The Third Path: Why Technology Alliances Can Be a Smart Alternative to Organic Development and Acquisition
When technology companies map out their product strategies, the conversation almost always boils down to two options: build or buy.
Organic Development – The ideal long-term approach, where a company builds its own technology from the ground up. This is the obvious path for building IP and, thus, value.
Acquisition – The (theoretically) faster route, where a company buys another company to fill a capability gap or expand its offerings so that it can drive growth.
These are both valid strategies. In fact, they’re the default playbooks for product leaders everywhere. And they SHOULD be. But let’s be honest:
👉 Organic development almost always takes longer than expected. And when you read that, you need to place more emphasis on the word “always” than you do on the word “almost.” Even with well-planned roadmaps, unexpected technical challenges, resource constraints, and shifting priorities can delay launches by month—typically quarters (and sometimes years).
👉 Acquisitions are ALWAYS more difficult than expected. Integration challenges, cultural mismatches, product misalignment, incorrect assumptions made during due diligence, and customer uncertainty make M&A far riskier than the initial business case ever predicts. Many acquisitions fail outright, and even "successful" ones often take years to deliver real value.
So, what do you do when you can’t afford to wait for internal development and don’t want to bet the farm on a high-risk acquisition? What if time-to-market proves to be a challenge for the organic dev and/or acquisition?
You establish a Technology Alliance.
The Case for Technology Alliances as a Third Path
Technology Alliances offer a powerful alternative that companies too often resist. Some reasons for resistance are valid (e.g., a desire to own all the IP). Other reasons are not so valid (i.e., Product Group pride). Regardless of the validity of the reason, sometimes market pressure puts you in a place where the Alliance path is the best path (maybe the only one).
Rather than spending years building a solution from scratch or spending millions on an acquisition that may or may not work, alliances allow companies to:
✅ Fill technology gaps quickly – Access capabilities your customers need now without waiting for internal R&D.
✅ Accelerate time to market – Deliver solutions faster by leveraging an existing partner’s expertise.
✅ Test and validate market demand – Before committing massive resources to build or buy, an alliance can prove out whether a capability truly moves the needle.
✅ Reduce cost and risk – Alliances require far less capital and come with lower operational risks than acquisitions.
Real-World Examples of Alliances as an Alternative Strategy
1. Snowflake & DataRobot – AI-Driven Analytics Without an Acquisition
Snowflake is a leader in cloud data warehousing, but as AI-powered analytics gained momentum, customers increasingly wanted integrated machine learning and AI modeling. Rather than build an AI/ML platform from scratch or acquire an AI company, Snowflake formed an alliance with DataRobot to seamlessly integrate predictive analytics into the Snowflake ecosystem.
The result? Snowflake customers gained powerful AI capabilities without Snowflake needing to become a machine learning company overnight.
2. CrowdStrike & Zscaler – A Security Alliance Instead of a Merger
CrowdStrike and Zscaler are both leaders in cybersecurity, but they operate in adjacent spaces—CrowdStrike in endpoint security and Zscaler in cloud security. Rather than acquiring one another or developing overlapping capabilities, the two companies formed a deep technology alliance that integrates CrowdStrike’s threat intelligence with Zscaler’s zero-trust network access (ZTNA).
This alliance allowed both companies to offer a stronger, combined security solution to customers while maintaining their individual focus areas.
3. ServiceNow & Tanium – Closing IT Gaps Without M&A
ServiceNow needed to enhance its IT operations management (ITOM) capabilities, particularly around endpoint management. Instead of acquiring a company to build out that capability, ServiceNow formed a strategic alliance with Tanium, integrating Tanium’s real-time endpoint visibility with ServiceNow’s ITOM platform.
The result? ServiceNow customers benefited from improved security and asset management without ServiceNow needing to become an endpoint security company overnight.
When Should You Consider a Technology Alliance Instead of Building or Buying?
When it comes to driving new product capabilities, Alliances aren’t the right fit for every situation (not even close). But they’re an underutilized tool when:
🚀 Time-to-market is critical. If you need a solution in-market right away an alliance will almost always be faster than building or buying.
💰 The investment in development or M&A is too high. If the cost to develop or acquire a capability outweighs its expected return, an alliance lets you “rent” the capability instead of “owning” it.
🤝 There’s a clear complementary fit. If another company’s technology enhances your own without competing with it, an alliance is often the best path forward.
🔄 You’re not 100% sure you need to own the capability. A partnership allows you to test the market before committing to a long-term build or buy strategy.
The Bottom Line
Organic development and acquisition are both valid strategies—but they’re not your only options. Technology Alliances provide a third way that is faster, more cost-effective, and often more strategic in the long run.
So before defaulting to "Build it ourselves" or "Just buy a company", ask yourself:
💡 Could a well-structured technology alliance achieve the same outcome—faster, cheaper, and with less risk?
Chances are, the answer is yes.
