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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.

Despite the massive commitment involved from both parties for OEM partnerships, the potential of a well-run OEM partnership could be much larger. The sale of each of the partner's products will result in revenue to the OEM vendor with little effort. In some cases, the OEM partner may even decide to acquire the vendor due to the huge success it derives from the partnership.

In the process of gauging each other's technology, the partners may find a new business model to collaborate. For example, business analytics (BA) has become the industry focus of late with many vendors entering the market with analytics tools and services. Traditional BI players saw the need to augment their technology to support analytics as an essential component of their overall BI offerings and expertise, as more and more corporations turn to business analytics to help them gain competitive advantage. Some do this by developing their own analytics offering while others turn to analytics vendors for an OEM partnership.

 The Unseen Partner

A potential downside to the OEM vendor is its position of anonymity in the partnership. It typically does not get any brand recognition as the partner's product and brand will be positioned in the market with no mention of the OEM vendor's technology or involvement. The exception is when the OEM partner agrees to recognise the vendor publicly, as in Intel's case, where the "Intel Inside" caption is placed in plain sight of the consumer.

Despite being positioned in the "shadow" of the partner's product, there is still a lot to be gained by the OEM vendor. In the case of Elixir Technology which OEMs its BI technology - Elixir Repertoire, its success in building on its partner relationship resulted in many referrals from its partners. This is one of the ways for BI OEM vendors to can get an edge over its competition; especially those that only emphasise end-users.

To Have and to Hold

When it comes to the service and support responsibility provided by the BI OEM vendor, as much as this is spelled out in the OEM agreement, in practice, the delineation tends to become grey over time. This typically happens when the vendor is drawn into support calls with the customer directly instead of letting the partner's support team maintain first line of support. OEM partner support is generally more extensive in the beginning but tends to taper off over time as the partner gains experience and expertise in the OEM technology.

For the partner, keeping up with the release plan of the vendor can be complex, but a good release management policy can mitigate the complexity. Overall, it is important that both parties have good communication at all levels including the product management level to ensure that the two technologies keep in step for the sake of continuity.

 

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