Consider how effortless it is to play Spotify’s music on an Amazon Alexa. It doesn’t take a series of manual steps, just a simple voice command. Your time to value is seconds… literally just a handful of words. Or think about how Grammarly autocorrects your typos in Gmail without you having to open the Grammarly app in a separate tab. You get your email out quicker and it’s mistake-free.
These companies are known as technology (tech) or “integration” partners.
Tech partners build integrations to exchange data between one another’s products, helping users automate processes and giving them a more valuable product experience.
When your integration solves customers’ use cases better than other available options in the market, they’re less likely to leave you or seek the next shiny SaaS tool.
In this Toptal article, Josh Chapman, who has since moved on to become a Managing Partner at Konvoy Ventures, uses a study to explain how customer retention “can increase revenue over an 18-24 months period by as much as 80%+.”
Successful tech partnerships can also lead to:
- Go-to-market opportunities like how Slack and Atlassian launched 11 integrations in two years with about a million active monthly users.
- Higher product adoption like how Otter.ai’s Zoom integration helped Otter.ai increase usage of its real-time voice transcription service by more than 5X.
- Competitive advantages like how Vidyard, an online marketing platform, one-ups their competitors by easily integrating with their customers’ CRMs.
- Strategic acquisitions like when Intuit acquired TSheets for $340 million or when DropBox acquired HelloSign for $230 million.
But keep in mind, strong tech partnerships don’t just happen, they’re built and cultivated with intention. They require thoughtful decision making, time, money, trust, and a customer-centric mindset.
So what else is there to know about this partnership category? Quite a bit, actually, so buckle up! We’re going to deconstruct tech partnerships from top to bottom, and define what they are, explain the role they play in partner ecosystems, and share examples of the companies that are nailing them.
- Defining tech partnerships
- How tech partnerships came to be
- Types of tech partnerships (plus examples)
- Are tech partners the new channel?
- Determine your readiness for a tech partnership
- More tech partnership resources
Defining tech partnerships
As we outlined in our Partner Playbook, a technology partnership is when two or more companies integrate their products with one another. This can include sending data back and forth, creating new workflows, triggering events, enriching data, and creating go-to-market strategies.
Unlike channel partnerships, which involve a “vendor” that makes the product and the “partner” that sells it, technology partnerships are bi-directional. Both companies are vendors and partners, and will typically refer to one another as a partner or technology partner, or in some cases, an independent software vendor (ISV).
Integration partners, marketplaces, app stores, and plugins are all forms of technology partnerships.
How do tech partners make money? It’s not always clear cut, but we’ve identified eight monetization tactics, including revenue sharing, charging partners flat fees, charging partners API usage, and more.
When an integration is built and ready for prime time, tech partners will co-sell and co-market to one another’s leads, opportunities, and customers to drive revenue. Or, tech partners use a series of integrations to increase retention—after all, you’re less likely to cancel that SaaS product if it already works with all of your other tools.
Customer retention, number of integrations, partner-influenced revenue, and ecosystem qualified leads are KPIs for evaluating success.
How tech partnerships came to be
In the past, software was typically an all-or-nothing purchase: individual software programs and hardware were sold as a package or bundle. These solutions were often siloed and required expensive licenses, installation, hosting, maintenance, and support from dedicated IT teams.
However, thanks to SaaS and the cloud, software has been unbundled and, thus, more cost effective. It’s like moving from a fixed tasting menu to à la carte. Using SaaS products, customers can access applications online without having to deal with the installation and infrastructure costs typically associated with “traditional” software.
The rise of cloud computing and the API economy has also made it faster and simpler for developers to build integrations for applications (we’ll get to the API economy in a bit).
Now, customers can customize their tech stacks to their liking and benefit from integrations that support automated workflows and processes.
Increasingly, your tools will send data to each other, making it faster and more efficient for your team to do their jobs—all made possible by application programming interfaces (APIs).
The API economy
There are more than 20,000 APIs on the web underpinning the apps we use every day. These APIs act like messengers, helping software applications, systems, and devices talk to one another and share data.
“You have to find your wedge into a market and APIs are that wedge that let you still operate with everything else,” says Somrat Niyogi, Head Of Business Development at Gusto.
This shift has enabled companies to build upon one another’s platforms and grow partnership ecosystems. A partnership ecosystem is a company’s network of partners and integrations with other companies.
Why build a partnership ecosystem? Because on your own, you can’t possibly reach all your potential customers, nor can you meet all their needs and wants. You need a network of partners to help you do it.
Companies with vast partnership ecosystems—like Salesforce (1750+ partners), Google (2600+ partners), Microsoft (750+ partners), and HubSpot (2,000+ partners)—exert influence in the overall ecosystem because they’ve gained market share and credibility in their spaces.
Other companies, that are smaller or less established, can build partnerships with key ecosystem players and use their reach to deliver more valuable products, acquire more users, and enter new markets.
Our CEO and co-founder Bob Moore says it best 👇
Types of tech partnerships (plus examples)
We’ve covered the macro view of tech partnerships. Now let’s get into the nitty-gritty so you can learn how to spot integrations in the wild.
Integrations, app stores, marketplaces, plugins, add-ons, and extensions all fall under the technology partnership umbrella. Here are some examples of each.
An integration supports data transfer between two or more products. Integrations can range from a simple data connection that happens “behind the scenes” to a more complex interface and workflow that you can access and manage via one of the partner products.
All the examples in this post are forms of an integration.
Zenefits, a people operations platform, and Human Interest, a retirement solutions provider, built an integration for the small and medium-sized business (SMB) market.
The integration enables Zenefits’ users to easily enroll in Human Interest retirement plans, set up contributions, and maintain compliance with reminder notifications.
Zenefits users can sync their Human Interest account to automatically send retirement plan data to their Zenefits’ accounts.
Let’s say you decide to update deduction or contribution amounts for your 401k in Human Interest. Those updates will instantly flow back to your Zenefits account, keeping your retirement information accessible and up to date.
Segment, a customer data management platform, captures data from all your customers’ cross-platform touch points (e.g. website, social media, ads, email) and then pushes that information to your preferred destination, like a marketing automation or email tool.
The Segment-Kissmetrics integration pushes Segment data to Kissmetrics so users can take action. This could include sending targeted emails to customers, triggering automated reports in Kissmetrics, or helping users analyze or segment audiences based on certain behaviors (e.g. who viewed an item vs. who abandoned a cart) or characteristics (e.g. trial users vs. customers vs. churned customers)
For example, when you abandon an online cart, Segment will capture that data along with your other interactions, and then push that information to Kissmetrics. From there, Kissmetrics will fire off an automated email reminding you to complete your purchase before items run out of stock.
The integration supports a seamless flow from data to action to engagement!
PandaDoc users can send automatic updates and reminders to Slack channels and share updates via Slack’s direct messages to keep document workflows from stalling. Perfect for when you and your manager need to collaborate on a time-sensitive client proposal.
PandaDoc users can also trigger rule-based notifications on document statuses (e.g. sent, viewed, signed) so team members don’t need to leave Slack to find out where a document is in its lifecycle.
Marketplaces or app stores
A marketplace or app store is where vendors can sell software applications, add-ons, extensions, and consulting to buyers.
Salesforce AppExchange is an enterprise cloud marketplace that offers more than 4,000 integrated solutions and services for Salesforce customers who want to extend their platform.
It is a mega marketplace, featuring 80,000+ customer reviews and driving more than 8+ million installs.
The marketplace offers paid integrations like Snowflake, which helps Salesforce customers instantly pull relevant data points from their Snowflake data warehouse to enrich Salesforce data and reports.
You can also get free integrations like Opportunity Merge, which saves you the headache of manual data cleanup by automatically merging duplicate opportunities for accounts—keeping your Salesforce data cleaner and more accurate.
Did you know Crossbeam is on the AppExchange, too? Check us out to get your partner data pushed directly into Salesforce.
Bullhorn’s integration with IntelAgree, an AI-based contract lifecycle management platform, offers a bi-directional data sync. This allows users to track and manage staffing contracts for companies and job placements directly from Bullhorn.
Users can see IntelAgree data like contract name, type, status, effective date, and expiration date in Bullhorn. When creating a new contract, users can automatically populate drafts with existing data (e.g. payment terms or fees) from Bullhorn—a major time saver for a salesperson who’s on the go
Plus, staffing teams don’t need to worry about inconsistencies between what’s in Bullhorn’s applicant tracking system and what’s in their executed contracts. Once contracts are fully executed, users can not only access the signed PDFs, but they can also see the final agreed upon terms directly in Bullhorn.
Procore customers can use integrations like Joyne, a takeoff and estimation software tool. Users can import blueprints from Procore into Joyne so they can measure and markup the materials needed for a construction project, along with estimated costs.
Plugins, Add-ons, and Extensions
Plugins, extensions, and add-ons are a basic data connection that enhance an existing piece of software. They are often single-function and support a specific workflow.
Moz and Chrome
MozBar from Moz makes it easy to conduct SEO research while using Chrome. When viewing pages or search engine result pages (SERPs), the extension provides SEO metrics, like authority scores, link metrics, page elements, and more.
Bubble’s built-in & community-created plugins
Bubble doesn’t need to build e-signature capabilities for its no-code platform, instead, it can offer its DocuSign plugin to customers. The plugin allows Bubble’s customers to include DocuSign’s functionality so that app users can easily create, edit, send, and retrieve signed documents.
Bubble’s ShipStation plugin also comes in handy if you’re building an e-commerce site. If a user places an order, Bubble will automatically send order data to ShipStation.
One of the largest plugin collections on the web, WordPress offers 57,000+ plugins with new ones added daily. By offering a directory of free and open-source plugins, WordPress helps its customers enhance their blogs, applications, and websites.
For example, Yoast SEO, the #1 WordPress SEO plugin, helps you keep on top of all the SEOs do’s and don’ts when publishing content.
It offers functionality like SEO analysis, readability analysis, and recommendations on how to improve content for search engines (i.e. optimizing keywords in page titles and meta descriptions).
Are tech partners the new channel?
Tech partnerships open new doors for attracting, converting, and delighting customers. Partners serve as a distribution channel and, as OpenView Partners shares, help companies reach new users without having to invest heavily in new product development. This is why you’ll occasionally hear some folks call tech partnerships “the new channel”.
A winning tech partnership helps you:
- Increase product stickiness, making you harder to replace
- Bridge gaps in your product’s features
- Grow your customer base
- Break into new markets
- Improve customer retention
- Connect with more leads, opportunities, and customers through co-selling and co-marketing initiatives
Slack and Zoom: Two Peas in a Collaboration & Communication Pod
Slack and Zoom are a prime example of a tech partnership that works well for both companies as “the new channel”. The integration enables users to launch Zoom meetings in Slack with a single command.
Slack offers its users the reliability and performance of Zoom’s video capabilities, and Zoom offers its users the convenience of quickly launching a video call while using Slack. This is what makes their products harder to replace, or as some people like to say, “sticky”. Would you swap out a SaaS product that already fit in seamlessly with your existing tools?
The Slack-Zoom integration provides frictionless communication for more than 15,000 Slack teams a month. Assuming a Slack team ranges from ten to hundreds (or maybe even thousands) of people, that translates to a whole lot of users for Zoom, too!
They attract mutual users with a strong value proposition, deliver features that make collaboration and video conferencing seamless and simple for those users, convert those users into paying customers, and then deliver integration enhancements (e.g. whiteboarding and video breakout rooms) to retain those customers.
It’s a win-win-win for Slack, Zoom, and their users!
Determine your readiness for a tech partnership
If you and another company share overlapping customers and/or ideal customer profiles or target markets, that might be a ripe opportunity to build an integration. It’s a chance for both of you to deliver more value to your customers by improving their workflows, and in turn, their product adoption and customer loyalty.
Before plunging into a partnership, though, you should evaluate both your brand alignment and technical capabilities, and discuss what time, money, and resources you can dedicate.
Here’s what a tech partnership entails:
- Agreeing to create the integration with a partner
- Completing a technical buildout of the integration
- Writing all of the support documentation for both companies
- Writing all of the marketing language and material for the integration
- Reaching out to shared customers and encouraging them to integrate two products as part of the same workflow
The success of an integration depends on how well it solves your customers’ problems. If customers don’t use your integration and it doesn’t make their lives better, then all the hours and money you invested could be a total waste.
Looking for even more info to help you determine your readiness for a tech partnership program? Check out our blog post.
When tech partnerships go wrong
Embarking on a tech partnership isn’t for the faint of heart. It costs thousands of dollars and requires time from both partners’ internal teams. Here are some ways tech partnerships can turn sour.
You build an integration before your product and market are ready for it
Embarking on a tech partnership prematurely may increase your risk for problems like product adoption issues, partnership misalignment, and dissatisfied customers. Sometimes partner managers will rush into an integration for the sake of hitting a KPI for “number of partnerships created”. The integration usually winds up underutilized, resulting in lost revenue opportunities and a product team who no longer trusts the partner manager.
You build an integration on a hunch
A lack of data (or even worse, the wrong data), or a misunderstanding of your customers’ use cases can derail your integration. The last thing you want to do is build an integration that no one uses or it doesn’t produce a ROI. But with the right account mapping techniques, you can find data points—like overlapping customers and/or leads—to assess market viability.
You run into tech partner conflict
Tech partner conflict happens when partners aren’t co-selling effectively or they’re hindering one another’s sales opportunities (and they don’t even know it). Without visibility into partners’ pipelines, you could run into uncomfortable scenarios where your respective sales reps are going after the same prospect or customer. This is a big no-no in the partnership world! It hurts your partner relationships and makes you look bad in front of customers.
You lack teams and resources to support integrations
Partners’ need to lean on internal teams like design and development to not only build the integration, but also support it. You need dedicated teams and resources to monitor usage data, diagnose and resolve integration issues, provide timely customer support, and more. Plus, the last thing you want to do is make empty promises to a potential partner and then backout because you don’t have the resources—that’s a fast way to lose credibility early on in a relationship.
More tech partnership resources
Hungry for more nuggets of wisdom on tech partnership? We’ve got your back.
- How to Launch a Technology Partner Program
- How to Stop Channel Conflict and Tech Partner Conflict
- When is a Tech Partnership a Waste of Time?
- Monetize Your Tech Partnerships with These 8 Tactics
And if you’re looking for more tips, insights, and stories on partnerships, subscribe to our weekly newsletter!