What is a Horizontal Partner?

TL;DR

Horizontal Partner is a company that works with a vendor to sell products or services that can be used in many different industries. They don't focus on just one type of customer. In partner ecosystems, they help vendors reach a much wider range of businesses, growing their market and customer base.

Key Insight

Horizontal partners are crucial for vendors seeking to diversify their market footprint, as they effectively adapt and deliver solutions across a multitude of industries.

1. Introduction

Working with a vendor, a horizontal partner offers solutions applicable across many industries. Deliberately avoiding focus on a single market, horizontal partners instead provide products or services with broad utility to a wide range of customers. For example, an IT services company might offer cloud migration services, which many different businesses require. Similarly, a manufacturing partner could provide universal automation software, thereby improving efficiency in various factories.

Expanding a vendor's market reach becomes possible through horizontal partners. These partners frequently use a partner portal for deal registration, and effective partner relationship management actively supports crucial collaborations. This guide explores the multifaceted role and benefits of these partners, additionally covering effective strategies for working with them.

2. Context/Background

The complexity of partner ecosystems has significantly increased. Early channel models often focused on vertical markets, with vendors typically seeking partners possessing deep industry-specific knowledge. However, the emergence of many foundational technologies, such as cloud computing, cybersecurity, and data analytics, created solutions applicable across all sectors.

This significant shift created a clear need for partners with broad reach. Such partners could effectively sell to diverse customer types without specializing in a single industry. Consequently, horizontal partners became crucial for vendors seeking wide market penetration, ultimately helping vendors scale quickly.

3. Core Principles

• Broad Applicability: Solutions appeal to many industries, solving common business problems.
• Market Expansion: Partners open new customer segments, reaching diverse buyer profiles.
• General Expertise: Partners possess skills applicable everywhere, understanding universal business needs.
• Scalability: The partnership model allows rapid growth, avoiding niche market limitations.
• Platform-Agnostic Approach: Solutions often integrate with various systems, not tied to specific industry platforms.

4. Implementation

1. Identify Core Offerings: Determine vendor products with broad appeal, focusing on universal pain points.
2. Define Partner Profile: Look for partners serving multiple sectors, who should have general technical skills.
3. Develop Universal Enablement: Create training and materials for all industries, focusing on core product value. This is key for partner enablement.
4. Standardize Processes: Establish clear deal registration and co-selling procedures, using a partner portal for efficiency.
5. Create Flexible Incentives: Design commission structures for diverse deal types, rewarding market expansion.
6. Provide Broad Marketing Assets: Develop through-channel marketing materials that resonate with various audiences.

5. Best Practices vs Pitfalls

Best Practices: Offer generic sales tools: Provide materials usable by any industry. Train on core value propositions: Teach partners the universal benefits of your product. Simplify onboarding: Make it easy for partners to start quickly. Support diverse use cases: Help partners apply your solution broadly. * Use a robust partner portal: Centralize resources and communication.

Pitfalls: Assuming industry knowledge: Do not expect partners to know every sector deeply. Over-customizing solutions: Avoid building too many niche features. Complex pricing models: Keep pricing simple and transparent for broad appeal. Poor partner relationship management**: Neglecting communication with diverse partners. * Lack of universal partner enablement**: Providing only industry-specific training.

6. Advanced Applications

1. Global Market Entry: Use horizontal partners to enter new countries, as their broad reach simplifies expansion.
2. New Technology Adoption: Introduce emerging tech through partners, who can evangelize its universal benefits.
3. Platform Integration: Partners can build integrations with many third-party systems, expanding solution utility.
4. Managed Services: Horizontal partners offer managed services around your product, appealing to diverse IT departments.
5. Security Solutions: Cybersecurity partners protect many types of businesses, applying security best practices universally.
6. Data Analytics: Partners provide data insights to various industries, using common analytical frameworks.

7. Ecosystem Integration

Horizontal partners meaningfully impact many POEM lifecycle pillars. During Strategize, partners help define broad market segments. In Recruit, vendors seek partners with wide client bases. Onboard focuses on general product knowledge and processes. Enable provides tools for diverse sales scenarios. Market supports through-channel marketing efforts for broad audiences. Sell involves co-selling to various customer types. Incentivize rewards partners for expanding market reach. Finally, Accelerate focuses on growing joint business across many sectors.

8. Conclusion

Horizontal partners are vital for achieving market expansion. Bringing solutions to diverse industries, effective partner relationship management remains key to their overall success. Vendors must provide universal partner enablement, which includes broad training and versatile sales tools.

Using a partner portal significantly streamlines operations, assisting with deal registration and communication. Embracing horizontal partners ultimately allows vendors to scale efficiently, unlocking new growth opportunities across the entire market landscape.

Frequently Asked Questions

What is a horizontal partner?

A horizontal partner is a company that works with a main vendor to sell products or services that can be used in many different types of businesses. They don't focus on just one kind of customer but aim to help a wide variety of industries with common needs.

How do horizontal partners benefit a vendor?

Horizontal partners help vendors reach more customers across diverse markets without the vendor needing to build expertise in every single industry. They expand market reach and sales opportunities by applying the vendor's solution to new sectors, like software for both healthcare and finance.

Why would a business choose a horizontal partner over a vertical partner?

Businesses choose horizontal partners when their product or service has broad appeal and can solve similar problems across many industries. This allows for wider market penetration and economies of scale, rather than deep specialization in one niche.

When is a horizontal partnership most effective for IT companies?

For IT companies, horizontal partnerships are most effective when their software or platform offers general solutions, like cybersecurity, cloud infrastructure, or data analytics, that are critical for nearly all businesses, regardless of their specific industry.

Who typically becomes a horizontal partner in the manufacturing sector?

In manufacturing, a horizontal partner might be a company that provides general automation solutions, supply chain management software, or specialized machinery that can be used by car makers, food processors, or electronics manufacturers alike.

Which types of solutions are best suited for horizontal partnerships?

Solutions best suited for horizontal partnerships are those that address common operational challenges or universal needs. Examples include enterprise resource planning (ERP) software, customer relationship management (CRM) systems, or logistics services.

What's the difference between a horizontal and a vertical partner?

A horizontal partner serves many industries with a broad solution, like accounting software. A vertical partner focuses on a single industry with specialized solutions, for example, accounting software specifically designed for hospitals.

How do horizontal partners impact market penetration for software vendors?

Horizontal partners significantly increase market penetration by introducing a software vendor's product to new, previously untapped industries. They act as trusted advisors within various sectors, opening doors and accelerating adoption beyond the vendor's direct reach.

What are the challenges of managing horizontal partner relationships?

Challenges include ensuring partners understand how to apply the solution to diverse industries, providing consistent training for varied use cases, and managing potential conflicts of interest if partners serve overlapping customer bases in different sectors.

How can a company measure the success of its horizontal partner program?

Companies can measure success by tracking metrics like the number of new industries penetrated, revenue generated per partner across different sectors, partner satisfaction scores, time to market in new verticals, and the overall growth of the partner network.

What training do horizontal partners typically require?

Horizontal partners need broad product knowledge, not just for one use case, but for how the solution applies across different industries. Training should cover general features and then provide industry-specific examples and use cases to help partners adapt their selling approach.

How do horizontal partners contribute to a vendor's partner ecosystem health?

Horizontal partners bring diversity to the ecosystem, reducing reliance on any single market segment. They help vendors grow more quickly, access new customer bases, and develop a more resilient partner network that can weather changes in individual industry economies.