in some of our target markets. The indirect channel, including those relationships with competitors, has helped us drive local business in several countries.”
Other significant examples of coopetition exist with large, global service providers and systems integrators like IBM and Deutsche Telekom.
Last year for example, Siemens licensed elements of its OpenScape capabilities to IBM. While IBM is a large customer, and competes with Siemens in some markets, the two companies will work together to design and deliver Unified Communications solutions to the marketplace.
The arrangement is win-win. Garry Reichert, vice president, Siemens IBM Alliance says, “Together, Siemens and IBM give IT managers a way to decouple their unified communications investment from PBX infrastructures. Our joint solution lets them drive decisions based upon business needs versus PBX capabilities. We’ve joined forces to create the solution, now we’re talking about teaming up for more specific marketing and sales activities.”
Open standards are another reason coopetition has become more the rule than the exception in many large customer procurements. “IBM chose Siemens OpenScape technology because of its interoperability with multiple PBX systems and its track record of innovation and vision in this field, ” says Bruce Morse, vice president, unified communication and collaboration at IBM. “Our companies share the goal of developing extensible unified communications solutions that are based on open standards and integrate seamlessly into business processes.”
How are such go-to-market relationships with competitors evaluated?
“Business opportunities are what initially brings companies together,” says Reichert. “While the IBM relationship is still in its early stages, we have established a solid pipeline of new sales opportunities, which validates the strength of the solution and serves as an early indication of the success of the relationship.”
Reichert also talks about other metrics in alliance formation with global systems integrators. “We measure the resources the partner has directly applied to our joint solution; for example, the number of sales and technical support people it has trained. We also ask partners to commit marketing resources for demand generation, awareness building and other sales promotion activities. At the end of the day, it’s about bilateral commitment and investments in staff, solution components, training and enablement.”
Meacham offers a concluding remark: “Our go-to-market strategy is continually fine-tuned to reflect how customers evaluate and acquire technology solutions. This is evidenced by our investment in indirect channels and relationships forged with solution providers, including those that are competitors in certain markets.
“Our buyers look to system integrators and the carriers for solutions to complex problems. Cooperative solutions deliver a lower cost of ownership and a unified user experience. They protect the customer’s previous investments, increase productivity and integrate more capabilities into a comparative solution that lacks the combined impact of those that represent best of breed. Moreover, if we can take complexity off the customers plate with coopetition, and deliver more performance and quality in the process, it creates a win-win for everyone.”
Tags: channel strategy, collaboration, communications, IBM, sales model, siemens, UC, unified communication, vendor
