Software Pulse
May 18, 2011

Stephen DentAvoiding Risks in Channel Partner Relationships

Even though the use of channel partners is increasing, some software companies are not fully reaping the benefits. Using the processes described in this article not only will arm you with decision factors and the necessary knowledge for eliminating the risks but also will help you create and sustain profitable relationships with channel partners.

By Stephen Dent, Partnership Continuum, Inc.

Many software companies are finding that their channel partners influence a significant percentage of their business growth. The need to deploy this growth strategy is becoming increasingly important with the uptick in switching to the SaaS and cloud models enabling software firms to enter new markets (industries and geographies). However, even though the use of channel partners is increasing, some software companies are not fully reaping the benefits, as in the following examples: (1) They use channel partners only on an opportunistic, ad hoc, deal-by-deal basis, not leveraging the full potential of this highly effective growth strategy; (2) They experience gaps in their anticipated return on investment (ROI) in channel partners.

Improving your company’s capabilities in channel partner management depends on three steps to mitigate risks: 1) avoiding the pitfalls in channel partner relationships, 2) knowing how to turn transactional channel partners into strategic partners and 3) managing the relationships so they yield more value.


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The Latest Software Business News on

News Summary: Gold Rush – Along comes IBM; Project Lightning flashes; angels go sky-high; TriGate beckons; and more software news of the week.

VC Activity: Palantir Technologies Raises $50M.

M&A Deals: Nuance buying Equitrac for $157M.

Executive Moves: New executives step up at AppAssure and other software companies.

Quote of the Week

In the last year, the amount of angel activity has shot absolutely through the roof, and the money is so fast and so easy. ... The round sizes are ending up so much smaller than when more experienced venture firms were investing. My bet would be that a few years from now, there will probably be a bloodbath of money lost by angels and inexperienced VCs.”

- Howard Hartenbaum, Partner, August Capital on Sand Hill Road

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