Smart MSPs no longer focus on promoting the sale of any specific product. In fact, some have abandoned product sales altogether, preferring to partner with someone to procure and provide products when needed. What they really need to do, however, is change the way they look at new product introductions.
When we only think about a given product as a good that might earn a marginal profit if we sold it, we're quickly reminded just how slim that margin really is. It's just not worth the effort anymore. Even if we do eke out a small profit, that profit is eaten up by credit we extend to our customer and the operations it takes to order, receive and process each product.
But Some Products Bring Opportunities
Equip yourself with a quick filter for new product announcements. Start by reading the first paragraph or so of the announcement and ask yourself which of your services you could wrap around this product. Can you:
- Consult on it?
- Design systems around it?
- Configure it?
- Prepare it?
- Test it?
- Install it?
- Deploy it?
- Network it?
- Train users and administrators on it?
- Provide ongoing support for it?
The more "yes" answers you come up with, the more opportunities this product offers you.
The simple fact is that most services MSPs offer to their customers involve or are attached to some product or products. The most fundamental service MSPs offer is monitoring. What do we monitor? Products -- servers, storage, routers, switches, modems and more. Similarly, we manage all those devices and more. Add software applications to that list, and that adds a substantial lift to our revenue, too. The bottom line is that MSPs do have an interest in products -- a deep interest.
Depending on whose numbers you're looking at, there are tens of thousands or perhaps even hundreds of thousands of Microsoft partners who know they're making less and less money selling Microsoft's products, including cloud services. But they remain partners. Why? Because they make so much money consulting, deploying and supporting those products and services.
The Correct Response to New Product Announcements
Once you've identified a new product that requires your services, the next step is to reach out to the vendor of that product. It may be a hardware manufacturer, a software developer or a services provider. Find your regional representative from that vendor. If all else fails, call the company's main number and find someone who can provide you with the name and contact details for that person.
Reach out to that representative to talk. Going into the conversation, keep in mind that channel representatives' lives have become much more difficult since the great rush from reseller to MSP. They have fewer active partners than before. Fewer of the remaining resellers are moving away from that model. As that happens, it becomes harder for channel managers to achieve their sales quotas. For them, a channel partner calling them is a gift, manna from heaven. They will greet you with open arms.
Whatever they may want to talk with you about, start by telling them about the services you feel you could wrap around their products. Ask them if you're missing anything. Are there other services you could be profiting from when you move their products for them? What do they think of your ideas? Can they punch any holes in them and help you improve upon them?
Press them to inform you about the value their channel program can provide to you. Market development funds sound great, but there are a few caveats you will want to insist upon:
- They cannot be based on sales volume. You're not planning to move any product in volume; you're planning to propose services and projects that include the product.
- They'll need to be willing to work with you on collateral and marketing activities. If they're not willing to promote your services along with their products, that's a deal killer. Ideally, the marketing should be about the value of your services and why you include their product in the solution.
- You'll want better access to their technical resources when necessary. That makes you more valuable to your customers. You used to get that access as a result of your sales volume; now you need it because you are an active proponent of using their products.
It's likely that any channel manager will approach you the same way they always have. For them, you can generate sales. They'll want you to know how much margin you can earn. You know better.
This Is Not a New Concept
For the vendor, this is the classic "influencer" model (but not the kind where someone on social media talks about how cool something is).
Probably the first vendor to recognize and reward partners for influencing sales was Citrix more than 30 years ago. Even if the customer bought the licenses elsewhere, Citrix would pay a healthy percentage of the cost to the partner who could prove they created the sales by influencing the customer to engage in a project. Influencer partners ended up having very low volume of sales. But, beyond payment, Citrix recognized these partners as full partners. They had access to all of the resources Citrix had.
This is the partnership you want to seek, and it starts with that first conversation. No, you're not going to sell volume, but you're going to include their product in your proposals and thereby pull through healthy sales. You'll be pleasantly surprised how many channel managers have already recognized how the world has changed.
Posted by Howard M. Cohen on April 17, 20230 comments
Let's read some tea leaves together, shall we? We're seeing sizable force reductions at many of our favorite partners' companies. We didn't really expect them, but still we don't really find ourselves surprised.
We also see very talented people in our channel suddenly seeking new opportunities. Some are high-ranking executives, but many are simply superb engineers and technologists. And some of those executives are superstar heroes of the channel. We wonder why anyone would ever let them leave.
This past summer we saw Microsoft split the channel chief role into three people. They say two, but few of us missed the fact that three people got new jobs. Many may have missed that the very top role in partner management went to someone, Nicole Dezen, who started out in device sales.
What To Watch Out For
If you're a very talented specialist at a large channel company, here are some other tea leaves worth reading. How much does your company still depend on product sales to achieve their profit goals? And don't confuse profit margin with profit; they're not the same thing. Margin refers to how much you get to keep out of every dollar you earn as a percentage of that dollar. If you achieve a whopping 50 percent margin on $10 in sales, you've still only made $5.
As they got to keep less and less of each dollar -- as their margins fell -- some companies made the shift to become IT service providers. They dramatically reduced their dependence on product sales and instead drove profits up by finding more and more engagements for their professional staff. Others focused their efforts in increasing the volume of their sales, reasoning, "If margins are cut in half, we have to double our sales to stay in the same place." Uh-huh.
I've written for both kinds of partners and it is incredibly easy for me to tell which one I'm dealing with. Those who believe product and licensing sales are their path to glory constantly had me write about how wonderful their partners' products were. Even when writing customer success stories, emphasis had to be on the vendor or vendors. In only some cases was that because the vendor was paying for the marketing in market development funds (MDFs) or other funds. For most of them, it was my observation that they really didn't understand their own value proposition, or how to promote it.
What the Tea Leaves Are Telling Us
Read your own company's marketing materials. If they're about what you do, you're most likely in a very, very good place. If, on the other hand, they're all about the manufacturers or developers of the products you integrate, your company is very likely on the track that ends up going over the cliff.
Here's why I say that. When our industry was very new, back in 1981, IBM first called us their "reseller channel." The "channel" went from manufacturer to distributor to reseller to customer. Channel partners made every effort to push products to their customers from manufacturers they had decided to partner with. Manufacturers pitched in to help, rewarding sales with MDFs in an incredibly backward strategy that offered funds to help promote sales, but only to those who had already sold. Potential was ignored.
Almost immediately, some "channel partners" saw discounting as their best (maybe only) available competitive strategy. Smarter partners who had invested heavily in servicing these products let them have those sales to hasten driving themselves out of the business. That worked extraordinarily well. When margins had cratered as completely as they possibly could, many "resellers" transformed themselves into "managed service providers" (MSP), an unfortunate label we'll deal with in another post. Some of those former "resellers" truly pursued a transformation. They hired people with new and better skills. They trained their existing people to provide more sophisticated services. They truly became providers of services.
The others had "MSP" printed on their business cards. This second group continues to make life difficult for those who took the change seriously. All too many customers fear "MSPs" because they've been burned by incompetence and unfulfilled promises. This second group also continues to believe that product sales will deliver sufficient profits to keep the lights on. This is why I say to read your own marketing and see where your company's emphasis really is.
Where Do We Go from Here?
When a specialist from a truly service-focused firm recommends a particular server, storage, router, switch or other product, they're no longer looking to "sell" those products to you. They're including them as part of their project recommendation.
In fact, a large and growing number of MSPs no longer sell products at all. Instead, they partner with another company to procure those products for their customers. They know that any profit margin that might be available on any given product sale will be eaten when they extend credit to the customer, or they run operations to order, receive, prepare and ship those products. It's a waste of their time with little or no return. At worst, it's a cost center to them.
If you're working for a company that promotes the products of their "partners," it's a good time to start looking at the marketing put out by other service providers.
There was a time when we had to drive volume sales to earn real partnership. Those days are gone. Today, smart partners create relationships with certain vendors around what they can do with their products. Vendors, in turn, look for those smart partners who drive excellent, and often large, projects that include their products. They look to partners to pull their products through in projects, rather than expect them to push them. Some even approach superior service providers with suggestions for new services they can wrap around their products. That speaks far louder to them than "margin" falsehoods.
Ask yourself why so many service providers no longer sell products at all. Do the math they did. See how much you actually lose when trying to resell products yourself.
You Cannot Successfully Do Both
There are still several companies making money selling products, but they have long ago abandoned trying to also provide the services that go along with them. They focus intently upon making product sales profitable for themselves by purposely not including "resellers" who would need a portion of the meager margins. They also continue to negotiate the back-end deals that have always enabled large distributors and catalog houses to keep their doors open.
Let them have that business. In fact, help them have that business. Help your customers buy from them. They may see fit to start referring services business to you in return. At the very least, they'll prevent you from reducing your own profits.
We started this column, The Evolving MSP, because we knew our readers couldn't stay still in one place for too long. You know you need to evolve. You need to focus. You need to specialize. Ultimately, "MSP" is pretty meaningless. You manage services, but what services do you manage?
As you accelerate your growth, we see you specializing in technologies you're great with. You're becoming known as the leader in your area of expertise. Much as medical doctors go from "primary care physician" to any of a large number of specialties, you're specializing, too. You will soon find yourself referring business to other partners with other specialties, and forming relationships with the generalist partners whose customers will ultimately need you.
You'll become cloud service providers, data service providers, artificial intelligence service providers, Internet of Things service providers, and many more. This is where we go from here. This is the way that's not only clear, but very exciting.
And we'll continue to suggest more new ways for you to grow here in The Evolving MSP. Perhaps you want to share some ideas with us for great growth directions that you'd love to see your companies move in. If they're RCP readers to begin with, there's a good chance they'll see your suggestions.
Posted by Howard M. Cohen on February 21, 20230 comments
My blog often talks about potential future evolutions available to MSPs in which the first letter changes from "M" to "C" as in cloud, or to "D" as in data. I've long predicted that each of our quality MSPs will eventually focus and specialize to continue growing their success. This time, however, I'd like to examine a change in the relationship that top MSPs enjoy with their clients that doesn't change the acronym in any way.
For many years, chief information officers (CIOs) struggled to shift their positioning within their organizations. Many were pigeon-holed into their role being part of the IT department.
Slowly, some aggressive CIOs pushed their way firmly into the C-suite, becoming integral parts of their organizations' senior executive teams along with the CEO, COO, CFO and so on. This was a major growth moment for CIOs, signaling acceptance of their role as strategic participants in the planning and management of the overall organization.
Departure from Product Procurement
Many MSPs began their existence as "resellers" of computer equipment. If they offered services, they were initially services attached directly to products -- installation, integration, implementation, configuration and more. Customers knew they needed these services, so sales resistance was minimal.
As available margins have evaporated, and the opportunity to sell higher-priced equipment has been eliminated by the overwhelming acceptance of cloud computing, reselling stopped being the primary driver of the business. Resellers made the mass migration to MSP.
As they enjoyed success, these MSPs moved further away from selling products at all. They saw that the credit they'd need to extend to customers would all but eat their meager margins. What was left would be swallowed by the operations required to purchase, receive and process the products. The smarter MSPs found other resellers to partner with for product procurement and let them carry the credit and overhead. Eventually, they stopped even seeking "finder's fees" for such partnering.
Mr. Fix-It
Examining the service portfolios of MSPs across the spectrum, one finds that many saw themselves primarily as operators and maintenance providers. They monitored their customers' networks and actioned any alerts or anomalies that arose. Smaller midmarket customers were able to enjoy the services of their own "IT department" operating their network at a fraction of the cost of staffing their own department. And the increased flexibility meant they could grow their networks as their needs grew -- a real customer win.
These managed service providers who were simply managing the services of the network experienced a serious case of arrested development. Over time, their growth stalled. They began to look around, confused why they weren't growing as they had when they first made their transition to MSP.
Those who joined channel communities such as CompTIA, IAMCP or the newer NS-ITSP found themselves talking to other service providers who had made the next transition. Only by seeing it could they recognize what they had failed to do: Evolve into strategic partners.
Just as most companies don't have extensive computer skills, many companies similarly lack strategic skills. They want to grow and prosper just like their competitors, but don't know how to. That phenomenon is spelled "o-p-p-o-r-t-u-n-i-t-y."
Leading MSPs began speaking with their clients not only about the latest and greatest technological developments, but also about the strategic challenges facing the enterprise. What in their organization needed to work better than it currently did? Where did they need to reduce costs without compromising operations? Could they streamline their workforce through automation?
Change the Conversation
This is an MSP evolution that requires no new tech knowledge.
Your clients want you to help them apply technologies to solve their challenges, improve their processes, streamline their operations, increase their sales and their profits, get more productivity out of every employee, and reduce their costs. All of these are business realities, not technology issues. There are no "speeds-and-feeds" here.
Your next best self is to become the business operations and management professional who specializes in constructing highly effective applications of technology to build better businesses. As Mack Hanan told us, "Show your customer that you're only interested in helping them increase their profits, and they'll gladly help you increase yours."
Posted by Howard M. Cohen on January 18, 20230 comments
Back in the day, when I was still writing "The Changing Channel," I was asked every year to take a look into the coming year and write about the kinds of changes and planning that partners should be considering.
Then the channel changed, pretty much completely. It's been a few years since I've suggested any "marching orders" for the coming year, but recent conversations have made me realize it would be good to discuss a few suggestions for 2023.
And where better to begin than with your customers? There are many things you no longer need to do for your customers.
Products
Many MSPs no longer sell products to their customers. They've found that the cost of credit quickly consumes the basis points of margin available, and the cost of operations to order, receive, prepare and ship products eats more than what's left. They see themselves losing money on product sales. Some have turned to resellers to provide products for their customers. Some have joined sales agent programs where they do nothing more than place the order.
The upside of this change is that MSPs no longer have to spend extra when a product arrives DOA. In fact, they can, in some cases, charge their customers to take care of the return and exchange.
Procurement
Some MSPs are turning the act of procuring products into a service. They help their customers select the right products, configure them appropriately, then process the purchase order to competitive sources, including former reseller competitors.
This puts those MSPs comfortably into the path of products moving through to the customer, where they can add asset management and maintenance services, as well as support and training.
Sales
One of the MSPs' most frequent and loudest complaints is that they have a really hard time finding quality salespeople. It may be, however, that the profile of an ideal selling resource in an MSP business has changed.
Since the MSP is no longer selling products, the 90-mile-per-hour salesperson no longer has spec sheets to point at to the proclaim the superiority of the unit they're trying to sell. Speeds and feeds are simply no longer part of the conversation. All of that exists in the cloud provider's datacenter.
The IT Sales Professional of Tomorrow
Stop for a moment and think about your engineers, technicians and your consultants as true, credentialed professionals, like lawyers, accountants or doctors. Who does their selling? There may be a variety of answers, but the most popular is that they do the selling themselves and build their own referral networks. Their clients prefer dealing with the actual practitioners because they know what they're talking about. They offer valuable advice and guidance -- not something most salespeople can do.
Personally, I've had the pleasure of working with thousands of engineers over the past 40 years. The best of them -- the ones for whom clients asked time after time, and who generated the highest billings -- were those who were as familiar with software licensing and hardware costs as they were protocols and configurations. They rightly see costs as something that must be properly managed for the customer to be truly satisfied. They don't serve the infrastructure. They serve the customer from a business perspective, as well as technical.
The question you should be asking as you head into 2023 is: How do you best train your technology professionals in the art of effectively managing customers?
A World with No Product Sales
Another change arising from your not selling products is that you no longer receive market development funds (MDF) to help with your marketing. You pretty much have to fund that yourself, and many MSPs either don't get, or don't value, marketing.
To build your business and make it grow, you need to market your services effectively. There are more and more coaches making themselves available to help you. Your next priority to carefully consider in 2023 is how you vet these agencies to determine which you're going to trust. There are many who will encourage you to do what can, at best, be characterized as retail marketing -- flashy postcards and the like. That isn't how professional services are marketed.
Professional services require relationship marketing. You need to obtain more than approval from your client. You need to earn their trust and their confidence. You're not going to do that with postcards.
New Marketing Strategies
Co-operative marketing, such as what you used to enjoy from manufacturers when you sold their products, requires at least two entities that will mutually benefit if they work together to market the outcome of the integration of their products and services.
Look carefully at every hardware and software product, and every cloud service that you include in the solutions you provide to clients. Invite them in for a conversation to celebrate the new year and talk about how you go-to-market together. You'll find that many of them have realized how the lack of an MDF-based relationship is hurting them, too.
Come up with ways you can market together. Discuss how to fund that, and what kind of return they could expect. Remember that your services are actualizing the value of their products. Without your installation and management, clients can't use their products. You have mutual interests. Leverage them.
You and Microsoft
2023 is a year in which you really need to closely re-examine and re-evaluate your Microsoft relationship.
Given that their new chief partner officer, Nicole Dezen, came out of their devices division, what do you think is the role they think channel partners should play? Selling Surface Pro and related peripheral accessories? Is that what you do?
When I was still an executive in the channel, we came to refer to our Microsoft partner account managers (PAMs) as "the Pipeline Police." All they did was come in and ask us, "What do you have for me?" What was in our pipeline? What was close to closing? And woe be it if we weren't prepared for that conversation with a completely updated pipeline on their system.
This is a great time to determine exactly what value you are receiving from your Microsoft partnership. In the past, I have recommended that some of you engage in benign neglect of them. You don't need that partnership to be able to include their products in your solutions, especially if you're not selling products at all.
Here's the thing: Some Microsoft partners are flourishing and growing in part thanks to their Microsoft partnership. They may know something you don't. The best way to find out what that is may be to participate in some of the many forums on social media that service the Microsoft partner community. If you attend conferences, spend more time conversing with other MSPs to see what you can learn from them.
There is definitely an art to managing any vendor relationship effectively. Commit to finding out what that art is, and remember that it is constantly changing. Happy holidays, and happy new year.
Posted by Howard M. Cohen on December 19, 20220 comments
Are you still selling IT products? I don't mean pulling them through in your projects; I mean actively promoting certain products to your customers. If so, you may already be finding yourself in the minority.
Many MSPs have stopped actively promoting and selling products because they simply cannot make much money doing so. In fact, given the credit they may have to carry and the cost of operations to bring those products in and out, they may even lose money.
"I'm making plenty of money selling products." Some of you are probably thinking this right now. You have no problem selling products at high margin. If so, I congratulate you and encourage you to keep doing so...but that doesn't really change what I want to talk about today.
Back in the Old Days
There once was a time when all "resellers" could make great margin selling hardware and software. Personally, I saw that end around 1985. Others say it happened later.
At that time, vendors visited our offices regularly to show us new products in hopes we'd decide to actively promote them, add them to our line card and sell significant volume of them. In some cases, we did. Everyone made out well.
The Race to the Bottom
Eventually, some resellers decided to compete solely on price and discounted products down to basis points. Everybody lost; nobody made much money. But vendors kept coming in and a big part of their case for selling their products was the big margins we could realize on them.
That didn't work out too well. The discounters had knocked those whopping margins out of existence. Eventually we stopped the vendor when they started talking margin. Soon, they stopped even trying.
The Great Shift
Over an oddly long period of time beginning in the mid-1990s and continuing to this day, resellers stopped identifying themselves as resellers. An overwhelming majority of them adopted the title managed service provider (MSP) and shifting their focus from selling products to selling their own services.
Many resellers learned early to foster great relationships with their vendor partners. These came in handy when they had a thorny technical problem, or needed a pricing variation or other accommodation for a customer. In part, that relationship was easy to build thanks to the volume of product the partner was selling for the vendor.
As MSPs moved away from selling products, their leverage with the vendors faded. But they still wanted a good relationship with many vendors to enhance their access to technical resources and cooperative marketing opportunities.
Many vendors remembered the "Influencer" programs of old where partners were compensated directly for bringing deals even though they didn't sell the licenses themselves. They were paid simply for bringing the project and closing it. The most insightful among them realized that influence leverage was still available to them.
Clearly, MSPs benefited from having great vendor relationships, and so did the vendors. Sadly, some vendors still show up talking about margins.
Smart MSPs Know the Value of a Product -- to their Business
What is the value of a product to an MSP? It's clearly no longer a margin on the sale of it.
To find the value of any given product, start by thinking about how MSPs make money: They make the greatest profit selling their own services, if they manage them effectively. Consultation, provisioning, deployment, configuration, monitoring, management, capacity management and many more.
They can also make money on services provided by others, especially when they bundle them in with their own and others.
How Do MSPs Increase Their Revenue and Profits?
It's said that there are only two ways to increase revenue: Either sell more to your existing customers, or create new customers. And many will tell you its five times easier to sell more to existing customers than to create new ones.
The sales cycle for new customer acquisition is much longer, starting with finding candidates, then connecting with them, learning more about them, proposing solutions to the and winning their trust. With existing customers you cut all that out and start at the next proposed solution.
Add cost reduction to the formula and you're increasing profits, too.
What Do We Sell Next to Our Existing Customers?
Here's where vendors can come in really handy. (Vendors, if you're reading this, here's the shortcut to getting MSPs enthusiastic about selling your products.)
When a vendor visits, simply ask them what services you can wrap around their products. Think about it: You make money selling your services. If you want the fastest path to increased sales to existing customers, what you need most are new services to add to your portfolio of offerings. If you can wrap your services around an innovative product, you've just found exactly what you need -- more new services.
You can even go proactive with this. Ask your customers what they need that you aren't yet providing. Their answers will guide you to seek the right products to add to your services in order to fulfill their needs.
Advice to MSPs and Vendors
With all due respect, too many vendor representatives are still sent out with insufficient training. They learn their products' speeds and feeds, maybe some strategic advantages, and that's about it. Rare is the vendor who thinks through what MSPs need most for their customers.
As a result, when you ask what services can be wrapped around a given product, the visiting rep may not know, or have any ideas or inspirations. That's what vendors have product managers for. Ask that rep to get you on a call with their product managers to see if they can answer your question.
Vendors, my strongest recommendation is that you take time to prepare for this question, and answer it for your preferred MSPs even if they don't ask. The more services you enable them to provide to their customers, the more love you will earn from them -- and the more sales.
Posted by Howard M. Cohen on October 14, 20220 comments
The latest changes to the relationship between Microsoft channel partners and Microsoft itself have drawn many reactions from the partners. Some have called it "a scary time to be a Microsoft channel partner." Some claim Microsoft is taking advantage of market conditions to "hit partners when they're down." Others are running petitions to get Microsoft to reverse these decisions. None of this is new.
In 2000, Microsoft introduced the Microsoft Partner Program (MSPP), which was widely greeted as something long-needed. Naturally, it had the same challenges as any new program, but everyone negotiated and broadly agreed to move forward together happily.
In July 2009, Microsoft replaced the MSPP with the MPN, the Microsoft Partner Network, proudly announcing it was "not something you join, but something you're part of." It didn't take long for partners to find the pipe bomb hidden in the bunting. It was commonly referred to as "the exclusivity rule." Qualifying for any of the Microsoft partner competencies always required that four people pass specific tests. Those same four people could take tests for all the Gold competencies and pass them, meaning the partner would qualify for all 30 of the then-existing competencies. At that time, I was working at a partner that had 17 employees and held all but one competency, making us the No. 1 partner in the Partner Finder of that era.
With MPN, the "exclusivity rule" meant that nobody could take more than one test for one competency. If you wanted another competency, you'd need four other people to take the tests. And four more, and four more, etc. At our shop, we would need at least 116 employees to retain our competencies.
Partners were aghast. Kind of like they are right now about the Partner Competency Score (PCS).
Here's the Question You Have To Ask Yourself
It strikes me that I could just reach into the archives and pull this next thought right out of articles from a decade ago. With the introduction of the MPN, partners said it was a scary time to be in the channel, that Microsoft was hurting its partners, that they weren't sure if they would stay in the program. There was talk of finding "viable alternatives." Back then, the question I suggested partners ask themselves is the same question you should be asking yourself now: What do you really get out of your Microsoft relationship?
Along with that question, I made the suggestion that partners consider treating Microsoft with the same attitude they were treating us: benign neglect.
Benign Neglect
My good friend Richard Losciale often reminded us that we needed to maintain a posture of being "patriotically adversarial" with Microsoft. We love Microsoft, but we need to keep Microsoft honest. We need to maintain a strong voice when it does something that might injure us. At one time, I agreed with him totally, but experience has confirmed my decade-old belief that the best way to treat Microsoft is with benign neglect.
The only way Microsoft can hurt partners is by reducing their return on the relationship. Every time Microsoft messes with partner-of-record percentages or other compensation programs, it reduces the amount of money partners can earn on transactions. So, stop doing transactions. Stop selling Microsoft subscriptions of any kind. Let somebody else sell them -- like, say, Microsoft itself. That's very likely what will happen anyway, ultimately.
What I'm suggesting is that you join the legions of "non-transacting" partners. When I interviewed Gavriella Schuster upon her exit as channel chief, she spoke proudly about how many non-transacting partners Microsoft was adding every month. Clearly, Microsoft is good with it. You should be, too!
What do you think customers think about Gold Partners? With MPN, that concept was supposed to be gone; you could have Gold or Silver competencies, but you could no longer be a Gold Partner. With the upcoming Microsoft Cloud Partner Program (MCPP), Microsoft is abolishing it again. How many customers actually accord value to that appellation? If you stop worrying about having that logo to stick on your collateral and are willing to let Microsoft keep the pittance you can make selling its subscriptions, you can be free to do as you please, let Microsoft do as it pleases, and continue to build a brilliant business. Just treat Microsoft and its demands with completely benign neglect and the war ends for you.
People Engage You for You, Not What You Sell
Even as I write this, I'm convinced I'm overstating the obvious. Your customers don't buy from you because you sell Microsoft, or HP, or Cisco or any other vendor's products. They engage you for your intelligence, your talent, your expertise and your experience. They respect your performance, not your line card.
Some of you may cry, "But what about the resources Microsoft provides?" Do you seriously believe you can't find those elsewhere? You can obtain all the training you want from excellent Learning Center partners. There are now businesses that have built themselves to provide you with the technical resources you may not yet have on your own team.
What I'm saying, ultimately, is that Microsoft doesn't build cars and your IT practice is not a car dealership. You don't need to align with Microsoft formally. Doctors don't align with Pfizer or other pharmaceuticals to be able to prescribe their medications when necessary.
If you don't like the new MCPP, refuse to join it. Become a non-transacting partner. Take a look at the partner programs finally emerging from Google, Amazon and others. More customers use Android than Windows. More customers run SAP than Dynamics. Microsoft is not the top dog in any segment of software other than perhaps Office, and it hasn't been for years. Use and propose Microsoft products to your customers, but let someone else sell the licenses and be the master of your own ship.
Posted by Howard M. Cohen on March 29, 20220 comments
What do you love better than when a plan comes together? When two plans come together, together.
We've been reviewing the RCP 350 list of the top U.S. Microsoft partners over the past several months, and we've also been focusing on what ISVs, CSPs and other partners are doing to help their customers be better prepared for a hybrid future in which some people continue to work from home, some work in the office, and some go back and forth.
In this case, RCP 350 partner Workspot shared the story of one of its clients, Applied Software, and how they're strategizing for this distributed future.
About Workspot
Workspot took a good, hard look at everything customers didn't like about remote desktops and solved it. Customers liked virtual desktop infrastructure (VDI), but found managing and running VDI complex and cumbersome. They liked the idea of a company that delivered VDI services for them, but found that most of those companies were small and had inadequate cloud installations and spotty networks. Also, depending on where the client was and where the provider was, latency could be a serious factor when you want a desktop experience similar to local networking.
The Workspot Enterprise Desktop Cloud platform delivers complete cloud desktops to any device anywhere. It deploys quickly, scales almost effortlessly, is operated by experienced professionals with years in the business, and operates on Microsoft Azure, Amazon Web Services (AWS) and Google Cloud Platform (GCP). Super-reliable, infinitely scalable cloud resources running on the most durable, resilient, high-speed networks in the world. Each user's cloud desktop is delivered from the provider's datacenter that's physically nearest them to minimize latency.
Workspot has a deep well of VDI legacy; the chairman of its board of directors is former Citrix CEO Mark Templeton.
Applied Software and Its Challenge
Founded in 1982, Applied Software Technology Inc. (ASTI) has grown to become one of the largest architecture, engineering, construction, fabrication and manufacturing system integrators in North America, providing a comprehensive array of solutions, services and consulting with a singular focus on helping clients achieve higher performance. Services include software, training, support, consulting and custom development.
Customers commonly use GPU-based systems to run ASTI's very high-end engineering applications. This works very well when everyone is collaborating in the office on their high-powered workstations. The outbreak of the COVID-19 pandemic made that impossible. ASTI needed to find a way to enable customers equipped with their own laptops to continue to use the software, which had much higher demands.
ASTI's chosen solution was Workspot. Furnishing customers with Workspot subscriptions, ASTI located each user's workloads and cloud PC desktop in the Azure datacenter nearest them. It found it had all the control it needed over information governance, load balancing, performance monitoring and, ultimately, customer satisfaction. All the benefits of VDI without the headaches, and with the added flexibility to enable GPU-level performance in regular PCs.
Even the variations in configuration of customer devices didn't daunt ASTI. A user needed a specific NVIDIA driver for their display? No problem. Management and rationalization of storage? Made easy. Even the heaviest workload demands, including enormous graphic design files, were easily handled.
Planning for the Future
Foreseeing a coming staff shortage in their vertical industries, ASTI is already planning to help customers compensate for their lack of people power with more remote compute power using innovative techniques they've been building on the Workspot platform.
ASTI has given its customers the best of all possible worlds. Totally reliable infrastructure, totally resilient, full-availability, high-speed global network, and totally virtual control of the entire compute infrastructure. It plans to partner with Workspot to deliver its software for a long time to come.
Posted by Howard M. Cohen on February 03, 20220 comments
The "New Year predictions" article has always been my favorite to write because it's totally forward-looking and filled with enthusiasm for the future. Traditionally, on RCP, it has been titled "Marching Orders." I'm glad we're changing it this year because I have always felt the old title reflected a very Microsoft-like attitude toward partners, basically telling them what they need to be doing at any time.
The most successful partners have traditionally ignored that attitude and determined their own futures.
Everything else I'll talk about in this post will be based on a very specific definition of the seriously overused term, "digital transformation." What I've seen over the past several years has been gradual but tremendous change in the ways people use technology to improve their work and their lives. The people have transformed. How they approach life has transformed. Much of technology has adapted to accommodate them. In my 40 years as a citizen of the channel community, this is the most exciting, fulfilling development I've ever seen in tech. This makes it critical that we approach the future with eyes, and possibilities, wide open.
Going forward, the most competitive posture anyone can adopt is one of continuous digital transformation.
The Critical Role of the MSP as Transformation Guide
Your role as the technology thought leader for your clients could not be more important. To be in a constant state of transformation requires always being current on emerging technologies -- including the value and advantages they can deliver -- and innovating ways that you can deploy them to your own benefit.
For most clients, this is an enormous ask. Most lack the time to keep up with the continuous flow of new developments, new applications, new technologies and new techniques our industry produces. They have their own jobs to do. Think about how much time you yourself invest in keeping current with emerging tech. It's a full-time occupation!
But that's the whole point, isn't it? You spend a major proportion of your time learning about what's coming down the road. You fulfill your role in the lives and businesses of your clients when you take that new knowledge and apply it to each client's business challenges. You do the innovating and propose the next transformation (and the transformation after that) to each of them. As transforming becomes your clients' constant state, they absolutely need you to keep feeding the momentum with new ideas, new applications and new ways to improve their operations and increase their profits.
Shifting Paradigms
The fundamental way you look at technologies and how they integrate into businesses will evolve this year. Here are a few ways in which changes we've already seen begin happening will flourish in 2022 with your help.
1. Augmented Thinking
There's that famous old story about Einstein's teacher's thinking he was simple because he never remembered things. When then the teacher asked Einstein why, he explained that he didn't see the point in memorizing anything he could easily look up. As mobile devices and the SaaS that serves them become ever more sophisticated, and AI improves its ability to anticipate, we see mobile devices coming closer and closer to Alan Kay's original vision of the Dynabook, the personal digital assistant that could bring its user any information they needed at any time from anywhere, all transacted in natural language.
Bill Gates' original vision for Microsoft was "information at your fingertips." Please remember, that was 1975. In 2022, that's table stakes. "Google" has become a verb. When just about anybody needs to know something, they google it. That's Kay's and Gates' visions fulfilled. It also changes who we are and how we interact with our world, profoundly.
2. Placelessness
The COVID pandemic forced many transformations to kick into overdrive. A quarter-century ago, the CEO of Novell told us, "Work is now an activity, not a destination." Since March 2020, that has become overwhelmingly true.
The word "workplace" is already on its way to being completely redefined. In 2022, more people will come to realize they don't know where the person they're working with is physically located. And they don't really care! The entire nature of employment will change as hiring decisions are made without regard to physical proximity to any given office location. Technologies will emerge to make the work-from-home experience effortless and pleasant. Collaboration will expand to include AI participants. The content of our thoughts will become "king."
Nobody will know exactly where you're at. And they won't care!
3. Cloud Ubiquity
Up until now it's been a safe bet that everything is hybrid, mainly because everything has been in transition from on-premises to public and private cloud. For some, 2022 will be the year in which they achieve complete migration and find themselves fully in the cloud. In fact, many companies credit their sudden migration to WFH to the pandemic, with the switch being significantly easier thanks to their previous migration to the cloud. It also accelerated the completion of many such migrations.
The operational and financial possibilities are exciting. Cloud ubiquity -- the point at which cloud is a utility computing platform similar to gas, electric, telephone and water -- may not arrive in 2022 but we'll see significant progress toward it.
4. Automation Everywhere
There are still those who fear automation will replace humans and put many out of their jobs. Others are finding that the automation of things that really should be automated -- repetitive tasks or those requiring little thinking or decision-making -- is relieving them of many burdens and freeing them to do more meaningful work. Their satisfaction with their working lives is improving as a result. As more managers find more low-level work to automate, we're seeing a dramatic expansion of technologies and techniques.
Especially when all compute operations are executed in the cloud, the need for automation skyrockets. I anticipate seeing more and more MSPs also become automators of their clients' IT environments, applying sophisticated scripting and technologies to make more operations work by themselves. People get to focus on their work and not on the tools they do their work with.
5. DIY Low-Code/No-Code Apps
Putting more capability back in the hands of users, an astounding number of new platforms have emerged enabling anyone who knows their business processes to map them into applications without writing a stitch of code. Most of these are point-drag-click solutions that take a "building-block" approach to give users great flexibility and, again, much more power. Coding is becoming outmoded.
6. A Subscription Economy
Even now, you can subscribe to several different brands of automobile rather than own one. You can subscribe to a robot floor sweeper that will request replenishment of its consumable supplies as needed without your involvement. Computer ink-jet printers will re-order ink in a similar fashion. Ownership may start become an unwanted burden in 2022, or it might take a bit longer, but the potential for a more agile customer experience is breathtaking. That which you do not own is far more easily replaced when necessary, or desired.
This is totally consistent with the evolution of computing. The goal for so many of our newest technologies is to keep everything loosely coupled. That is, the failure of any one component should not cause cascade failure of everything else. We are living in a time of literal dis-integration, keeping the hardware, the software, the data, the transport, the storage, everything completely divorced from everything else. This makes everything instantly swappable and removes all the dependencies that have caused so much trouble in the past.
There is so much more transforming all around us, but let's focus down on what I suggest you enter 2022 doing.
Think Differently
Not a new concept, but totally necessary as our transformational velocity accelerates. One of my favorite quotations comes from legendary sales coach Zig Ziglar: "If you're doing what you've always done, you're probably getting what you always got."
Actually, I submit that you're getting less. For 2022, do new stuff.
Posted by Howard M. Cohen on December 29, 20210 comments
In 1998, the emergence of desktop publishing, digital printing and the Internet created an unprecedented opportunity for authors: self-publishing. Author Solutions was at the forefront of this pivotal change in the publishing industry and continues to be a global leader in self-publishing. Its imprints have helped more than 225,000 authors realize their dreams of publishing and have brought more than 310,000 new titles to market.
Thanks to Its Partner, It Was Ready When COVID Hit
When COVID-19 hit and everyone was sent to work from home, Author Solutions was able to move all of its domestic U.S. employees home and have them fully operational very quickly. CIO Joe Steinbach credits that to important work Author Solutions had already done with its partner, Advantage Communications Group.
"On the U.S. side," explains Steinbach, "we moved everybody to the work-from-home situation in three days. We got everybody out, everybody moved, and that was because of the work we had done with Advantage on our phone system and some of the communication platforms prior to to the pandemic hitting."
Author Solutions locations in other areas around the world were a more difficult challenge. With spotty connections and poor bandwidth for many of those employees, the company adopted a hybrid model of satellite offices that were still socially isolated.
"We have a lot of people who want to want to stay remote," says Steinbach, "and we've worked out a lot of the the initial issues. It seems that, of my direct reports, the only people who really want to come back to the office are the ones who have kids at home."
Steinbach then observes, "We're definitely in a different world order. Before this happened, the concept of work-from-home environment or not having people directly in the office and all the misconceptions that are tied to that -- that people don't work unless you're hovering over them and all that -- has been dispelled and there's a lot more of an acceptance, and there's a lot more openness to staying in a work-from-home or a remote environment. The things that were more difficult were how do you deal with the the isolation and the mental health effect of people being separated."
Steinbach credits the creative community at Author Solutions for coming up with virtual happy hours and other activities that went a long way to resolving these difficult issues.
Taking Advantage of Advice from Advantage
Steinbach appreciates the opportunity to work closely with the team at Advantage. He describes how they took him through the various options available to him when Author Solutions was upgrading its communications.
"We didn't just change the the phone system," he notes. "We actually changed the whole way we interact. The new phone client allows us to now have group meetings, to have chat, and to do a lot of things that became absolute necessities, in a remote workforce situation." Those things have improved processes and increased responsiveness throughout their enterprise, including service operations and human resources management.
Sam Riegel, director of enterprise sales at Advantage, recalls that Author Solutions' original request was to integrate its phone system with contacts in Salesforce to eliminate a great deal of manual work being done to reconcile and update various database issues. He points out, "If you have up-to-date interactions and you're working across multiple teams, multiple time zones, just having a single source of truth where it's regularly up and available, it gives you a lot more power and flexibility to get those updates out quickly."
Steinbach expands upon this, adding that the process improved their security posture, providing secure systems and allowing them to share business information with various resources remotely with superior security.
Riegel observes, "The desktop matters more and less than ever before. If you're running virtual desktops, you've also got to take into consideration that you're doing voice and video in real-time communication. The flexibility of users using their own device is also greater than ever and can be done in a way that is both secure and functional."
As of this writing, Author Solutions has stabilized its operations with a remote workforce that is completely prepared to get the job done for the foreseeable future, thanks to its partner relationship with Advantage.
Posted by Howard M. Cohen on November 15, 20210 comments
In their next round of decisions, your customers are going to determine who gets to continue working from home, who returns to the office, and who gets to switch back and forth. No matter what they decide, you need to be ready to help them achieve their goals.
This presents a whole new potential path of evolution for MSPs, one that wasn't really anticipated when we first launched this blog, but now may become the preferred go-to model for many.
First, Pick Your Acronym
Since "CSP" is already taken by Cloud Solution Providers, our choice between Collaboration Solutions Provider and Team Solutions Provider becomes simple. The key word is "Team."
That's a word that has most recently gone through the same re-definition mill we've put so many words through: cloud, partner, transformation, down, container, bit, farm and plenty of others. The most recent one is team. And customers all over the world are already seeking better team solutions, so the opportunity for Team Solutions Providers is already exploding.
So Much To Sell, and So Much of It MRR
I'm the guy who keeps insisting that monthly recurring revenue (MRR) is not the holy grail of computing services, but it's certainly a nice chunk of the whole picture. I still maintain that every project you undertake should lead you directly to MRR opportunities, and reading the reports from those MRR services should clue you into new project opportunities. The longer you can keep that looping around, the better off you are.
The argument between centralized and distributed computing seems over because even the users are now distributed. Everybody is everywhere. You can't just drop a big switch and router into a building and provision everyone to their productive futures. You also can't simply focus on securing the threat surface at that office building. Each employee's home is now part of your threat surface.
Looking at it the other way, you will need to sell your customers far more sophisticated security strategies, though secure access service edge (SASE) holds some promise to keep some expenses down. Users will need more mobile devices and more small gear to connect their mobile devices to the network. And everybody will need new communication and collaboration platforms, new data sharing and data security solutions. Most of all, everyone's IT policies will need a huge overhaul.
Everything just described represents a lot of new revenue for you as a service provider, and there's plenty more we haven't touched on yet. And this is where we get to turn the tables a bit.
You as a Team Solutions Provider (TSP) or Maybe a Remote Solutions Provider (RSP)
Solving and serving the needs of remote employees goes way beyond the mobile strategies many of us have been selling for years. The interactions are more varied and complicated -- home office to office, or to conference room, or all three, or hotel, airport, beach...who knows?
The nature of collaboration is poised to change, too, and that's extremely exciting.
We'd like to know your thoughts, what you're seeing out there among the remote workers. How are you helping them be more productive and less vulnerable? What services have you been providing to them that you never delivered before the pandemic? How is your practice expanding and how are you evolving as an MSP?
Let's discuss it! If you'd like to participate in this conversation, see your name in print, impress your friends and associates and demonstrate your thought-leadership, please e-mail me at [email protected]. Just tell me a bit about your company and yourself, and I'll turn around an invitation to chat so I can share your observations with your channel community. This is a great community -- help make it greater!
Posted by Howard M. Cohen on October 01, 20210 comments
"Agile" is a poor little word. We've batted it around mercilessly these past several years. It's good to see it coming into its own now that we realize how agile methodology delivers more agility.
Those who've been around long enough will remember the early days of Cisco and its few competitors. You needed to run software to manage these new-fangled routers, but then you kind of became a sysadmin so it was cool. Then the genius idea came: Put that programming into firmware built right into the box. Much more efficient and tighter management, right? Yeah, no so much.
We spent more than a decade correcting some of our earlier errors. We pulled the intelligence back out of routers and switches, even servers and storage devices. We realized that we'd have far more flexibility if the programming were all back where it belonged, on a computer. Yes, just any computer.
Thus we've come full circle, back to what we now call "software-defined networking," which we originally called "networking," and "software-defined storage," which we used to call "storage." We've come so far.
McNealy Was Right
Scott McNealy, founding chairman of Sun Microsystems, often said quotable things. One of his best was, "Those who cannot do, can sort." Loved that one; didn't pick on teachers. But McNealy was perhaps best known for saying, "The network is the computer!" Turns out he was right.
In what may stand as the grandest example of scaling out, the cloud has become a laterally scaled computing engine consisting of a network of smaller computers. We're able to transport commands, data, everything at electron speed from place to place, computer to computer, in order to compute at unheralded speeds with unparalleled flexibility and, yes, major agility.
Of course, we've needed new software technologies to get us there, but software technology is what we do. Our industry has produced SD-WAN for software-defined wide area networking, and there's software-defined storage such as Gluster and Ceph from Red Hat by way of the Open Systems Consortium. Then there's also the big player, microservices in containers, which has completely redefined coding applications.
Welcome, Cloud-Native Software
As with anything else in our industry, we needed to give it a category name, and since it's all meant to run in the cloud, why not call it all "cloud-native" technology? So we did.
Now, this may encourage some of you to have new business cards printed with "CNSP: Cloud-Native Software Provider" under your name. You're certainly welcome to do that, as so many of our "MSP" colleagues have.
But more to the point is the idea of creating a practice that only delivers software-defined networks, completely virtual datacenters in which code moves around as quickly and effortlessly between cloud locations as it does along the internal data bus in a PC. The network itself has become the computer, just as McNealy predicted, and you can provide that environmental computing platform to your customers today.
You offer significant cost-savings as all the network adapters, routers, switches, CSU/DSUs, modems and other devices once again become cheap slaves of the overlording management software, which is at your command. You use commodity storage drives configured in resilient RAID arrays and managed by your software to do whatever you need them to do. Again, costs are slashed as functionality is moved to less expensive hardware and far more capable software.
Control feels good, no?
Redefining Your Role in Your Customer's Compute Strategy
Everyone wants to become more "sticky" to their customers. While that sounds messy, it certainly makes sense to perpetuate your role and your revenue stream. When the network, the storage, the code, even the entire datacenter are defined by the software, and that software is managed by you...well, how much more sticky can you get?
Most every problem is immediately solved with redirection or inexpensive "hot spares." Scaling becomes something the network just does naturally. Support software speaks to supervisory software to solve anomalies. When the software runs the network and you run the software, you also control your customer. Powerful stuff.
Frequent readers of this blog and my other writings may have noticed that everything is grounded in a deeper understanding of the past, which helps us better understand why things are what they are and where they're most likely going. But the most important thing we examine -- which is also the most important thing you must examine -- is the future. Stare hard into the future and decide how you want to get there. Plan for your journey. Be the architect of your own tomorrow.
Posted by Howard M. Cohen on September 08, 20210 comments
Among our top 350 Microsoft partners in the United States is an awardee that was also among the first members of the original Microsoft Certified Solution Provider program in the early 1990s. Its pioneering nature continued as it adopted Azure when it was still code-named "Red Dog." It also lists the development of its own cloud adoption framework before Microsoft's as further evidence of its leadership.
Applied Information Sciences (AIS) clients range from startups to Fortune 100 companies and include state and local governments, as well as defense and national security agencies. It approximates a sales mix of 50 percent government and 50 percent commercial. It also estimates that 95 percent of the services it delivers are centered around Microsoft technologies with a focus on building solutions that impact its customers' mission.
Broad Engagement
AIS engages broadly with Microsoft, with its marketing manager working closely with its Microsoft Partner Development Manager (PDM). Its salespeople participate enthusiastically in co-selling activities with Microsoft. Its office of the CTO -- which includes solution directors, architects, solution specialists and others -- maintains close relationships with counterparts in the Microsoft technology community. Its CTO is a Microsoft MVP who has worked with Microsoft for more than 20 years. And its chief consulting officer maintains strong active relationships across Microsoft's executive leadership.
It also has dedicated teams for various vertical industries such as insurance, financial services, health and life sciences, and government, who align closely with their counterparts in the Microsoft industry-focused teams.
AIS executives regularly participate in partner advisory councils (PACs) to help guide Microsoft's partner program development. It's also a member of the Business Apps Inner Circle.
Competencies and Awards
AIS' impressive array of competencies and record of awards won speak volumes to its commitment to Microsoft technologies and customer success.
Having recently grown from 500 to 700 employees, AIS has earned over a dozen Microsoft Gold Competencies, including Application Development, Application Integration, Cloud Platform, Cloud Productivity, Collaboration and Content, Data Analytics, Data Platform, Datacenter, DevOps, Messaging, Project and Portfolio Management, and Security.
Starting in 1996 as Microsoft Partner of the Year, AIS has consistently excelled over the years, most recently winning 2013 Regional Azure Partner of the Year, 2017 Worldwide Partner Award for DevOps, 2018 U.S. Partner of the Year for Azure Performance, 2019 U.S. Partner of the Year for Business Applications - Dynamics 365 for Sales, and the 2020 Worldwide Partner of the Year for Power Apps and Power Automate Award.
Investments: Partnering Beyond the Partner Program
AIS Chief Growth Officer Aarish Gokaldas says, "We don't ever come to an exchange with Microsoft empty-handed," emphasizing that the key to an effective Microsoft relationship is to always maintain a solid quid pro quo in which Microsoft supports AIS and AIS supports Microsoft. "We are investing heavily in resources," explains Gokaldas, "in terms of strategic personnel with technical talent."
Given the current shortage of available skilled individuals, Gokaldas adds, "We are investing heavily in training. We bring in individuals that don't know anything about the Microsoft ecosystem and we provide internal training and professional development to get them spun up to the point that they're able to then go support our clients and have a mission impact.
"We invest heavily in intellectual property," he continues."We are building out our own IP that we're overlaying on top of Microsoft's technology. And then we invest in things like our marketing in campaigns to get get the message out that provides mutual success to both AIS, as well as Microsoft."
Gokaldas concludes, "And we're investing heavily in our sales and proposal side, putting skin in the game in terms of building out solutions, building capture with client engagements. We are never just sitting on the sidelines and relying on Microsoft to go in and do the work, relying on Microsoft to go out and build out the solutions. We're in lockstep with them. Or in some cases, we are leading."
To Boldly Go
"We're not afraid to venture into the unknown," explains Gokaldas. "We were an early adopter of Azure before it was called Azure. We understood the value of cloud, the value of migrating off-premises. And we were an early adopter."
AIS values its role as a beta tester for many Microsoft initiatives, including the early Azure, Power Apps, Power Automate and more. "We developed and built out a business dedicated to Power Platform of things like Azure Kubernetes. We saw beyond the value when it was created to the value that would would eventually be achieved when it matures.
"We are very much working in conjunction with Microsoft at the forefront of the technological landscape," concludes Gokaldas. "So things like our cloud delivery framework, our cloud acceleration hub, our...product focused around self-service, cataloging for the Azure environment, are all things that we're able to bring to bear to a client that helps accelerate their Azure journey."
Posted by Howard M. Cohen on August 20, 20210 comments