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Partnerware Calls It Quits

Partner-relationship management vendor didn't address business needs.
Partner-relationship management vendor Partnerware Inc. has become the latest casualty of a rough economic climate and poor business strategy. The company, which ceased operations last week, had a tough time selling its wares to businesses that were more interested in PRM software that helped the bottom line than Partnerware's offering, which was aimed at partner recruitment.

Partnerware had a difficult time getting companies to sign up for its products, and it didn't disclose any new customers in the first two quarters of the year. The vendor embarked on a new business strategy last year, replacing its senior management team and sales team in the process. The company rebuilt its software for the Java 2 Enterprise Edition platform and abandoned its application service provider model shortly thereafter, in August 2001. It was too much change at once--the company managed to lure only one ASP customer to the new model.

"The level of difficulty companies encounter is directly proportional to the [size] of its customer base," says Louis Columbus, an analyst at AMR Research. "Companies need a deep bench of reference customers to turn to for sales upgrades."

Partnerware's demise isn't a shot in the heart of the PRM market, however. There's still ample opportunity for large suite vendors and niche providers alike. The key is to focus on order-management and order-capture functionality. Businesses want to be able to integrate PRM functionality with their supply-chain applications, Columbus says. "Companies are looking to compress order time frames, be able to configure complex products, and enhance lead generation to partners."

Vendors such as Partnerware competitor ChannelWave Software Inc. offer a better value proposition than Partnerware because they focus on enabling the overall distribution channel.

ChannelWave is a company "that has a strong chance of remaining viable," Columbus says. "The vendors that will end up getting picked off are those that stay purely focused on one small sliver of the PRM market."

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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing
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Carrie Pallardy, Contributing Reporter