What is an Integration Partner? All Your FAQs Answered
The number of SaaS companies has continued to skyrocket, and interoperability between software has become increasingly important to attract and retain SaaS customers.
For this reason many SaaS companies are looking to build more integrations, and attract partners who will build integrations to their product. In this article we explain what integration partnerships are and answer some frequently asked questions about integration partnerships.
What are integration partnerships?
An integration partnership is when two SaaS companies connect their products by building an app between their systems so that customers can have a smoother, more functional experience while using the two technologies.
This relationship creates a user experience where customers are able to connect and move data from one software to another more easily, without having to pay for a developer to connect the systems.
What’s the business value of integration partnerships?
Integration partnerships allow companies to solve customer problems without building new solutions or product features from the ground up – which saves time and money.
Integration partnerships improve the customer experience and retention by creating a better product experience. Customers can more easily access,share, and move data between different products without having to tax their developers or engage in a new relationship with an agency or other third party. Instead, they can deepen their relationships with the SaaS companies they are already relying on to provide them with a software service.
What are the technical requirements to participate in an integration partnership?
A common requirement to form an integration partnership with a larger SaaS company is to have a published integration that has passed technical, security, and branding review.
In our analysis of the top 50 technology partnership programs, 76% of top SaaS partner programs required a published integration to join. The rest allow companies to join before they have built the integration.
In addition to requiring an integration to be published, some companies require that an integration have a certain number of customers before the partnership can be formed.
For smaller and medium size SaaS companies, one needs to commit to either building a valuable, reliable integration or supporting the partner in building the integration. Usually, this means having an API available for external use, good API documentation, and someone to support partner developers in the build and approval process, as well as with customer support.
Sometimes, equal sized or valued partners will collaborate and build the integration together, requiring both sides to bring engineering and product resources to the partnership.
From the product experience perspective, companies should first evaluate the benefits customers would see from a potential integration that could be built.
When focusing on providing further product capabilities, a company always has the choice to either build features from the ground up, buy this feature from another software vendor, or partner with a company whose customers could also benefit from their technology to build an integration.
Sisense offers a helpful framework for helping companies decide whether they should build, buy or partner when deciding to expand their product functionality. In their framework, the decision is based on time availability (time to market) and what is core to the current business (and its product team).
Using this graphic, one can see that when a feature’s time to market is urgent, but the feature is not core to their business, then a company should engage in an integration partnership.
Vice versa, if the feature is core to the business, but not urgent, then it would make more sense to build internally.
However, as the Google Sheet template identifies, a company must evaluate how difficult it is to build an integration versus feature, and whether a potential partner is willing to build a quality integration. These criteria will also impact whether it is advisable to build, buy, or partner on an integration.
In addition to product considerations, integration partnerships should be evaluated for their go-to-market value. Some potential integration partners may be incredibly invested in co-selling and co-marketing, or have a very strong brand that can result in lifting an integration partner’s brand and sending high quality traffic to their website.
Depending on strategic goals, the go-to-market factors may be equally or even more important than product considerations. It is important to remember, though, that underneath the go-to-market activity, integration partnerships all require a strong product use case that customers actually want and will provide a positive customer UX. Driving a bunch of high quality traffic and leads to a poor product experience isn’t a viable long-term strategy.
Companies should perform research on their customer’s tech stack and workflows, and identify user problems or areas where efficiency can be improved or new functionality can be unlocked by integrating with a partner software.
Sales and CX teams can be good resources to gather this type of information, as can the product and product marketing teams. Additionally, creating an integration marketplace in-app enables companies to put up tiles for potential integrations where customers can signal interest by adding their name to a waitlist.
Partnership teams can further validate the depth and strategic importance of the potential usage by utilizing a tool like Crossbeam or Reveal. These tools enable companies to identify shared prospects and customers to assess how many customers may use an integration and how valuable those customers are strategically.
With this framework in mind, finding partners should be a mix of outbound and inbound. Creating marketing pages that explain the benefits of partnership, and facilitate inbound integration partner requests, will make it easier for potential partners to reach out directly and learn more about their product.
Outbound activity can focus on integration partners that are assessed to be of high value and can include networking, requests for introductions, cold emails, and filling out forms on partner websites.
Companies should come to these meetings with compelling reasons for the company to partner, including the product use case, customer overlap, and willingness to contribute technical and go-to-market resources. Case studies with prior partners can help further persuade potential partners.
After researching and documenting the monetization terms of 50 leading SaaS and cloud platforms, and talking to hundreds of smaller SaaS companies, we discovered that there are eight main tactics to monetizing integrated partnerships. These include:
Charging partners a flat fee
Charging partners for API usage
Requiring the partner provide referrals
Requiring the partner purchase services
Selling the partner related services or referrals
Requiring the partner engage in activities that have a clear monetary value
Charging customers to use the integrations
For a more detailed description of how each tactic looks, and the benefits and drawbacks of each, read this article.
The success of an integration partnership relies on alignment around goals and objectives for different departments including partnerships, marketing, sales, product, and customer support teams.
If the partnership is solely a product-focused partnership, where a partner is solely integrating with another product without co-marketing or co-selling activities, partnerships teams will usually manage this with help from product and/or customer support.
However, in the case where partners are planning to build, co-market, and co-sell an integration together, marketing, sales and customer success teams will also be involved.
Each team will have individuals in leadership roles appointed to manage the objectives aligned to their department that are also in service of the larger integration partnership goals.
What is the typical structure of an integration partnership?
The structure below identifies the key components of an integration partnership and is based on our analysis of the Top 50 Technology Partnership Programs. The use of each depends on the size of a company and its goals.
Signed agreement and fee
This is a shared agreement outlining the details, activities, and monetization terms that each partner signs. It usually includes an agreement that individual partners will take sole responsibility for their integration’s security and functionality.
Partner Developer Portal
There is a partner and/or developer portal where partners can access standardized marketing and tech resources, and submit and manage their apps.
As partners drive more revenue through integration usage and referrals, as well as engage in more marketing and sales activities, they can reach higher tiers.
Programs must select from one of 8 different monetization models, combining them to optimize their organizational goals with their tech partnership program.
Partners must agree upon who is building the integration and what technical support will be provided from both sides in the design, build, testing, beta, launch, support, maintenance, and updating stage of the integration. How much each partner will share their product and API roadmap should also be assessed.
Starting from a marketplace listing and rising to joint solution sheets, webinars, case studies, blog posts, and mutually required marketing spend with appointed marketing managers or leaders.
Only available to higher tier partners, including training sales teams, demo environments, regular meetings with sales, executive meetings to strategize GTM and sales pipeline.
For an additional framework on how to determine the structure of an integration partnership, check out this article by VMware’s Sr. Director of Telecommunications Alliances.