Industry Insights

Five Software Companies Maximizing Growth with a Stellar Partner Strategy (and two that are a must-watch)

By Ideas @ AppDirect / March 22, 2022

Unpredictable, volatile, and hypercompetitive. That sums up today's SaaS climate. A vibrant partner community is fundamental to long-term success as software companies face those challenges and work to keep pace with demanding customers. Partners help you bridge the gap to deliver robust technology that meets customers' needs. A loyal partner community also helps drive business growth by introducing your solutions to a larger addressable market. In all, a well-executed partner strategy can help you deliver greater value to customers, improve customer stickiness, and drive innovation.

In 2021, a Channel Market survey revealed 90 percent of business leaders expect to increase revenue directly attributed to their partner ecosystems. Not only that, 30 percent plan to create a referral program within the next year.

Finding your partner niche

However, we also know that every software company and partner program is incredibly unique. Whether it's an affiliate, referral, or resell and integration partnership—or a combination of all three models—helping your community thrive requires finding your partner niche.

Shopify is one example of a highly-productive affiliate program. Shopify Affiliates earn a 200 percent commission for each merchant they successfully refer. The company’s simple, straightforward affiliate model has analysts predicting Shopify's continued explosive growth, with revenues expected to rise 32 percent in 2022 and 33 percent in 2023. Salesforce, on the other hand, has built a profitable partner community relying primarily on integration partners. Its partnership strategy is so successful that by 2024, revenue generated from the ecosystem will be six times bigger than the company itself.

Who else can boast a thriving partner ecosystem?

In addition to Shopify and Salesforce, who else is executing a winning partner strategy? Let's review five software companies with robust partner ecosystems and two that are a must-watch.

#1 - ADP—ADP, the industry-leader of online payroll, HR, and tax solutions, first launched the ADP Marketplace in October 2014. The company created an environment where developers can access APIs to integrate various employer- and employee-based solutions and they created a partner ecosystem where partners can showcase those solutions to clients looking to customize how they use ADP. Not only is ADP reselling SaaS partner solutions, but they are also selling several integrations or connectors between their products and partner products. As an example, within the ADP Marketplace, customers can purchase pre-built integrations for iCIMS and SAP Concur. One iCIMS connector includes out-of-the-box functionality that automates and synchronizes new hire and employee data across iCIMS and ADP Workforce Now®. On the heels of its U.S. marketplace success, the company has expanded its footprint with Marketplaces in Canada and France.

In 2020, Forrester Research recognized the ADP Marketplace as "a strong choice for anything HR related." The Forrester New Wave™: SaaS Marketplaces report identifies ADP as "a giant in HR, with hundreds of thousands of clients. Its marketplace is very much designed to serve these customers, with a smaller but highly relevant set of applications."

#2 HubSpot—The CRM powerhouse HubSpot has also built a prolific partner community. The HubSpot Ecosystem lets customers tap into an expansive network of apps and solutions. The company has a Solutions Directory and App Marketplace, which helps customers maximize the impact of their tech stack and provide their customers with more personalized experiences. The company recently announced that its App Marketplace is home to more than 1,000 integrations that span use cases in marketing, sales, service, and more. In the company’s short 15-year history, this partnership strategy has helped elevate and accelerate HubSpot’s growth. HubSpot also reports that customers install, on average, seven apps. Plus, more than a quarter of customers install 10 or more.

“According to IDC, HubSpot’s global partner ecosystem will reach $12.5 billion in revenue by 2024, representing a significant opportunity for companies that are looking to partner with and build on top of HubSpot.” - HubSpot

#3 - LiveChat— If the pandemic has had any silver lining for businesses, it's that many companies doubled down on customer service. They've added more personalization and easier ways to communicate. LiveChat leads the pack in this area by delivering innovative customer service and chat technology. The company is accelerating growth and creating more value for customers with the LiveChat Marketplace. The marketplace offers over 200 integrations that help customers take their engagement to the next level. This includes plugins that let users add LiveChat to a website with just a few clicks. Other integrations like those with Salesforce or HubSpot, let users harness the full power of their CRM within the LiveChat agent app. Others like Chat Translator provide multilingual support, so agents don't have to switch to another tab and have conversations translated in real-time. In part, LiveChat estimates revenues in Q3 2021 increased by 14.3% thanks to a growing partner community.

#4 - Zoho One—Zoho One is a suite of 45+ integrated applications companies use to manage, connect, and automate business processes. Now, five years in, the company has built a loyal partner community fueled by an ecosystem strategy and marketplace. Zoho Marketplace includes 1000+ ready-to-use extensions across 40+ categories. Tools enable customers to integrate other business tools with Zoho apps without writing a single line of code or requiring complex configurations. In 2021 the company hit significant milestones, with its marketplace being visited 1.32 million times. Zoho also added 300-plus extensions and Zoho users installed extensions 275,000 times in total.

#5 - Marketo—Owned by Adobe, Marketo develops and sells leading marketing automation software. Thousands of organizations trust Marketo to automate marketing campaigns throughout multiple channels. Marketo Technology Partners have the opportunity to market their applications on Adobe Exchange​, the company’s marketplace for extensions, panels, plug-ins, and more. Today the company offers 550+ plug-and-play integrations across 20 categories. Whether it’s extending the scalability of automation workflows or leveraging data partners for enhanced insights, plug-and-play integration features are critical to Marketo’s growth and customer success.

Partner communities to watch

In addition to these trailblazers crushing it with their partner ecosystems, Datadog and Xero are two software companies with partner communities to watch. They're proving that it's possible to maximize business opportunities and deliver even greater value to customers with the right partner strategy and approach.

#6 Datadog—Datadog is a SaaS-based data analytics platform that gives customers visibility into their entire technology stack's performance—including applications, edge devices, cloud platforms, and infrastructure health. In 2020, the company launched Datadog Marketplace, where developers can trade their third-party applications with other Datadog users. The company's marketplace introduces new ways for Datadog partners to increase the scope of their monitoring practices and build new tools on the Datadog platform, all while expanding awareness of their brand. The company's performance continues at a record pace, with 70 percent year-over-year revenue growth in 2021.

#7 - Xero—Xero is a cloud-based accounting software platform that added some 450,000 subscribers in 2021, bringing its total to 2.74 million and counting! In addition to growing through acquisitions and building out its reseller program, the company is also driving growth with an ecosystem strategy. Xero has built out its partner community and technology ecosystem integrations through its third-party application marketplace. Xero customers can access and add a myriad of connected apps across functions like invoicing and jobs, payments, payroll and HR, and inventory. Today over 1,000 third-party apps connect with Xero and are available in the Xero App Store. By offering these related apps, Xero delivers more value to customers enabling organizations to customize their accounting solutions without requiring advanced technical skills.

Amplify growth with a winning partner community

As these examples show, a strategic partner community is critical for software companies to amplify revenue gains and drive engagement. Whether you start with an affiliate partner program or target integration partners to extend the value of SaaS solutions, don’t wait to launch or scale your partner community.

Read more about this innovative business model in our brief, Industry Trends: Hypercompetitive Software Landscape Demands an Ecosystem Strategy.