In 1912 the RMS Titanic Sank after hitting an iceberg, one of the few stories to emerge was how the ships musicians played to calm the passengers until it finally went to its watery grave.
The question I ask each reader of this post ‘is your business slowly sinking like the violin players of the Titanic’?
Hardware and on-premise services have always been a staple of the IT industry where resellers, MSPs (and any other label you choose) earned margin through a transactional relationship with a customer, usually the IT function.
This transactional sale typically led to a subscription support service usually comprised of telephone and on-site software and hardware maintenance services, including a help desk.
The onslaught of cost driven centralised computing caused by cloud and infrastructure as a service has not been as all conquering and encompassing as many predicted. Whilst the preceding statement is not necessarily an indicator of where I think market disruption will go long-term it is my belief that cloud has not fulfilled its predicted rate of adoption by the ultimate consumers of IT services.
One of the terms I hear pedalled out by laggard marketers is cloud will ‘become a utility’ – that computing will be ‘switched on and consumed like electricity or water’. Has anyone asked these marketing types what is the reasoning behind these statements or at least requested a breakdown or explanation?
The answer is actually quite simple; every computing device we use is subject to miniaturisation, which has been evolving over the years. An often-quoted fact is that the iPhone has more computing power than all of the systems available during World War Two across all powers. Therefore as devices juxtapose and become multi-purpose (think Camera, Walkman, Mobile Telephone, Web browser which is now your smart phone) we are entering an era of low cost computing that will be cheap without margin enrichment.
Understand that every industry has gone through a major disruption
Looking ahead the questions are; Will an IT reseller that is playing at the tail end of a late majority marketplace still be around tomorrow? And when is this journey going to be eclipsed by on-demand services?
Who remembers the local pub, barber or supermarket cork board with all the local traders’ business cards on? On-demand is being driven by the millennial generation -those who have never been without the Internet. They want it now, and so do all those local companies vying for services from the cleaners to the gardeners. Everyone wants to access the on-demand generation. Think about the rise of UBER and AIRBnB and how the journey for the customer is an experience.
I am not advocating that IT resellers transform into marketplaces, just that consumers of IT will change the role of the CIOs and the CTOs will evolve. Customers want to be advised (sorry shiny suited salespeople). They want to work with brands that inform and consult. The transactional relationship of old is like a distant relative, always turning up to the reading of the last will and testament, to bag some cash and run. Today you need to turn up and be a friend to your customer, working with them on a subscription basis. Marketing needs to not be so ‘sell-sell-sell’ it is about providing information to elicit choice.
So how do you move forward? First look at what your business core is, if it is transactional decide on the longevity of that marketplace. Once you have decided on your transactional exit, look at disruptive cloud providers and application suites you can leverage to gain new market share. Speak to your IT distributors and chat through your aspirations and benchmark against best practises.
Understand that every industry has gone through a major disruption. The cloud in my view is only version 1.0. The next stage will be all about the applications and services running on these clouds and how they are consumed.
Allay your customer’s fears and trepidations around security and access concerns, help them evolve with you and above all be the local trusted partner you have always been. There is a reason your customers have purchased from you previously, no cloud provider in the world is capable of supporting a worldwide SME client base and being successful. This puts the local partner at the forefront of cloud adoption and support and management.
In summary, the server that sat in the corner has become a virtual box held in a large data centre. The services and support a reseller provides have just moved to a different location.
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