Delegates to the African Progress User Conference in Pilanesberg this week heard that a growing number of software companies are forming allegiances, which industry experts see as an ideal way of growing market share and reaching new markets.
These partnership trends tend to take place between larger and niche companies, says application tools provider Progress Software MD Rick Parry. "I think software companies are coming together to a certain degree, and it is most often companies with more financial clout partnering with niche companies."
Parry adds that partnerships have played a key role in the company`s business strategy. "Progress was formed with partnerships in mind, and you will find most of our partners have a specific niche. We believe that our competitive advantage is that we understand our markets. Domain expertise is the key. We absolutely don`t believe that one size fits all."
Progress manager of product readiness Pat Bonser says these partnerships are mutually beneficial. "The advantage is that it opens up bigger markets to smaller companies - at Progress some of them have doubled their sales, and Progress makes money of their success."
Parry confirms these partnerships are made on purely business grounds. "These are not charity cases. We want our partners to do well because we make money when they do."
Jaco Els, engineering business consultant at consulting company ILC Lerumo, also acknowledges the trend as a possible way forward for companies. "Partnerships between software companies enable them to provide a better product, and I believe consumers will benefit as well."
Parry adds that these partnerships do not adversely impact market competition. "There are two aspects to consider. On the one hand, we are recognising the strengths of prospective companies, and seeing what beneficial results can be obtained by bringing these points together. On the other hand, if companies want to enter a market, we will encourage that, even if the company will be in competition with another.
"For example, Progress is currently looking at bringing UK company Epicor into the local market, and they would be competing with some of our partners. Competition is a good thing, and we promote it."
Software development company MIP Holdings CEO and chairman Richard Firth says the benefits of partnering with larger companies are numerous." We believe they can offer us the fundamental advantage of a stable database.
"It also reduces the total cost of ownership. From the supplier`s view, it makes for better relationships with partners because everyone has risk. Also, there are stable cost to income ratios, and stability - not just to us, but to consumers as well."
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