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BLOG: The BI OEM marriage – Does it work?

Lau Shih Hor | Aug. 16, 2011
Compared to a strategic alliance, BI OEM partnerships are the more lucrative arrangements for both OEM vendor and partner.

Symbiotic relationships in the form of partnerships are alive and well in the business intelligence (BI) business ecosystem. Although BI partnerships garner less fanfare compared to a merger & acquisition (M&A) or the closure of a huge direct sales deal, for many BI companies, partnerships with other vendors contribute a stable stream of revenue. The size of the revenue generated from these partnerships depends on the degree and type of partnership.

There are two broad types of BI vendor partnership; technology partnership and strategic alliance. If done right, both have tremendous value-add to the partners. The latter is mostly to do with sales via direct selling activity (channel sales), referral sales and marketing. The former is technically oriented and are predominantly OEM arrangements.

The Perfect Match

Under OEM arrangements, a company's technology can be plugged into another company's products while still holding the intellectual property to the technology. The OEM partner is the company that has licensed the use and distribution of the OEM's technology for some monetary consideration. When it comes to BI OEM partnerships, it could be the embedding of certain BI tools of the OEM vendor, be it reporting or analytics into a totally unrelated product offered by the OEM partner.

Compared to the strategic alliance arrangement, BI OEM partnerships are the more lucrative arrangements for both OEM vendor and partner. For the OEM partner, the greatest benefit is the shorter time to get its product to market as the development time for the OEM piece is essentially removed, allowing the partner to focus its resources in accelerating the development of its core technology. This helps provide the OEM partner with a competitive advantage. In regards to the BI OEM vendor, successes can be replicated to other companies with multiplier effect on revenue by just replicating, with little time investment, the integration that was successfully worked out with earlier partnerships.

A successful OEM partnership is not a static relationship. Like any relationship, it is not just about leveraging each other's strength but working to grow these strengths as well. A constantly evolving relationship is a good thing. It means that the partners are continuously improving on their individual capability which will in turn collectively provide ever increasing best-in-class value to the partners and their end-users. It is important that the BI OEM vendor be actively soliciting input from its customers and partners and incorporating enhancements into its product roadmap on a product release schedule that keeps it at the cutting edge of the BI market.

Not Just a 'Marriage' of Convenience

BI OEM partnerships are also the most technically involved business relationship among all the different types of partnerships. A significant amount of time is spent upfront by both companies to devise the best way to combine the two technologies. The amount of time invested is dependent on how compatible both technologies are - e.g. it is easier to try to integrate two Java-based technologies than between a Java and a .NET platform. Of course, the use of open interoperable standards like REST helps.

 

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