07 Oct 2021 . 5 min read
Forrester’s Report Finds Ecosystem Management to be an Influential New Segment
The concept of ecosystem management is picking up traction, as evidenced by Forrester Research’s recent report, New Tech: Ecosystem Management, Q3 2021. First recognized in Forrester’s Channel Software Technology Stack research, the term is now being more widely used. The latest report provides a deep dive into this emerging technology segment, including an updated category definition, its value proposition, the state of investment, segment maturity, and a review of over 30 emerging ecosystem management platform and tool vendors, including Pronto.
What is the driving force behind this more holistic view of partnership management? Forrester explains that rapid digital adoption is an impetus, particularly accelerated during the COVID-19 pandemic. As companies have adapted their business models to serve new routes to market, such as shifting to subscriptions, e-commerce, and marketplaces, they must create new and different kinds of partnerships at scale.
Forrester’s updated definition of ecosystem management
The definition now includes information on who is involved, the goal, and the expected outcomes. Specifically: Ecosystem Management is “the combination of transacting (e.g., resellers, retailers, franchisees, agents, dealers, and distribution) and non-transacting (e.g., strategic alliances, development, innovation, system integrators, agencies and consultants) channels into a single programmatic and scalable management that influences buyers early in their journey, orchestrates brand selection and purchase, drives product or service adoption, builds deeper integrations and stickiness, enhances value creation and co-innovation, and accelerates subscription enrichment (e.g., upsell and cross-sell), retention, and long-term renewals.”
Pronto’s platform happens to align well with Forrester’s definition as it supports transacting and non-transacting partners and helps ecosystems professionals orchestrate joint solutions that drive sales, adoption, and retention.
Value proposition: helping companies transform their business models through successfully scaling ecosystems
Forrester consolidated the value proposition of ecosystem management to include:
- Leveraging network effects – “Provides ecosystem managers a platform of innovation combined with economic opportunity, incentives, and enablement. It allows partnering beyond traditional industries, buyers, geography, segments, or product boundaries to unleash value beyond what can be developed internally.”
- Enabling value creation – “Creates a customer-centric, unified value proposition in which buyers benefit from an end-to-end experience through a single digital access point.”
- Co-innovating at scale – “Ecosystem partners can scale joint value creation to other similar customer scenarios, inventing new ways to drive business our comes. The combination of different skills, cultures, mountains of data and emerging technologies with advanced collaboration can incubate next-generation innovation and invention.”
The market is heating up globally with major VC and PE investment growth
The ecosystem management market segment in which Pronto operates has been attracting strong venture capital (VC) and private equity (PE) interest as its value becomes more evident. Across the 34 companies, $573 million was invested in the last two years alone ($192M in 2019 and $381M in 2020), compared to $129 million combined over the previous 8 years.
Having operated in this space since 2018, those at Pronto have seen this upward trend firsthand, closing seed funding this year.
Using ecosystem management to accelerate growth and innovation
Ecosystem management may be considered an emerging tech segment, but it’s expected to quickly make a major impact. “76% of business leaders believe current business models will be unrecognizable in the next few years, with ecosystems as the main change agents,” according to Forrester. Additional opportunities for innovation are listed below.
- Brands must pursue innovation and agile partner models through different partner types to serve customers through every stage of their journey, and should seek increased openness, connectiveness, intuitiveness, and immediacy, which requires better management technology.
Pronto’s answer: A collaborative platform that enables cross-functional teams to manage multiple types of partnerships throughout their lifecycle, from onboarding to closing sales.
- More reliable, accurate measurement is needed. Past partner performance indicators such as revenue tiers, profit contribution, certifications, and customer satisfaction surveys have failed to accurately predict performance, making it difficult to demonstrate value.
Pronto’s answer: Real-time analytics and data visualizations show the exact value associated with the full scope of partner sales and marketing activities, which can be filtered and exported easily.
- Winning in ecosystems requires data-driven innovation. Partners seek consistent, predictable programs, but siloed views of sales, staffing, and technologies create artificial barriers to growth. Consolidated ecosystem data will better inform each step in the partner journey. Improving program automation, flexible self-service capabilities will promote partner engagement, loyalty, co-innovation, and stronger network effects.
- Pronto’s answer: Companies can see the full picture of their entire partner ecosystem in addition to drilling down into each relationship. Innovation becomes easier with the time saved from automated tasks and seamless integrations.
Company grouping and functionality to help prospective buyers
To help prospective buyers trying to understand this nascent market, Forrester developed a segmentation template. On one dimension, they defined the segments as early-stage, growth, and late-stage companies using funding, tenure, headcount, and revenue to determine maturity. On the second dimension, Forrester gives a snapshot of each vendor, describing primary functionality, verticals served, geographic sales, and three sample customers.
Where does Pronto fit it? It’s considered a growth-stage company that offers strong capabilities outlined in report: ecosystem data and mapping, and ecosystem management and orchestration. Additional areas that Pronto aligns with include ecosystem influence and attribution, ecosystem recruitment and visualization, and ecosystem marketplace and integrations.
Pronto is quickly building its global team and has already exceeded the $1M sales threshold by serving clients in the tech, professional services, and manufacturing sectors.
Ecosystem professionals needed better tools to help them recruit, grow, manage, and orchestrate their partnerships in a rapidly changing business environment. Forrester’s report underscores the increasing importance of solution providers within this segment, providing an expanded definition, number of vendors, and size of investments.