Hard Truths about Soft (ISV) Partnerships
Gemini's idea of a stressed partner manager left holding the "Another Great Meeting" coffee
In the fast-moving world of B2B technology, the term "tech partnership" often causes eyerolls. It’s an endeavour that’s frequently branded as “fluffy,” a months-long coffee schmooze that looks great on a slide deck but struggles to deliver a clear, demonstrable return on investment.
In cases when that is remotely true, it’s only because we misunderstood what this can do in context of our goals, how to build a program, and then how to execute it well—and that is a huge miss.
Having built tech (mostly software) partnerships for over two decades, I’d like to offer some perspective and help CEOs, CROs, and Biz Dev folks to stop tripping up on the way to success in ISV/tech partnerships. I'll briefly cover:
Common challenges
New challenges with Gen AI
Why it's worth it
A recent case study
Broader learnings
It doesn’t have to be this hard
We’ve all seen the LinkedIn posts: a triumphant photo, someone with a mic, two executives shaking hands, the caption declaring a "great meeting" and a new "strategic partnership." But the news cycle is short, and the initial signing is merely the starting line. What endures? The answer must be measurable customer value, translated into profitable growth.
Here a few common challenges that make ISV partnerships difficult to pull off:
Demonstrable value. A reseller can point to sourced leads; a GSI can chaperon you to that F50’s annual planning exercise; a cloud provider can do a bit of both and also boost your sales efficiency via Marketplaces. But tech partnerships often struggle in proving value to the core business, specifically because of their strategic and product nature (e.g., proving causality between an integration and revenue). As a result, in some cases this team gets moved into the product org—often creating a spiral of disconnection from the field and from tangible success metrics.
Asymmetry of size. For an early-stage startup, this is a painful reality. When approaching a larger ISV, the question is often chillingly direct: “Why should I divert my limited resources to build this integration with you?” Overcoming this requires a razor-sharp focus on a well-defined, immediate customer problem or market opportunity that the larger partner cannot ignore, nor tackle on their own.
The Frenemy problem. I have watched too many partnerships built on ‘co-opetition’ descend into outright conflict. As the parties’ product offerings and ambitions inevitably evolve and expand, their once-complementary features can begin to overlap and compete. This requires honesty but also continuous, proactive renegotiation of the relationship, to ensure that (whenever possible) the ‘here & now’ customer value from the combined solution remains at the center, rather than some future scenario. (There are also some important defensive actions that I will get into below.)
Gen AI: hold my beer
Adding to this complexity is the strong headwind of disruption driven by Gen AI, as I covered in recent posts and articles (like here). For example:
Economies of scale are extreme, and in favour of AI giants. This can decrease the potential value of the whole effort.
Rapid feature development by AI giants, and specifically foundation model providers, can sometimes be an existential threat to an ISV, putting accelerated emphasis on revenue-driven partnerships and increasing risk on IP drift.
The growing use of Field-Deployed Engineering (FDE) is fundamentally changing how integrations are built, challenging trusted ways of building a tech partner program.
Enduring reasons to press on
Despite common and AI-related challenges, the strategic ISV partnership remains a powerful and often necessary lever for growth.
Customer and pipeline enablement. A partnership could unlock new customer segments and accelerate existing pipeline. The tricky part is documenting the product need in detail and having the conviction that the customer will still be there at the end of the development cycle. In this regard, the dynamic FDE model is great news, enabling tight validation and deployment with the customer.
Brand and product reach. Partnering with a market leader can confer credibility and broaden brand exposure and reach. It can also an ISV to offer a richer, more complete feature set without having to build every component. Finding the balance between what needs to be done (GTM-driven) and what must be done (strategy-driven) in the product roadmap is the hallmark of the best companies.
"Better Together" GTM. When two solutions are truly complementary, they enable a powerful story greater than the sum of its parts—whether it’s a two-party sale or if it includes a services or cloud partner. This is a Biz Dev gold standard!
M&A potential: while it shouldn't be a main objective, a deep tech partnership may eventually result in an M&A outcome.
A recent case study
Reflecting on a recent project, in which I helped a Series-A ISV accelerate its tech integrations play, some important reminders stand out. (This client did a great job! My comments are based on conversations with dozens of its current and potential partners.)
Strategy- vs. GTM-driven development. ISVs must be fully aligned and bought in (CEO-to-Jr. Engineer) on the balance between the two. For strategic, foundational platform work, I find that the classic Product + Engineering is often best; for rapid, customer-specific integrations, FDEs are a great emerging model; and a Labs team can be an effective hybrid. The key is establishing tight, impactful communication loops to quickly inject real-world customer learnings back into the core roadmap.
Customers can be fickle. Customers negotiate, and in addition they often don't know their future needs, or your future roadmap. For GTM-driven development, especially if customers are not being clear and where an FDE resource isn't viable (e.g., the early stages of a New Sale opportunity), we could instead focus on a use case that reliably represents a customer need in a specific vertical and/or with a certain category of partner solution, and then iterate and test with Sales.
Bottlenecks can be dynamic. Have a shortage of partnerships? make a push to recruit, but plan to tackle an engineering bottleneck if things go right. Agility and coordination in the cross-functional team is key, as is proper backlog planning (as in, things that go on the backlog are ones that we actually want to build).
Develop an approach for frenemies. We need to enable collaboration now, but be mindful of potential conflict later. As soon as is possible, build a program leaning on self-service, contained resources that empower the partner to build the integration themselves. Relay less on snowflake engagements, and on unmonitored access to production instances, especially without proper risk analysis and qualification.
Hold GTM colleagues accountable. Sales should tie the value of development to a $-pipeline number, and Sales leaders can find creative, visible ways to hold them to it—whether it’s a fun, visible Oscar/Razzie ceremony at the QBR for those who truly understand their customers’ needs, a time-limited commission accelerator, or other incentives (please, no SPIFFs...).
Sales enablement. There is never enough. Say it three times, then repeat it three times again next month. But it has to be simple, tangible, and actionable.
Final thoughts about partnership execution
I like to think of the role of Business Development in all this as the all-knowing deep-lying playmaker in the Pirlo/Xavi/Kanté mold. Our job is to do the heavy lifting of a program that minimises friction and maximises potential for all stakeholders around us, and to excel on our own tactical execution while making it look easy. No ground game, no win.
Finally, I’ll offer one thing that I’ve seen rarely work (change my mind!): structured, predictable co-sell between ISVs. Internally, operationalizing it in rev ops and trying to drive Sales behaviour can be a nightmare, even with tools like Crossbeam. Externally, partners are not resellers; they are ISVs that want to sell more of their own product, faster. If an ISV partner focuses primarily on co-sell, it could be because they're immature, confused about their identity, or simply in financial trouble. BUT! This is where that 3-party "Better Together" story with a Reseller, GSI or CSP could really change things.
The path to a successful ISV partnership is paved with good intentions. To navigate it, you need commitment to the goal, honesty about the risks, a relentless focus on measurable customer value, and the tactical brilliance to turn an abstract idea into a revenue-generating reality.
Let me know if this strikes a chord, and if I can help. Good luck!
