Among the many lessons learned by Microsoft over two decades of exploring, negotiating and executing consulting alliances, perhaps the most important is that ambiguity is the enemy. "Living through a failed alliance is far worse than the disappointment of not closing a deal."
"Know what you want from the beginning," advises Geoff Nyheim, general manager of the Global Partners Enterprise and Partner Group at Microsoft, which unlike some of its largest competitors, pushes nearly all its services out to the channel and prefers commercial alliances to financial return-based (i.e. venture-capital) arrangements.
Nyheim, speaking at a recent conference sponsored by Kennedy Information, cited at least 38 good reasons for forming an alliance. And yet, he notes, companies still come together because a couple of their executives are buddies, or they think a deal will generate a little buzz.
All three phases of a partnership - exploration, negotiation and execution - have to be performed in a much more "disciplined" manner, insists Nyheim.
In the first phase, there must be shared objectives; some alignment of business models; compatible cultures, offerings and market segments, and a common language.
Also, suggests the Microsoft alliance manager, involve key stakeholders early in the process and keep out senior executives "until it's time to get the deal done." Understand your partner's motivations, work out a process that's collaborative and iterative, and nail down your long- and short-term objectives. And, before committing ink to paper, define the "depth" of the relationship - preferred, exclusive, etc. - and scope the investment and your risk/reward tolerance.
And when you've accomplished all of that, says Nyheim, you've only just begun the process.
