Building Cloud Services – The Great Channel Divide

August 20, 2010 at 4:19 am Leave a comment

A View from CompTIA Breakaway 2010

Beth Vanni, Director, Market Intelligence, Amazon Consulting

I love the CompTIA Breakaway event. Despite the fact that it’s often scheduled in really hot places in August (this year, San Antonio – 105+ every day), it’s such a great place to get a reality check on what issues solution providers are really facing.

I had the good fortune again this year to participate in the event in two ways. First, I facilitated a couple of breakout sessions – birds of a feather discussions among the solution provider members. The two topics for the breakouts were 1). How to more effectively use P2P collaboration to grow your business and 2). How to protect and increase loyalty with your install customer base. Both are meaty, timely topics. Second, I participated in an industry analyst panel discussing the major trends in the channel for 2011.

What was remarkable to me in both of these breakout sessions, and at the conference at large, was the disconnect from the vendors’ vision about the massive impact of the cloud and the huge services opportunity it represents for the channel and the general business readiness of the average solution provider attendee. In both of my breakout sessions, the biggest issue many of the partners articulated they were facing was how to get out of the onsey-twosey break-fix business; how to stop having to do on-site service for broken laptops, printers and routers for their SMB customers. This issue seemed equally applicable to those companies who had not yet ventured into managed services as well as those who had mature MSP practices. They wanted tips and techniques for how to recruit a new kind of customer – one that understood managed and cloud services. One that would stop negotiating with them for pennies on the dollar for every stinkin’ service call.

The advice these solution providers were craving had to do with business strategy, and how to build their overall managed services practice. It had little to do with what technologies to adopt. It had everything to do with customer migration strategies and how to hire the right people with a services orientation. No surprises there. As an aside, the training organization, MSP University, was there on site. They were holding their own MSP-focused boot camps in parallel to the conference. And the rooms were packed! The hallmark of their training touted the ability to learn the “tools to succeed by focusing on the 8 areas that are critical to IT practice success” – namely, leadership, financial acumen, organization structure, talent management, marketing, sales, services delivery and managing vendor relationships.

Then it hit me, right between the eyes. Despite the fact that CompTIA is one of the longest-standing and most respected independent associations in our business committed to increasing solution provider effectiveness and skills, many of their member solution providers are at the very first step of deciding how to migrate to just a basic managed services strategy – let alone some advanced cloud application or hybrid on-prem/off prem cloud service. They are deciding how to retool their business model from on-premise, product and reactive selling to a service – preventatively and remotely managed. Granted, 50% of these partners cater to SMB and 46% have $5m or under in annual revenues. But, wasn’t this the business model migration the vendor community thought the majority of smaller regional VARs did 2-3 years ago?

I call that the Great Channel Divide. And, it’s been that way for decades. The analyst and vendors are pushing emerging technologies, many of which change the dynamic for how consumers utilize technology AND how the partner has to provide services. And the solution providers are trying to figure out how and when they can respond, and if/how they’ll make money. The big open question is who is really responsible for helping partners migrate their business model: their leadership style, financial management, organizational structure and marketing techniques? Kudos to MSP University for tailoring a holistic curriculum addressing all of these. Many of the leading vendors task their channel sales managers with this business development and planning assistance – but are they really equipped to guide their partners across all of these elements? — especially if they themselves haven’t owned a small business or worked for a solution provider?

CompTIA’s Breakaway was a very valuable event for me and I think most of the vendors in the showcase. It helps us get our head out of the clouds and down to a ground-level view of where solution providers are today……. and what help they need from the industry to make it across that Channel Divide.

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