The 80-20 Rule for Partnerships

For the ten years that I have been an analyst, all parts of our industry from buyers, sellers and analysts talk so much about the challenge of IT with the 80-20 rule. This is of course where 80% of budgets are keeping the lights on, and 20% is innovation and genuine investment.

I have long been  embarrassed by this. We have talked about it for 10 years, and whilst we might have moved the split from 80/20 to 75/25 and as an industry we still have not fundamentally changed the problem and pushed investment harder. That problem is for another day.

The focus today for my viewpoint is that the same rule applies to partnerships between IT providers. Currently if you were to draw a simple diagram/matrix of partnerships amongst even the largest 20 IT companies it would look worse and more complex than this.

80% of partnerships are typically functional and operational, as a result they are difficult to differentiate and extract deep customer value from. The genuine partnership value is in the 20% that remain.

SAP, Cisco, Microsoft, Oracle, et al all have relationships with the other major ecosystem providers and amongst themselves. This is of course aside from the literally thousands of smaller partners. Too many relationships are functional and operational; too few are strategic and focused on providing differentiated outcomes and capability and as a result deep customer value. One of the reasons for this is that these differentiated outcomes require long-term investment of capital and people. We need to see more of it, but our industry at times does not have the attention span to make it work.

I am going to be exploring this topic further soon as I develop and communicate with you some insight and thought leadership on the consolidation of traditional IT into Four Pillars, and what does it mean for all parts of the IT industry from buyers to sellers and all stops in between.

About capioIT - Phil Hassey

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world. +61422231793
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