This rant comes courtesy of MetalMiner Co-Editor, Lisa Reisman. Lisa has extensive experience overseeing technology provider partnerships for SIs and consultancies.
Jason asked me earlier this week if I had a point of view on the question of when software firms take on their own consulting engagements (and staff) vs. when they "partner" with consulting firms. He suggested all sorts of strategic criteria used to make these decisions. But admittedly, I chuckled. I joked (as I was making our son's bed) that there is basically only one condition used to make such decisions: and that is the state of the economy.
It has been my experience that when the going is good, software companies want to "partner" and share revenue and focus their own efforts on product development, growing sales and implementation cycles. When the going gets rough, everyone goes back into "hoard the money mentality," and to heck with those "partnering" relationships. Now maybe I'm just bitter (though I tend not to think so), but I just remember my days as a consultant at Arthur Andersen -- when we were busy, everyone was our friend. I recall lots of fly-ins and partnering meetings all over the place. But when the economy hits the skids, "fuhgeddaboudit."
On the flip side, we've seen software companies in this space (think Ariba) acquire big-partner-consulting revenue practices (specifically, the Ariba practice at Andersen was acquired during the Enron mess, e.g. the last economic dip before 2008/2009). It would be interesting to watch Ariba's behavior now vis-a-vis their consulting channel partnerships, particularly if we hit a double-dip (which we believe is imminent).
I apologize to any organization that has committed resources and strategy dollars to defining their partnership strategy. I'm pretty sure though that if we plotted the economy to software firms / in-house consulting revenues and software firms / outsource consulting revenues we'd find a wax / wane cycle that correlates.