Partnerships Drive Growth for Software Ventures
Our featured articles this week focused on growth stories from the B2B software market, including Microsoft's Azure, Leadspace and Gusto. Within that space, these three companies provide very different service solutions. However, all three deployed a variation on the same growth strategy -- partnerships. Each were able to successfully leverage the value of existing and new strategic relationships to drive strong growth.
It may be easy to dismiss the impressive growth of Azure given Microsoft's sheer size. But, remember, size alone is far from a guarantee of future growth. We should be wise to remember the "bigger they are, the harder they fall" nugget. So, for Microsoft to achieve 12% growth (see our growth report) largely from Azure, their cloud-based platform, it begs the question: how did they do it? Interestingly enough, even though their growth outpaces rivals, Amazon's AWS is still bigger. But, back to the question of how. From our perspective, Azure growth is due in large part to the skillful use of strategic partnerships. Over the decades, Microsoft built relationships with enterprise level companies. So, they have made it easy for those clients to source their cloud-computing needs with a trusted vendor. (The folks at Motifworks wrote a good summary on this a while back which still holds true.)
On a somewhat smaller scale, Leadspace also successfully developed strategic partnerships which proved critical to their recent growth (see our growth report). In fact, they've doubled their return on revenue in 2018, continuing their strong growth performance since 2016. Bombora and G2 Crowd are just some of the key partnerships that bring in their mid-size to enterprise level clients. But, the biggest partnerships are still probably with Marketo, Oracle and D&B.
Not to be outdone, Gusto continues to grow and recently expanded its Denver operation with another 100,000 square feet of office space making room for their 500 employees (see our growth report). Underpinning this growth is Gusto's approach to raising capital, building partnerships with over 75 major investors such as Google Capital as well as the founders of DropBox, Evernote, Instagram and PayPal. Check out Renee Frojo's coverage from 2016 for more. It could also be said that Gusto's growth is also due in part because of the partnerships they create with their own employees. By bringing in those that are a good cultural fit and making the happy to stay, Gusto tries to practice the art of good relationships internally as well as externally.
As trite as it may sound, relationships are key to successful growth. Regardless of your size or current position in your market, strategic partnerships can be an incredibly powerful foundation for new growth. They are not only a source of new business, but, partnerships also provide smaller and younger companies a much needed boost to their reputation and credibility.
Thanks for reading. Check back next week for our next growth strategy analysis!
[Photo courtesy of Pixabay.]