Virtually every type of VAR, MSP and other solution provider-oriented business is involved in some aspect of the cloud today. Many are reselling vendors’ offerings and providing some level of support such as procurement, implementation, managed services and even help desk. Others are being pulled into the cloud by their clients, and in some cases forced to manage some aspects of those solutions.
I can’t emphasize that last point enough. A significant number of channel firms remain in “reactive mode” when it comes to offering and supporting cloud services. That means the delivery system is not part of their overall solution portfolio nor do they actively support their customers in what has become a business critical aspect of most companies’ day-to-day operations.
Don’t believe that? Check out the recently released 5th Annual Trends in Managed Services report. The research team surveyed more than 400 MSPs and found that 44% of those firms only support cloud services at the request of their customers. In other words, between a third and half of managed services providers are not capitalizing on what is likely the biggest IT delivery model shift of our time!
Take a minute to reflect on those numbers. At first I was skeptical that the percentage could be that high, then I realized how many conversations I’ve had with MSPs (and solution providers in general) around their services portfolios and it seemed much more realistic. Quite a large number of channel firms I interact with have become so focused on their consulting capabilities that they don’t endorse any particular products or services anymore. Their websites and marketing/sales collateral highlight their flexibility (which is great) but not their particular skills or the reasons for adopting certain technologies and delivery systems. In essence, they’ve moved so far away from the former break/fix and product sales model that they are basically commoditizing themselves in a different way.
The issue is that few MSPs I’ve encountered really consider themselves pure consultants. That component of their businesses is essential, a differentiator, but they depend on recurring revenue to pay the bills and build equity. They have to balance their product and service “neutrality” with fulfilling the specific needs of their clients. But, since more than 90% of businesses are already utilizing the cloud in some form (whether they admit it or not), those discussions need to be more proactive. Today’s entrepreneurs and executives expect their solution providers to be more decisive. With technologies, policies and regulations constantly in flux, they need expert guidance as well as strong recommendations. They expect MSPs to quickly assess their infrastructure and processes, and then suggest the option(s) that best address their current concerns and future needs.
The cloud is becoming an increasingly larger part of those conversations. VARs and MSPs that wait until their current clients start adopting cloud services on their own may be missing out on a number of other opportunities as well. Businesses have been known to blindside their solution providers with “out of the blue” investments, especially after an owner attends a conference or seminar, but overall they are getting better at communicating their IT needs to one of their most trusted partners. Are you having those heart-to-heart business strategy conversations with your clients? Things like:
- Ways to improve their competitive edge. For example:
- Automation could help improve their own customer services and response times
- Mobile/cloud solutions could create a better end user experience
- What new or amended regulations might they be encountering soon?
- Implementing archiving and disaster recovery solutions today (including cloud options) may put them in compliance ahead of any new mandates
- By undergoing a comprehensive security assessment, providers can identify gaps and begin to address any and all issues that could cause major headaches a year or two down the line.
- Geographic and physical expansion
- How many employees will they be adding and where will they be located?
- Will remote and work from home be an option?
- What infrastructure improvements will they need? Consider how cloud and mobility might reduce investment requirements
- Provide remote to critical business application
- CRM for the sales team (remote teams prefer a cloud or other mobile option)
- ERP for the management team, to monitor and control front and back office operations
- Email access for all employees (or at least those who want or need to stay connected)
Of course, the “neutral consultants” community surely doesn't make up the entire 44% of MSPs who address their clients’ cloud solutions needs only when asked. I’ve encountered a number of providers who simply prefer to stick solely to the remote management and support part of managed services. They often partner with others to fill other IT service needs and, in some cases, those peers own the customers and take the lead. If it works, that’s great, but those firms are most likely going to face commoditization as call centers and help desks improve their own partnering capabilities and managed services offerings. Without cloud, hardware and other offerings, the profits of the specialized MSPs will likely take a hit as the competition heats up and customers look for a comprehensive provider capable of handling it all.
The takeaway from the 44% stat is this: if you aren’t actively promoting and supporting the cloud, or at least offering those services as part of your portfolio, you’re falling behind. Behind the trend, behind the competition and, most importantly, falling behind on the conversations you need to be having you’re your customers. MSPs and other solution providers need to get beyond their “cloud anxieties” or any other reasons for not proactively discussing the cloud. The opportunity clock is ticking…