When MSP Needs To Mean, 'My Strategic Partner'

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, 2023 at 4:28 PM0 comments

As Microsoft Partners Head into 2023, It's Time To Take Stock

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.

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.

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.

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, 2022 at 9:32 PM0 comments

How MSPs Should Work with Vendors Today

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. More

Posted by Howard M. Cohen on October 14, 2022 at 11:21 AM0 comments

From MSPP to MPN to MCPP: Microsoft Again Leaves Partners Asking, 'Why?'

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. More

Posted by Howard M. Cohen on March 29, 2022 at 11:17 AM0 comments

Enabling the Remote Workforce: Workspot and Applied Software

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. More

Posted by Howard M. Cohen on February 03, 2022 at 6:28 PM0 comments

2022 Channel Predictions: The 6 Paradigm Shifts that Will Force MSP Evolution

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. More

Posted by Howard M. Cohen on December 29, 2021 at 11:54 AM0 comments

Partners Enabling the Remote Workforce: Advantage & Author Solutions

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. More

Posted by Howard M. Cohen on November 15, 2021 at 3:02 PM0 comments

It's Time for Partners To Get Serious About Remote Work Solutions

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. More

Posted by Howard M. Cohen on October 01, 2021 at 10:51 AM0 comments

The Evolution of the Software-Defined Solution Provider

"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. More

Posted by Howard M. Cohen on September 08, 2021 at 9:48 AM0 comments

RCP 350 Spotlight: Applied Information Sciences

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. More

Posted by Howard M. Cohen on August 20, 2021 at 8:10 AM0 comments

Farewell to Gavriella Schuster: Is This the End of an Era?

This is not the first "exit interview" I've ever done with a senior Microsoft official; in fact it's one of quite a few recently. But it feels very different than the others, so I'm going to write about it somewhat differently.

For one, I'm writing it in first person which I seldom do, but this issue is very personal to me so I feel it warrants it. I've been in the channel for quite some time -- in fact, since it was first referred to as a "channel" back in 1981. In that time I've had the honor of knowing and working with many people who held Gavriella Schuster's position as Microsoft channel chief, which was, generally speaking, a corporate vice president of the Microsoft Worldwide Partner Group/One Commercial Partner, etc. That includes Phil Sorgen, Jon Roskill, Allison Watson and Sam Jadallah. In fact, it goes all the way back to Jon Shirley, who was the closest thing there was to a channel chief from 1983 to 1990 when he was president and COO of Microsoft. More

Posted by Howard M. Cohen on August 19, 2021 at 6:03 AM0 comments

RCP 350 Spotlight: AvePoint

For RCP 350 partner AvePoint, the company's level of co-sell achievement with Microsoft is a point of pride.

"AvePoint is one of the leading co-sell partners globally, and we're shooting for number one," says Christian Buckley, AvePoint's Microsoft go-to-market director. AvePoint is on the RCP 350, a qualitative list compiled by Redmond Channel Partner of the strongest Microsoft partner companies in the United States. More

Posted by Howard M. Cohen on June 01, 2021 at 1:31 PM0 comments