Introduction

Business partnership involves individuals or companies coming together to achieve a common goal. Depending on the type of partnership, your partners may share in the liability and profit of the business. Find out more about 5 tech partnerships that worked in 2021.

Some businesses enter into partnership agreements with other individuals or companies and become huge successes. Others may turn out to be utter disasters. 

A partnership agreement is often best suited for a group of professionals in the same line of work where each partner can contribute effectively. Unfortunately, having a common goal and industry doesn't automatically make your partnership a success.

You can, however, look to other successful partnerships as a blueprint for your own. So, if you're considering introducing a partnership into your tech business, this article is for you.

In this article, you'll learn about the advantages and disadvantages of business partnerships. We'll also look into some examples of successful tech partnership businesses in 2021 to help you better understand how a partnership works.

What is a Business Partnership?

A partnership is a legal business between two or more individuals or companies that share liabilities and profits. Partnering with other people, especially in the tech industry, is a strategic way to grow your business and better serve your consumers.

When you partner with a brand that has technical expertise you don't, your business stands out from its competitors. As such, companies often invest heavily in marketing and sales efforts to maximize the partnership's value, resulting in products or services that are often better rated than when they are produced solo.

Also, having the right business partner can help increase your brand awareness. This allows your business to expand into new markets, positively impacting the total revenue generated. Co-marketing efforts can enhance product visibility and drive growth.

Take note that you can only mitigate some of your insufficiencies when you enter into the right type of partnership; the success of one brand depends on understanding the customer's needs and creating value for them.

There are different types of partnerships, and you should acquaint yourself with them before proposing your tech business. Whatever type of partner works for you, various internal teams must work together seamlessly in co-selling partnerships to ensure a win-win for all involved.

There are several examples of successful tech partnerships out there. To help you understand what a successful tech partnership looks like, we have curated a list of 5 examples of great partnerships.

Microsoft and SAS

SAS, a long-time independent statistical analytics company, first partnered with the tech giant Microsoft in 2020. When you think about these two companies, it makes sense for them to enter a partnership agreement.

SAS is known for its expertise in machine learning, data science, and analytics, while Microsoft is known as a leader in cloud solutions, which makes it an interesting strategic alliance.

The partnership between Microsoft and SAS was built to provide a cloud platform (Microsoft Azure) for SAS analytics products. They leveraged APIs to build integrations that enhance user experience. In return, SAS migrated its analytics tools onto Microsoft Azure. With this alliance, these two tech giants were able to develop an efficient go-to-market strategy that stood out from the competition.

The result of this partnership agreement is that Microsoft and SAS combined expertise to turn data into information, and helped end users by providing seamless interoperability.

Some features that make this partnership successful include a strong working relationship, the popularity of Azure with SAS, and potential synergies between Microsoft 365, Dynamics 365, Azure, and Power BI.

In other words, from this partnership, seamless integration allows business users to easily use their tools to develop apps without being an expert in data science or coding.

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Fiserv and USDA 

Another successful tech partnership in 2021 is Fiserv and the USDA. Fiserv Inc. is a financial services and technology company that works with banks, credit unions, securities broker-dealers, and others. The USDA, the United States Department of Agriculture, is a federal agency responsible for overseeing the agriculture industry and regulating food safety, quality, and nutritional labeling.

The partnership between Fiserv Inc. and the USDA was aimed at helping Supplemental Nutrition Assistance Program (SNAP) participants purchase groceries online. This was necessary because, before the partnership, SNAP participants could only pay for groceries in-store or in person with a cardholder's PIN to authenticate the transaction.

Additionally, during the COVID-19 pandemic, social distancing guidelines and limited face-to-face interaction limited SNAP participants' shopping options. The partnership between Fiserv, USDA, and its Electronic Benefits Transfer (EBT) transaction support was necessary. With EBT transaction support, SNAP participants can purchase groceries online, enhancing customer retention by improving customer satisfaction.

EBT transactions allow grocers to use a Fiserv PIN-on-glass solution to develop a digital PIN pad to verify their transactions. This integrated solution enhances workflow efficiency. Also, this partnership is the only USDA-approved solution that enables grocers to accept customers' EBT payments online, resulting in a monopoly market.

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Airbnb and Flipboard 

Airbnb is a platform that helps people find other people who want to rent their homes, cabins, beach houses, and so on worldwide. Flipboard is a news-reading app that gathers articles from around the web and delivers them in an attractive magazine.

The concept of the Flipboard and Airbnb partnership was pretty simple. Flipboard promoted Airbnb in a natural way that fit the right content and to the right audience. When you open the Flipboard app, you can explore and 'heart' Airbnb stories to win a free trip.

Airbnb and Flipboard's partnership is great because Flipboard can encourage people to use Airbnb whenever they are on a trip and looking for cheap housing.

Flipboard utilized several marketing strategies to ensure enough traffic, from targeted emails, display, and video ads to push notifications and social media, both on and off Flipboard.

PwC and AXS Lab

PricewaterhouseCoopers, or PwC, is a professional multinational service network and accounting firm. AXS Lab, a client of PwC founded by Jason DaSilva, is a social enterprise that has built a coalition of organizations and individuals to boost the inclusion of people with disabilities.

DaSilva uses a wheelchair due to multiple sclerosis and wanted to create a platform for other people with mobility impairments to tell their stories. In the US alone, 1 in every seven adults is affected by mobility disability.

With this problem in mind, AXS Lab and PwC's digital team launched AXS Map, a user-friendly crowdsourcing platform powered by Google Maps. The goal of this platform is to use innovation to map the accessibility of different places to help people with mobility or vision-related disabilities navigate the world with ease.

AXS Map is backed by web app users who rate the accessibility of locations like grocery stores, train stations, restaurants, coffee shops, and so on.

The PwC and AXS Lab partnership was a success, as it has positively impacted how several businesses learn and operate. As the web app develops and expands, companies will discover how to serve disabled and differently abled individuals best worldwide.

Uber and Spotify 

Another perfect example of a successful partnership business agreement is Uber and Spotify. Uber is a transportation service provider that redefines how people get from point A to point B. Spotify is an audio streaming and media service provider.

The partnership allows users to connect to their Spotify account and stream their favorite tunes while riding in an Uber.

This partnership aims to enhance customer satisfaction by allowing Spotify users to engage more personally by linking their Spotify account while in an Uber. If the user has an active subscription to Spotify, they can enjoy this service and even start listening to music before getting into Uber.

As a result of this partnership, integrating Spotify enhances Uber's competitive advantage over other ride-sharing services. Uber and Spotify can increase brand recognition and awareness to a much larger audience.

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Advantages of Business Partnerships

Several tech businesses go into partnership because of the additional value it brings to their offerings and customer experiences.

Below are some of the advantages of a business partnership, including how sharing resources can enhance effectiveness.

Better Decision Making 

As the old saying goes, two heads are better than one when tackling problems. In a partnership agreement, various teams, such as sales and success teams, bring unique perspectives and experiences. If a conflict or debate should occur, you and your partners can call upon your diverse perspectives to reach a far better conclusion.

More Available Funds for the Business

Every business needs funds to grow. When you partner with other businesses, they will definitely bring something to the table, which is often cash. Your company will be able to use the investment of funds to do things like buy more equipment, fund research, or improve on a sales strategy.

More funds can also help the business attract more investors. Additionally, partnering with the right entity can help you enhance your business's ability to borrow more funds.

Bridge the Gap of Expertise and Knowledge

No business is an island. Even though you may deliver good stuff to your consumers, that doesn't mean it can't be improved.

This is where partnership comes in. Partnering with a tech partner opens the door to new levels of expertise and knowledge. A good partner will bring the experience and skills you lack by creating joint ventures or integrations to help you grow.

Lower Tax

Partnerships can also save you on tax. In a partnership business, you're required to report shares on an individual tax return.

This means the profits made from the business are taxed once at the personal level rather than twice, as in the case of a corporation, which is taxed at both the corporate and personal levels.

With a partnership, you also save costs by not paying the annual filing fees that come with corporations, which can be very expensive, sometimes.

Disadvantages of Business Partnerships 

While people often enter business partnerships because of their potential advantages, it is equally helpful to know their downfalls to prevent the business from spiraling into an inevitable failure. Partnerships can sometimes turn sour due to various factors, making it crucial to understand the dynamics involved. Below are some of the downsides of being in a business partnership.

Liabilities

One disadvantage of a partnership that worries everyone is the risk of liability. Your assets (even personal ones) are at risk in a partnership agreement.

For example, if the business runs into excessive debts, the partners are responsible for paying them. This can place a burden on personal finances and assets and is the primary reason many businesses form a limited liability partnership or, even better, a corporation.

Risk of Disagreement 

Collaborating with partners in a business is great until there is an unfixable disagreement. When there's a conflict with partners in a company, running it effectively will always be a struggle. Conflicts can arise from many things, like how to spend revenue, what business strategy to adopt, how to expand the business, and so on.

Loss of Autonomy

A business partnership agreement means you share ownership and control over the business with your partners. This also means that any important decisions you make must be made jointly.

Before signing a partnership agreement, you must be comfortable compromising or relinquishing specific business ways. 

Vulnerability of Departure

If a partner retires or withdraws from the business, it will affect its overall stability. A partnership agreement also provides for a buy-out if a partner decides to withdraw.

Note that shelling out the funds to buy out all the partners' assets may cost you a lot of money.

Looking for Joining Forces and Implementing a Business Partnership?

If you're looking for a way to increase your business's revenue, it's time to consider a partnership. However, understand that entering into a partnership agreement is not as easy as it sounds. Engaging in a discovery process with potential partners is crucial to identifying their specific use cases and ensuring that the API is designed to support those needs.

You'd have to make many compromises and give up some of your rights in the business. However, if you can successfully onboard your partners, they will be operational quickly, which will impact your overall revenue.

To achieve this, you need an effective PRM solution such as Kiflo. A tech partnership program can help cultivate collaborative relationships between SaaS companies. At Kiflo, we provide your business with an extensive partner onboarding process and everything else you need to keep your business running successfully.