Increasing the Marketing Momentum Will be the Priority for Software Vendors' Alliances in the Region, Says IDC

April 27, 2006

Hong Kong, April 27, 2006 – According to IDC’s latest report on "Partnering and Alliances in Asia/Pacific: A Software Vendors' View on Managing Partners and Alliance" (Doc#AP323183N), IDC expects Asia/Pacific (excluding Japan) software vendors to place added emphasis on partnering and alliances, given the ongoing market consolidation, technology convergence and marketing realignment trends that are currently characterizing the region.

"In 2005, increasing company revenue was the foremost alliance objective of software vendors in the Asia/Pacific. For 2006, software vendors will heighten efforts to increase marketing momentum, especially in China and India, given the fundamental infrastructure expansion in these countries", says Farrah-Naz U. Susulan, Associate Analyst, Personal Systems and Services at IDC Philippines.

Based on a series of surveys and interviews with leading software vendors in the region, this study explored three fundamental alliance issues: performance, investment, and measurement. IDC sees a strong need for vendors to drive a more robust partnering and alliance network as they progressively deliver products and solutions that are more complex and challenging. However, cultural differences and divergent market conditions in this region provide key challenges for vendors and their partners to jointly improve their marketing blueprints in order to achieve better market traction and expansion.

From the survey feedback, sales-related metrics such as hitting revenue targets and keeping track of leads generated form the main indicators of a successful partnership and alliance. IDC observes that for partnership and alliance management to be effective, there should also be strong commitment from senior management.

Poor communication with channels emerged as the strongest inhibitor to successful partnership and alliances. Proper communications, through constant review and interaction, plays an important role as it was noted that the collaborative effort required in such partnerships and alliances often lead to conflicts. In addition, vendors are recommended to build customized partnerships and alliances strategically linked to objectives, while guaranteeing relevant compensation for alliance partners.

"Dealing with conflicts, whether preventive or corrective, is a crucial component of alliance management. Should there be any discrepancies in the provision of roles and responsibilities, clear lines should be defined and rules of engagements discussed without equivocation," Farrah-Naz adds.

Overall, IDC expects the year 2006 to witness more intense focus on recruiting partners from vendors selling into the financial services, telecommunications and government sectors, driven by the continued demand for strategic solutions from these sectors. Competing alliances will be the major challenging factor in 2006, as sales boundaries become more obscure due to realignment activities. IDC strongly recommends a constant flow of process review where vendors weed out weak partners, while focusing on building sturdy alliances.

For more information on this report entitled “Partnering and Alliances in Asia Pacific: A Software Vendor's View on Managing Partners and Alliances” (Doc#AP323183N), please contact Selina Ang at +65-6228-7717 or sang@idc.com. For press enquiries, please contact Holly Fung at +852-2905-4225 or hfung@idc.com.

Contact

Chong Chee Kian
Events & Marketing Executive
Tel: +603-2169-7521
Fax : +603-2163-5098
Email:ckchong@idc.com