Partnering with Hyperscalers as an ISV: 5 Tips to Get Started

As an independent software vendor (ISV), you're entering a pivotal phase if you're considering partnering with hyperscalers like Microsoft in the upcoming year. This decision can significantly elevate your business capabilities and market reach.

In this guide, Juhi Saha and I will walk you through the essential steps to get started, ensuring you’re fully prepared for this venture. Also, don’t miss our previous MasterClass webinar, where we dove deeper into Microsoft's ISV partner program with Partner1's CEO and co-founder, Juhi Saha!

While there's a lot to prepare, working with hyperscalers as an ISV offers you access to vast resources and infrastructure, enabling scalability, enhanced technological capabilities, and expanded market reach for your future growth. Let's get to it.

1. Get executive buy-in from the start

If you're considering a partnership with a hyperscaler, your journey begins with securing executive buy-in. From the top, you'll need to communicate an organization-wide commitment to growing and nurturing this relationship.

Partnering with a hyperscaler will demand a considerable investment of time and resources. Ensure your leadership is committed for at least two years to invest in this hyperscaler ecosystem. This commitment is crucial to maximize return on investment (ROI) and to foster a strategic, long-term partnership.

To secure executive buy-in, set clear, achievable goals that align with your company’s strategic vision, such as expanding market reach, gaining mindshare, increasing pipeline and revenue growth or enhancing technological capabilities. Also, conduct a comprehensive risk assessment. Identify potential challenges and obstacles that could arise from the partnership, such as integration complexities or shifting market dynamics, and plan effective mitigation strategies. Make a business case for partnering with a hyperscaler, leveraging tips and the examples here.

This dual focus on goal setting and risk management ensures a shared understanding of the partnership's aims and prepares your organization to navigate the partnership effectively and proactively by securing executive buy-in from the very start.

2. Assess your current and future needs

Begin by conducting a thorough review of your existing technology stack, applications, and growth goals.

From a technical perspective, evaluate your current applications and infrastructure's performance, scalability, and integration capabilities. Consider any limitations or bottlenecks that could hinder growth and how a partnership with a hyperscaler can address these issues, for example, with access to new tools like AI services.

This review should also include an analysis of your software's compatibility with the hyperscaler’s platforms and services, ensuring smooth integration and optimal performance in the new environment. Most hyperscalers require that your solution be built at least partially on their platforms, so carefully review technical requirements for partnering with different hyperscalers.

Furthermore, project your future business needs by analyzing market trends and potential customer demands. This forward-looking approach can help you anticipate changes in technology requirements. Consider how the hyperscaler’s resources, such as advanced analytics, AI capabilities, or global infrastructure, could support your evolving needs. Also, consider your go-to-market strategy - are you looking to expand into new segments? New industries? New regions? Does the hyperscaler you want to partner with have a foothold in these markets that you could leverage for expansion?

Involve key stakeholders from different departments in this process. Input from your executive team, development team, sales, marketing, and customer support can provide a holistic view of your operational and customer needs and secure stakeholder buy-in by aligning their success with your goals for your hyperscaler partnership.

3. Determine your budget for scalable, sustained growth

When planning your budget for a partnership with a hyperscaler, start by analyzing the direct costs associated with the hyperscaler's partner program. This includes not only the base fees for cloud usage but also variable costs that may accrue based on the usage level, as well as fees for various programs and for using their marketplaces. Don't forget the indirect costs that will help you best leverage the full potential of the partnership.

Potential costs to account for include:

• Base fees for cloud service usage
• Variable costs based on usage levels
• System integration and modification expenses
• Team training costs for new technologies
• Marketing and sales expenditure for marketplace leverage
• Ongoing technical support fees
• Maintenance and system upgrade costs
• Developing and maintaining a partner team to support your hyperscaler partnership
• Tools to support operational aspects of managing your hyperscaler partnership

By accounting for these costs from the beginning, you can ensure that your budget is well-aligned with the immediate and long-term needs of your partnership with a hyperscaler.

4. Research the program details and upcoming changes

It's time to go beyond a surface-level overview and delve into the specifics of each hyperscaler's partner program. Most have program tiers, typically offering a different set of benefits. Knowing these can help determine which level aligns best with your business goals. Understanding the criteria and steps required to unlock the benefits offered at each tier is crucial, as this can significantly impact your growth and success within the ecosystem.

These partner programs are often dynamic, with changes and updates occurring periodically. Staying informed about these changes is vital, as they can influence your strategic planning and operational approach. Regularly review official communications from the hyperscaler, participate in their webinars and training sessions, and join relevant communities or forums.

This proactive approach not only keeps you updated on the latest program developments but also provides insights into emerging trends and best practices within the hyperscaler's network. By staying informed and adaptable, you can ensure that your partnership strategy remains relevant and effective in the ever-evolving landscape of cloud computing.

Don't forget to check out our previous MasterClass episode: "Navigating the Microsoft Ecosystem: Unlocking Lucrative Partnerships for ISV Partners"!

5. Invest in your team and technology

Finally, it's time to invest in your team and technology. This may include hiring or training partner managers, marketers, and revenue operations staff. Ensure your product and tech teams are on board with the partnership objectives.

For operations, you'll need systems to make the process of partnering as seamless as possible for your sales and marketing teams. For this, use a PRM like Impartner that streamlines and automates your end-to-end partner management tasks.

If you want to shorten your time to revenue, it's also best to have a guide who can help you navigate each hyperscaler's ecosystem so you don't waste time, personnel, and money trying to figure out what works, what incentives and support are available, and whom to connect with at the hyperscaler for additional growth opportunities. That's where working with a company like Partner1 can be incredibly valuable.

Partnering with hyperscalers like Microsoft offers a transformative opportunity for your ISV business. By following these steps, you can strategically position your company to leverage the vast resources and opportunities such partnerships offer and increase your top and bottom-line revenue at an accelerated pace.