Nintex Offers a Blueprint for the Channel Partner of Tomorrow

As cloud computing erodes traditional infrastructure sales, the question of what to do next has become an 800-pound gorilla in the room for many channel partners.

For about a decade now, large cloud providers have been giving their opinion, albeit self-serving: Channel partners must develop their own intellectual property (IP) for resale to survive and thrive in the channel over the next several years, they say.

It’s self-serving because it’s clearly motivated by their need to drive more utilization of their pay-for-consumption services. In a world where customers pay only for what they use, cloud providers need to drive them to use more and more.

The Blueprint

If there were a perfect example that provides a blueprint for transitioning, it may be Nintex, which helps its customers “accelerate business results by digitally transforming processes — thereby improving how people work.”

What many may not know is that Nintex began as OSB, an Australian systems integrator (SI) in 2006. Today, most probably think of Nintex as a provider of SharePoint and other workflow automation software; the company is an ISV, in other words. Its story offers a look at two potential paths that serve as excellent strategies for channel partners’ futures.

Nintex’s Eric Johnson

The first observation Eric Johnson, CEO of Nintex, shares is, “Number one, you’ve got to have some solution-oriented IP, then if you’re going to go all the way to becoming an ISP, make sure that you create that separation in your business.”

Nintex ended up selling off the OBS services business, but Johnson doesn’t feel that’s always necessary. He began with the end in mind, and how they got there can be very instructive.

“Nintex is the story of the company that went from delivering SI services, built some IP to actually make our projects better, and then actually built a complete software product separated over time to the actual pure standalone business it is today.”

Johnson says that the Nintex partners who are outperforming everyone else have a specific focus area around which they have developed re-usable IP and domain expertise. Being able to repeatedly deliver those reusable tools is clearly more efficient than having to build them from scratch each time for each client. “If you don’t have that in today’s world, what I see from partners is the folks who are completely bespoke, basically, they can’t win,” says Johnson.

These partners haven’t transitioned completely to become ISVs. Rather, they’ve established a beachhead for themselves upon which they can be the premier provider of relevant services. Simply put, they develop once and sell repeatedly, adding new revenue without corresponding cost every time they sell their IP to another client.

As an example, Johnson describes the Nintex experience, explaining that Microsoft provides SharePoint Online, Office 365 and all the other platform tools. Out of the box, they provide the tool kit the customer needs to be able to have an intranet and a portal for their business. In reality just about every company needs someone to customize them and many…

… partners do that work.

“The ones who are succeeding the most now,” says Johnson, “they’ve built their own accelerator, they have their internet in a box.” These partners enjoy a big start in the market, and they’re doing much better than the people who custom build. Their bids are too high, and the quality is lower than those who have prebuilt and field-tested solutions.

Johnson suggests that the factors that contributed to his company growing beyond that point to create a true, separate ISV business was to recognize where they had depth, create solutions that can be packaged and resold, build velocity and hit a bigger market in which they no longer deliver services, they build and sell software products.

Key Takeaways

Johnson encourages channel partners who make this journey to ultimately separate their services business from their product business, reminding that they are two very different kinds of businesses that require two very different kinds of marketing, sales and operational management.

Another key takeaway is for those readers who are by now thinking that they don’t want to code. They don’t want to be in the pure software development business, especially not custom coding for specific clients.

This is where the second path suggested by Nintex comes in.

Many partners have built thriving businesses leveraging Nintex workflow management products to create highly efficient operating environments for their clients. The most successful of them have formalized and documented methodologies for building these environments that can be used by many other clients with or without minor modification. Even though there’s no code, it’s still intellectual property.