"The whole is greater than the sum of its parts," a quote attributed to Aristotle, aptly summarizes what strategic business alliances are about.

Unlike mergers and acquisitions, strategic alliances are two or more businesses joining together to offer customers products and services beyond what one of the businesses could offer on its own. The businesses have complimentary products/services but are not direct competitors.

"At the same time, each business has the ability to deliver their own product or service to the market as well," explains Wilfried Van Haeren, CEO of Digital Fortress Corporation, www.digitalfortress.ca. Digital Fortress, supplier of high-availability Internet, data centre, and networking solutions, has formed a strategic alliance under the banner Fortress IT Group here in London.

Today there are four companies in the alliance: Digital Fortress, Fortress Data Vaulting, providing customers with backup technology to secure their data; Predictive Networks, which monitors the performance of application networks for clients; and Echidna, managing corporate data and marketing for customers. A fifth partnership is in progress with a company in Alberta, which will allow the alliance to offer services across Canada.

Because the businesses have complimentary services that their clients are generally looking for, the alliance allows each company to refer the other. Each company can also hire employees from their strategic partners, providing them the opportunity to offer additional services to their clients under their own business umbrella.

There are no set rules about how alliances should be structured, but Van Haeren suggests a written agreement outlining how the alliance will work is always a good idea.

Some things to consider:

• Will there be referral fees between alliance partners?
• Will you be hiring employees from the other company on assignment basis and, if so, what is the fee structure?
• Will you be asking the other company to put together a formal proposal for the project outlining anticipated timeframe, budget, etc.?
• Will the businesses link with one another through their individual websites and, if so, how will this be done?
• Will the alliance be given a name?

It's also important to ensure that each company has a vested interest in helping each other, and the alliance, grow, and all put in equal effort to meet this goal.

As Van Haeren says, "You want to partners who pull the bandwagon, not just sit on it."