October 29, 2020

Big technology companies open customer doors aplenty for startups

Large technology companies and startups with innovative solutions are beginning to jointly market their offerings. It’s a win-win for both. The large companies are able to showcase solutions that they themselves do not have, but are crucial to the package the customers want to see. The startups get a foot into big technology buyers who they would otherwise have found extremely difficult to access.
For Mobisy, a platform for retail channels and sales teams to transact and collaborate, these large enterprise partners are crucial for business. “Almost 70-80% of our deals are through joint bidding with them. I can’t have a large number of feet-on-street for support and implementation, and the co-operation gives me credibility to work with billion dollar companies,” says Lalit Bhise, co-founder & CEO of the Bengaluru-based venture.
Mobisy’s product Bizom helps in supply chain automation by connecting retailers directly with FMCG brands to manage inventory and stocking more efficiently. The company has around 100 employees and 200 enterprise clients. It works with the top IT services players, but Bhise says he is not allowed to name them because of non-disclosure agreements.
Altizon, an industrial Internet-of-Things (IoT) startup founded in 2013, works with Accenture, Wipro, and Persistent Systems, among others. “Most of our clients come through these large IT firms,” says co-founder Vinay Nathan. The Mumbai-based company works with industrial clients to increase their productivity and equipment effectiveness by employing analytics and automation.
“Since the large IT companies work closely with customers, they know the solutions they need. And if the customer needs any optimisation or improvement, they can do it quickly,” says Nathan, adding that these are complex things the startups cannot solve on their own. The deals are usually concluded over several meetings with the cli ents with all the companies participating to discuss the product, proof-of-concept, and the value proposition.
Nathan says the large enterprises cannot build all the products the customers need and have to work with startups for these products.”They speed up our time to market, help us scale, and save us a lot of work and feeton-street,” he says.
Microsoft Accelerator’s CEO-in-residence Bala Girisaballa says the big technology giants have fantastic connections with the Fortune 500 companies, having sold to them for years. “A joint bidding for a deal with startups provides the startups invaluable access,” he says. He notes that the services component in deals is shrinking, and that makes products and platforms from startups invaluable in the digital transformation that customers demand.
Every industry , from banking and industrial to transportation and hospitality are adopting digital technologies to transform customer experiences, create new sources of revenue and improve efficiencies. These require a variety of new and customised solutions in emerging areas like IoT, analytics and artificial intelligence (AI).
Companies like Microsoft, IBM and Cisco are increasingly playing the role of platforms where startups can come and create products to satisfy customers. Microsoft has its cloud plat form Azure, IBM its cognitive platform Watson. “Working with a hundred startups simultaneously means that companies like Microsoft can open up conversations with all customers as the platform will have a solution for most customer problems,” Girisaballa says.
But it may not be easy for startups to find a large player to partner with. Ben Mathias, managing director at Vertex Ventures, which has invested in Flutura, an IoT venture, and Cloudcherry ,a customer experience management software firm, says startups should have achieved a moderate level of success and should have proved their technologies with clients before hoping to catch a bigger player’s eye. “Big tech companies will do an evaluation before working with them and it may take a long time to find synergies and value propositions before they are in a position to build joint go-to-market strategies,” he says.
An entrepreneur, who did not wish to be identified, said his venture dedicated almost 10% of its workforce for two months on building a partnership, and finally it did not work out. “For a fast growing startup like mine, it was a big loss,” he says.
Vinod Muthu krishnan, co-founder of Cloud cherry, which places joint bids with other companies including Microsoft, Capillary Technologies and Cisco, says that for these relationships to sustain, it’s also important for the partners to stay out of each other’s domains. There are other emerging tensions too. Girisaballa says consulting and implementing companies find themselves increasingly being a smaller part of the deals that their access helped win. “This gives rise to frictions between the partners,” he says.