Dan's Take

Beware the 'Piecrust Promises' of Potential Partnerships

They're often not what they seem.

• By Dan Kusnetzky
• 09/30/2015

My inbox is full of messages from PR representatives of the companies that I track, announcing new partnerships or alliances. They believe that I should want to speak with company representatives, then offer glowing comments about the wisdom of the partnership and how it will allow the participants to take over their joint market space. After watching the industry as long as I have, I am seldom moved to comment.

Sound and Fury, Signifying a Partnership
Why is that? I rarely comment because these announcements are usually made with trumpets blaring and angels singing the solutions the partners will bring to the market. Then the partnership is quietly disbanded some time later. As one would expect, there is no grand announcement when the partnership falls apart.

Partnerships are typically announced when two or more industry players find themselves sharing customers' datacenters with one another. Supplier executives come to believe that maybe their firm could increase revenues and market penetration by working closely with other suppliers.

Trial Marriages
The partnership may also be seen as a "trial marriage" when a large supplier creates a partnership with one or more smaller suppliers, when the larger is considering an acquisition or entry into an adjacent market.

After watching the industry for years, it has become clear to me that most partnerships and alliances are short, tentative arrangements designed to get a great deal of media attention quickly. These arrangements are typically announced with a lot of noise; it's much more quiet when they're disbanded. This is usually done when the suppliers think no one's looking.

Mary Poppins had a phrase, "piecrust promises," that could be used to describe these moves: "Easily made, easily broken." IT decision makers should be very careful before making policy decisions based upon these announcements.

Dan's Take: Look Before You Leap
Here are a few rules of thumb that might be useful for decision makers when considering whether to pay attention to or ignore such an announcement:

• When and where are the partners planning to team up, and when are they going to focus on their own separate projects? Do the partners compete almost everywhere and plan to work together only in a single, small area? Obviously, if competitive areas are large and broad and the area of partnership is small and short term, it wouldn't be wise to make long-term plans based on the existence of the partnership.
• Are the goals of each of the players easy to observe? Are they really congruent? Are the goals long term or short term? If so, the partnership is likely to stand for a long time. If not, it would be wise to consider the move a "marriage of convenience."
• Have the partners made it clear how they're planning to help your firm cross the divide from where you are today to where they want you to be in the future? Do you think that being there will really be of benefit to you? Beware of slideware and handwaving offered as a replacement for solid and reasonable programs.
• Are the partners willing to explain timeframes and costs for the journey they'd like your organization to take to their promised land? Does either the cost or the timeframe live well with your organization's technology plan? If not, it would be wise to pass.
• Do the suppliers expect your organization to abandon years of investment in other approaches, rather than making their solutions co-exist happily with your current infrastructure? As I've pointed out before, the history of the IT industry is littered with empty promises that led nowhere.
• Examine the funding behind joint projects. If there's no money, nothing is likely to be accomplished. If the only obvious joint effort was to create and distribute a press release and a slide deck, it's probably safe to ignore the whole thing.
• One last thing. If the suppliers are making promises, get them in writing. As my Dad, the attorney, used to say, verbal promises are worth the paper that they were written on.