Every industry around the globe follows trends that create cause and effect relationships. Within the IT industry there has always been ebbs and flows, normally induced by following the vendors marketing funds.

[easy-tweet tweet=”Is the #Vendor #MSP love story coming to an end? ” user=”comparethecloud” hashtags=”cloud, strategy, IT”]

This time last year any IT vendor or distributor was calling for the recruitment of MSPs (Managed Service Provider) with the gusto of a town crier ringing out the latest news or the penance of a medieval monk wearing a hair shirt.

The issue I am seeing now though, is the lack of sales generated by the MSP channels, due to not being a sell-through organisation and only using IT hardware and software for their own multi-tenant consumption.

The knock-on effect within the vendors (aside from dwindling staff bonuses) is disillusionment within the channel functions, combined with prostrating apologies to traditional partners, who were left out of marketing funding pots for the last year.

Playing to the laggard space

every vendor salesperson has a family to feed and clothe, therefore they will always go where the money is to enable targets to be hit

My personal view is that every vendor salesperson has a family to feed and clothe, therefore they will always go where the money is to enable targets to be hit. Like the insurance industry many years ago, which changed from a commission, based to salaried structure, the days of the vendor shiny suited salesman being the middleman are slowly drawing to a close. The next two years will not see a major step change, what I am already starting to see is the emergence of a new vendor salesperson, one who is focussed on being essential to clients adding value rather than being coin operated.

The MSP community has tended with all this recent attention to act with quite a swagger, in my view this is akin to the dot COM period of many years ago. This swagger combined with the easy availability of vendor marketing funds for a simple MSP rebrand has now caused a period of stagnation and disillusionment.

Sorting the MSP wheat from the chaff

It is easy to apply a badge of honour to either a new or existing business; we have seen this consistently over the years from the over use of the word ‘cloud’ we are now seeing this with the term ‘MSP’. Having been exposed to a number of providers over the years there are a number of core differentiators that we see that defines quality from quantity in the MSP space.

[easy-tweet tweet=”There are core differentiators that we see defining quality from quantity in the #MSP space”]

The following is my personal top five points I use to define a quality MSP (not in order of preference):

  • Ability to pay salespeople.
    • A simple as this sounds an MSP model is based on subscription rather than sell-through margins. A service may make profits of only small proportions but over a period of time far outweigh sell-through profit margins. A model that rewards salespeople within this environment is key to maintaining growth.
  • Consultants not salespeople
    • It may seem that I aim taking aim at the sales function I make no apologies for this. Monthly or quarterly contracts have removed the once renowned ‘hit and run’ tactic of old. End-users (the ultimate product consumer) does not wish to be ‘sold to’, they wish to be informed educated and view the MSP’s front line staff as partners NOT self interested coin operated robots, who will say anything to win a deal.
  • Reformed Marketing
    • The days of ‘lets buy a marketing list’ then ‘email spam that list’ followed up by ‘lets cold call that list’ are over. If you are a marketer, residing in a vendor funding such actions, or an MSP executing such actions hang your head in shame. You are no worse than the annoying people we get tele-spamming our mobiles with unsolicited calls. Face it this kind of marketing went down with the titanic. Grow up, embrace social and digital be essential be informed but above all be relevant. The latest trend I have seen in successful providers, is the leveraging of big data and analytics to determine direction and strategy.  PS, many PR agencies are about as useful as a ‘cat flap in an elephant house’ think twice before appointing one.
  • Self determination
    • I have seen a number of hardware and software purchases made on the back of promises made by vendors of helping the partner sell-out to end-users. Whilst this is great for the MSP is there not a need for self-determination within an MSP, the saying ‘be cruel to be kind’ is prevalent here. If a MSP needs a vendor to sell out and market a service then that MSP is never going to get cut from the vendor crutch and determine their own destiny. From a vendor standpoint do not spoon feed your partners, educate digitally transform, train and plan and teach them to be self-sufficient. Or better still enable the distributors to do this..
  • Technical ability
    • Never before in the history of the computing industry has the technical team had a chance to stand upfront and be respected. I often hear that without sales there is a no technical department, my view in terms of client adoption and retention the age of the ‘techie’ is here. With clients tuning out to repetitive marketing automation, not bothering to meet salespeople, this is your time to shine!

Technical ability can be defined in many ways but my personal view is not some BS vendor accreditation that anyone can exam cram and pass

Technical ability can be defined in many ways but my personal view is not some BS vendor accreditation that anyone can exam cram and pass, but the ability to fix customers issues especially when under heaps of pressure. Like the ‘Ice Man’ in the movie ‘Top Gun’ this is your chance to move that coolness into a more pre-sales consultancy role. Cloud and SaaS services are moving so rapidly those technical departments that do not embrace change advise out-dated costly solutions are doing a client disservice. Aligning the technical department to agile business strategy, will be more prevalent in Q4 2016 my advice embrace this now and implement.

Neil Cattermull, Director of Cloud Practice, Compare the Cloud

Neil's focus is on developing cloud technology and big data. You can often find him advising CXOs on cloud strategy.

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