GTM Business Development with Global System Integrators (GSIs)

In enterprise B2B SaaS world, System Integrators have incredible scale, with a footprint across hundreds of accounts often the largest businesses around the world. Given their scale and presence, they are called Elephants in the tech industry, often influencing multi-million dollar deals with their strategic insights, strong relationships and in-depth knowledge of various technologies in the industry. Some of the common household names include large Global SIs (GSIs) like Accenture, Deloitte, CapGemini, Kyndryl, Wipro, Infosys, Cognizant and many regional ones that are specific to certain geos like Asia Pacific or certain sectors like Public Sector/Defense. Here are some thoughts on developing a GTM and Business Development Strategy to work with GSIs.

The Value Proposition of GSIs

Most B2B SaaS product requires a complex set of services to activate, deploy a product in a customers IT environment. These then need continuous maintenance and upkeep to support critical business processes. Depending upon services complexity, technical competency required as well as frequency, a customer may choose to either handle it themselves (DIY — Do-it-yourself) or Outsource to a services vendor. Here is where GSIs offer a great value proposition.

Scale through resources: Most GSIs have large technical teams competent in emerging technologies like gen AI (LLMs etc.) , Multi-Cloud (AWS, Microsoft Azure, Google Cloud, VMware) , CRM (Salesforce, Hubspot etc.), ERP (Oracle, SAP) technologies, that are in demand in the industry due to the technical complexity and scarcity of skilled professionals.

End-User Influence and Relationships: GSIs are heavily engaged across the industry, specifically in large companies, geographies where they have significantly more influence than B2B SaaS vendors both due to their longevity of engagements as well as demonstrated technical competency. At Salesforce, VMware and other companies sales leadership actively collaborates with GSIs to nurture and close out multi-million dollar deals.

Customer demand alignment: GSIs fundamentally have a simpler business strategy — align relentlessly with the customer needs, arguably the best way to ensure the product or service is always addressing an acute customer requirement. Coupled with their scale, GSIs typically have a strong pulse on customer demand and emerging trends.

Industry Alignment: GSIs service model is aligned with high growth industry segments like financial services, healthcare, manufacturing, retail with account teams, services delivery, business development teams aligned with a strong vertical industry focus. For horizontal SaaS vendors this is a complementary capability that helps them take advantage of a GSI partnership by expanding into vertical solutions without having to design complex solutions by industry.

Lets examine this in the context of customer types.

Customer Segmentation

Large enterprise: Most large companies have significant IT spend with the major B2B SaaS vendors like Salesforce, AWS etc. A number of business needs often criss-crossing business units, geographies are serviced through digital technologies whether it is Cloud infrastructure (AWS, GCP, Microsoft), CRM (Salesforce, HubSpot), HCM (Workday), ERP (Oracle, SAP) Systems or point IT solutions. The nature of B2B GTM motions ensures that IT footprint expands over time. Typically multiple GSIs, Partners and Professional Services teams from multiple B2B SaaS vendors are present at any point in various stages of completion of services projects. The mindshare and relationships that GSIs possess are incredibly helpful in driving new license/subscription spend. However this is also a high friction endeavor where in-house professional services and GSI teams often conflict for same large transformation projects. The most successful B2B vendors have typically partnered to drive higher margin product sales vs services, leading to complex GTM motions where GSIs influence deals, Co-Sell their services with vendor solutions, sell Managed-Services packages etc.

Small & Medium Business: In the SMB space, GSI presence is typically light with the few projects focused on large multi-year deals either managed services or implementation projects. For most SaaS vendors this is a segment which continues to challenge margins and retention. Salesforce is one exception with a number of out-of-the-box capabilities delivered through their product and AppExchange platforms.

Mid Market Commercial: The middle tier of customers are typically heavily involved with a few SaaS technologies like AWS Infra, Salesforce etc. In these scenarios there is typically 1 or 2 GSIs that are heavily embedded since the customers typically lack the bandwidth to engage multiple GSIs. The vendor motion is typically to design Co-GTM motions with GSIs focused on services wrapped around B2B vendor solutions.

Different motivations for GSIs

Yet another element to review is the priority for the GSI. Not all GSIs are same and it is necessary to develop a good understanding of their priorities. The major motivation for GSIs is to increase services revenue which constitutes 70–80% of their revenues — these may include low margin implementation services, higher margin advisory, technology consulting or managed services. The fastest growing area for most of the GSIs today is Multi-Cloud Infrastructure and AI/ML analytics services.

Services Portfolio Growth: Expanding their Services business is their primary motivation. The individual strategies can vary within the GSI market — some focused on low margin implementation services while others especially the larger ones like Accenture, Deloitte are focused on large transformational projects, advisory services while outsourcing their lower margin implementation work to other GSIs.

Managed Services: Not all GSIs engage in managed service offerings, however this is a profitable endeavor that allows GSIs to supplement a customers capability with their in-house technical resources that address either high-demand technologies (multi-cloud, AI/ML, Infrastructure etc.). This is more likely the business model that works for mid-market customers that do not want to invest in large technical in-house capability but prefer to focus on their primary business competency. There are likely implications for the customer like too much dependence on GSIs and Managed Services teams but this is often a strategic choice.

Technical Competency: GSIs are often investing in new areas of growth that look promising and will lead to future business. As the organizations with a good pulse on the customer priorities, GSIs accurately guess the future demand areas in services and use customer engagements to build technical competency.

GTM and Business Development with GSIs

• Basic Transactional relationship — The first step for any B2B SaaS vendor is to establish a transactional relationship that is purely focused on selling products and services to the end customer. GSIs can be a force-multiplier in large transactions and accelerate deals, close ELAs and help with the selling process. Often times this requires a B2B SaaS vendor to work with GSIs in customer cultivation, pre-sales activities etc., with little to no incentives at stake.

• Co-Sell/Influence Bookings — The nature of GSI Services and Managed Service Offerings are tied closely to the vendor offerings. Hence most GSIs collaboratively work with the vendors to create win-win deals that are positioned to the end customer. While Co-Sell is a commonly used term, it can be differing levels of capability. At the low-end of the spectrum is Co-Sell where GSIs and SaaS vendors share pipeline information that is then reviewed regularly in joint meetings and account planning sessions. There is no incentive or structured programs that compensate GSIs for working on the deals. The resource commitment on either party is low and in a margin contrained environment maybe the preferable way to work with GSIs. On the other end of the spectrum is a high-touch approach with strong alignment with joint GTM design — customer engagement, deal pitch and deal closure activities that ensure the GSIs are well compensated to push the SaaS vendor products with compelling programs etc. This is however resource-intensive for SaaS vendors with GSI management teams, programs, incentive tracking etc., all adding to the cost of sale.

• Co-Program Development — For select technologies that are lagging in adoption or early stage, SaaS vendors often co-design programs that factor in business strategies, GSI collaboration and appropriate incentives. These incentives are aligned with the intended activities that are expected to be driven by GSIs like product activation, consumption activities, discovery workshops etc. GSI teams work closely with vendors in fulfilling activities and incentive alignment.

As a general rule the more GSIs work with the B2B SaaS vendor, the more resources need to be deployed and the incentives need to attractive enough for the GSIs to dedicate teams with the strategy.

Considerations for a B2B SaaS Vendor

Strategic Priorities

Identify your strategy as a B2B SaaS vendor — which technologies are you focused on ? how does it vary by customer segment ? what is the desired behavior or activities for your company, partners, GSIs ? The more prescriptive the ask from the GSIs, the more likely the GSI partnership will yield successful outcomes. Having a clear alignment will dictate the specific GSIs to partner with.

GSI Competency

Evaluate the GSIs based on their competency and alignment with the strategic priorities. Develop a short list of 5 to 10 GSIs that have the ability and the likely interest to partner. Most organizations have limited bandwidth and it is necessary to focus on the deepest and most impactful partnerships.

Economic Value to GSI

Develop a good financial and economic view of the benefits vs costs from a GSI perspective. Most GSIs operate on razor thin margins and it is important to think about the P&L for their business. Typical considerations include pass through margins, co-sell benefits, activity based incentives, Front End vs Back End incentives etc. Often times it is the large deals with services opportunities at stake. However beyond that there are also hard incentives that will be needed e.g., selling incentives, activity based incentives, technology enablement etc.

Customer Engagement Motion

For the desired strategy and outcomes it is necessary to consider the desired customer engagement activities. Often times SaaS vendors and GSIs have their distinct sales motion but combining them to create a compelling vision for the customer could help the key decision makers develop an end to end view of how the digital transformation will unfold and which teams will support the various activities involved.

To enable this most GSIs develop a “Digital Transformation Point of View (POV)”. This is intended to show the end customer a vision of current state, future state and how the technologies under consideration can create significant business value. Most B2B SaaS Vendors spend significant man power embedding their technologies into the GSI POV. Of course delivering this to the end customer through discovery workshops, deal creation, deal support, sales activities and closure all need to be considered to ensure a good customer experience.

Partnership Governance & Execution

Finally think of the structure and program governance required to establish a partnership cadence. For teams working on a common set of goals, priorities and activities, it is important to run the typical QBRs, monthly, bi-weekly meetings where each team can remind the other of the program goals, progress and eliminate roadblocks on their way to a strong mutually beneficial partnership.

GSIs can be a true force multiplier and a strong GTM strategy could be the difference between a growing ecosystem or a shrinking market.