Here at The Evolving MSP, we’ve been strongly advocating for the partner community to explore new, out-of-the-box ways to survive in the post-volume sales era. For Microsoft partners, that inevitably means finding a place in Microsoft's generative AI vision, whether that's through AIOps, AI-powered development with Power Platform or something else.
To help MSPs game-plan this transition, we're going to spotlight some partners that have made the AI evolution successfully -- starting with CrushBank.
Countering with a Contract Creates CHIPS
Thirty years ago, in 1993, the IT department at Hofstra University engaged a recent graduate to help them with their internal ticketing system. He, in turn, reached out to a friend who had just graduated from the University of Michigan (go blue!).
When the university offered to hire them both to run the facility full-time, the two students, Evan Leonard and David Tan, faced a difficult decision: take the job or continue along the path they had already chosen, which was to operate their own business. Leonard and Tan proposed a different approach: that Hofstra contract with their new company, CHIPS Technology Group, to operate their IT systems for them. Hofstra agreed.
This would be the first of thousands of contracts over the next 30 years during which CHIPS established itself as a leading reseller, Microsoft partner, then managed services provider (MSP) in the IT channel. Redmond Channel Partner included CHIPS as one of the Top 350 US Microsoft Partners in March 2021. Today, their mission statement is, "To make our clients' lives better by creating a secure and modern workplace."
The True Definition of an Evolving MSP
Leonard and Tan had always driven their business to be a leader in adoption of new technologies so they could bring them to clients faster and better than their competition. At first, they focused on guiding their clients to migrate from Novell's Netware to the new world of Microsoft Windows networking and servers.
When Microsoft Lync first emerged, CHIPS built its own Lync service to offer to clients rather than depend upon early cloud-based offerings.
When Teams was introduced, CHIPS raised the bar by ingeniously integrating it into their own IT Service Management methodology, creating a new team for every service ticket they opened. This kept all information about every ticket completely under control and instantly accessible at any time.
Artificial Intelligence Intellectual Property
When IBM introduced Watson, Leonard and Tan seized the opportunity to continue their path of applying the latest emerging technologies to their own operations, creating CrushBank in 2015 -- with Leonard as CEO and Tan as CTO -- to leverage Watson's machine learning (ML) and artificial intelligence (AI) services to optimize support delivery.
According to Tan, "Basically, what we do is ingest all the data across your organization into a back-end powered by Watson, IBM's AI platform, and we make it available quickly, efficiently, in real-time for your technicians when they're trying to resolve tickets. We also then leverage the same AI to optimize a bunch of other processes in your organization. Things like assigning type, subtype and item to a ticket, calculating budget hours, analyzing the concepts and entities with tickets that come in -- basically just making all that data available, unlocking it, enabling organizations to really supercharge their delivery."
Twenty-five years in the IT business informed every design decision Leonard and Tan made in developing CrushBank. "The whole idea," explained Leonard, "is that Level 1 techs don't have to spend as much time on Google to find the information they need quickly. They don't have to bother your best engineers with questions when the information is readily available to them from CrushBank."
"And that's one of the first impacts with CrushBank," he continued. "The client experiences fewer escalations and techs resolve tickets faster."
Putting CrushBank to Work in Your IT Practice
CrushBank describes its core product, CrushBank Resolve, as "the only application that uses Machine Learning and AI across multiple tools in the IT tech stack. CrushBank unlocks a firm's proprietary content and historical ticket notes to provide invaluable support information and then uses that same technology to categorize and classify client interactions for improved decision-making. Founded by industry leaders, CrushBank decreases escalations to Level 2, increasing productivity and customer satisfaction. CrushBank searches and categorizes more than 25,000 tickets every day."
In June 2021, Crushbank Resolve was integrated into ConnectWise Manage, making it available to firms using ConnectWise to run their ITSM businesses. CrushBank Resolve operates inside ConnectWise Manage to present the vetted and ranked answers from a rapid search of PSA/ ITSMs, document management systems, configuration management databases, SharePoint pages and publicly available information from Microsoft and Stack Exchange. As a result, Resolve compresses the entire user support process, improving the accuracy of IT support, boosting engineer efficiency and increasing user satisfaction.
In addition to improving IT engineers' productivity, CrushBank Resolve enables newly hired IT engineers to fast-track their value to the organization by:
- Accessing dark data, such as customer support records, which accounts for 90% of most companies' information.
- Presenting customer-specific support information proactively even before the engineer becomes intimately familiar with the client environment.
- Learning from every interaction to store experiences and improve future responses.
CrushBank Resolve also reduces the high cost of technical turnover. Whenever an IT professional leaves, the former employer pays 100% to 150% of the departing employee's annual salary to replace the outgoing talent. CrushBank's Resolve archives each IT employee's institutional knowledge in real time, minimizing the "brain drain" inherent in every departure.
Posted by Howard M. Cohen on August 30, 20230 comments
Based on this year's Microsoft Inspire conference, it seems that a cycle of predictions that started a dozen years ago has finally realized its full fruition. Back then, in 2011, Product Manager Bill Patterson did something no one else had done: He launched the 2011 version of Microsoft Dynamics CRM in the cloud before it was distributed on media. As then-Global Channel Chief Phil Sorgen explained to me, "Microsoft only has one job and that is to provide a platform that partners can run their solutions on." This, of course, presupposed that partners had their own solutions.
For his part, Patterson explained that we would someday see "an evolution of solution," suggesting that when solution providers refer to their "solution," they're referring to more infrastructure. "Customers demand business-relevant solutions," explained Patterson. But where would those come from?
Two years later, when he became corporate vice president of Small & Midmarket Solutions & Partners (SMS&P), David Willis implored partners to start thinking about creating their own intellectual property. He foresaw a time when, if you didn't offer your own IP, applications, data transfer methodologies, utilities and more, you'd miss the coming opportunity.
My only question has remained the same for all these years: How did they know? It is sometimes startling how accurate these Microsoft partner execs' predictions were. As reselling products became more of a losing proposition, smart partners heeded the advice of these leaders. They started building, packaging and marketing apps. They focused on verticals, which made their targeting laser-like. They became familiar and then expert at providing once-considered unsellable services like consulting, systems design, project management, business process analysis, information architecture, governance and so much more.
I'm not sure we'll ever really see a repeat of such foresight. At this year's Inspire, Chief Partner Officer Nicole Dezen explained the "new" Microsoft AI Cloud Partner Program with the same glowing terms with which the earlier Microsoft Partner Network, the Microsoft Channel Partner Program and other iterations were introduced: "The next generation of the MCPP, one designed to put partners in position to benefit from the changing and increasingly complex demands of modern customers."
Then came the patriotic ultimatum, a clear echo of the past: "Partners who lean into this new economic opportunity are creating value for their customers, for their own company, and for the greater economy of their community or country."
A dozen years ago, Microsoft was talking about the cloud. Now, they're talking about AI. If he were still at Microsoft, Steve Ballmer would call this the latest "Big Bet."
Save the Mile-High Platitudes -- Where's the Beef?
Perhaps I'm suffering from six decades of listening to all this fluff, but I was looking for the guidance for partners to find where they fit in the new AI "opportunity." It may have been out there, but I don't think it made the main stage at Inspire.
When partners lost the income opportunity from selling servers, they wanted to know how they could replace all that lost revenue by selling cloud services. Sometime around 2006, now-departing Corporate Vice President of Business Applications Vahe Torossian explained to partners that if they didn't embrace the cloud, within four years they'd become irrelevant. Still, the only guidance we seemed to get at the time was that we'd have to sell twice as much to make similar money. (That fell flat, no surprise.)
Now we're all running around like Chicken Little saying, "The sky is falling," worried about whether AI will take away everyone's jobs. Very few partners have the experience, skills and maturity required to determine for themselves how they can best take advantage of the AI "opportunity." The overwhelming majority of partners are struggling to figure that out.
Those of you who remember the Microsoft Professional Certification program may also remember my skepticism at that time. Then I found out that the training was not professional, and didn't lead to any formal certification. I was dismayed, not shocked. The approach to the AI "opportunity" so far seems similar.
Potential Beef
If you possess significant levels of sophistication in high-level development, you're probably already at work on your own applications that integrate AI technology. Bravo. Otherwise, you're back where you were when server sales went away. If you don't do app dev, what do you do next?
The answer will sound familiar, but the reality of AI technology is that the real opportunity for most partners lies in application. AI and machine learning are being incorporated into everything from IT support to retail to transportation, manufacturing and much more. The available applications exist as tools meant to support the activities of human users. They require a veritable slew of additional fee-based services that you can provide, either yourself or through partners. These include user training and support, strategic consulting and planning, provisioning, monitoring, management, regular client meetings to discuss planned improvements, and much more -- limited only by your innovative imagination.
Perhaps the best news is that the providers of these AI/ML-based applications need deployment partners. They are looking for partners who can effectively present their solutions to potential customers, then influence and close project deals. Then they get the opportunity to perform as many of the deployment tasks as possible to earn substantial additional revenue, both one-time and recurring.
Microsoft Beef
I am totally confident that our partners at Microsoft will continue to bring out new AI/ML-based offerings for us to market to our customers. I'm also confident that these products will be excellent by their 3.0 or 4.0 versions. But for right now, here's what partners need to think about and start planning for.
The most direct path to AI/ML success is in the configuration, design and deployment of reliable software platforms and products that incorporate AI technologies. The extra bonus is that the software developer will be there to train, support and guide you. As always, you need to interview them, evaluate their program, research their success rate and reputation, and decide if they're the kind of company you feel comfortable partnering with.
As always, watch out for brash, new startups with no ballast or track record. You may find one diamond that makes all the digging worth it, but better to stick with the reliable partners you've always been comfortable with. They'll be measuring you for your ability to influence and bring in projects that pull through plenty of their licensing. They'll be recognizing that by helping you grow your company in all the right directions.
The Evolution Continues
The predecessor to this column was called "The Changing Channel." At a given point around 2017, we decided that the channel had changed; where there were once resellers, there stood MSPs, then CSPs. We launched "The Evolving MSP" to track the more gradual growth of those who made the transition in earnest.
There's no question that AI and ML are incredible fertilizers for the seeds that service providers have planted in their businesses. The trick is to not try to overshoot your own capabilities: Apply the technology for fun and profit.
Posted by Howard M. Cohen on August 01, 20230 comments
There came a time when Microsoft and other channel partners realized their reseller business was going away. Cloud had burst onto the scene to intense, though mixed, reception. Resellers had serious concerns about security, privacy and reliability of cloud services, and they spared no effort making sure their customers were aware of this. After all, cloud replaced so much of what they were currently doing for those customers. It didn't really matter whether their concerns were well-founded or not, and many simply didn't make any effort to see for themselves.
Then their vendor-partners, foremost among them Microsoft, set about proving to customers that cloud was indeed the nirvana they were saying it was: very secure, very resilient, fully redundant and very reliable. Were you to ask senior executives at Microsoft at the time, they'd say that proving their cloud services to be trustworthy was an existential demand. And they warned partners that failure to embrace these cloud services would soon render them obsolete and irrelevant.
So Where Do We Go from Here?
Many Microsoft partners had long ago pinned their futures on reselling Microsoft and related products -- servers, storage, power conditioning, routers, switches and so much more. Now, suddenly, that list of salable products had been chopped to ribbons. No more servers, no more storage, fewer routers and switches.
Partners scrambled, seeking a way to shift their businesses to a model that would continue to grow into the future. Some embraced cloud mightily and began learning how to combine cloud services to build bigger, more profitable bundles for their clients. Some insisted that their traditional reseller business would serve them well into the future. Some realized the import of something then-Microsoft-channel-chief Phil Sorgen said to me back in 2011 when talking about how he saw cloud impacting partners: "Microsoft really has only one job. That is to provide an excellent platform that partners can run their solutions on."
This presumed that the partners of that time actually had solutions. Bill Patterson, then Microsoft Dynamics CRM product manager, observed that when most partners referred to themselves as "solution providers," what they meant by the word "solution" was simply more infrastructure: Add more and more infrastructure to solve problems. Patterson went on to suggest that we would witness an "evolution of solution" with customers demanding far more business-relevant solutions.
Both Sorgen and Patterson were, of course, completely right. Microsoft partners who heeded these words from senior Microsoft executives began to plan how they would go about creating or otherwise obtaining solutions that would be business-relevant and would run well on Azure, or in conjunction with then-Office-365. Most frequently, the question arose, "How are we going to get into appdev?"
The Path to the Evolution of Solution
Over a decade later, many resellers have transformed themselves into managed service providers (MSP) or managed security service providers (MSSP) and have shifted their focus from product sales to service engagements. Some have made deep investments in training and qualified experts, while others have merely invested in having "MSP" crash-imprinted on their business cards. The former are flourishing, while the latter only serve to make it harder for everyone by repeatedly failing customers and giving the MSP role itself a bad name.
During the same period, talented developers realized that more people felt they should have more control over the software that runs their companies but couldn't imagine themselves learning how to code. They ended up in the same boat as the former resellers wanting to create applications but not wanting to learn how to code. These talented developers decided to apply the models that were successful in OS user interface design to coding of applications. They developed platforms that enabled any business user who was familiar with how processes worked in their company to convert that knowledge into applications that would automate those processes. The interfaces for these were point-and-click icons that could be dragged-and-dropped into the proper sequence to perform most any typical business function. By moving these icons into place, anyone could fashion a working application without writing a drop of code.
In just the past few years, these platforms have been christened with a name that was most recently validated by the assignment of its own acronym by Gartner: LCAP, which stands for "low-code/no-code application platforms." Low-code refers to scenarios in which the non-programmer or citizen developer would create an application that demonstrated the involved workflow, which they then provide to a professional developer who would add code to complete the application. No-code is just what it says it is: You build it, then you run it. No code at all; just icons dragged-and-dropped into place.
At the end of last year, Gartner validated everything by providing a Magic Quadrant for these platforms The evolution of solution had begun.
Microsoft Leads the Way
While Microsoft was neither farthest to the right for completeness of vision (the horizontal axis of the Gartner Magic Quadrants) nor highest up for their ability to execute (the vertical axis), it was high up and to the right in the "Leaders" quadrant. Some Microsoft partners were surprised to see it there and puzzled as to how it enabled LCAP application development, and with which Microsoft products.
They soon found out the answer was the Power Platform, which was designed as a low-code platform enabling anyone to build custom applications and automate workflows. Speaking in native Microsoft, the goal was to accelerate digital innovation and transformation to help everyone do more. Consistent with its larger strategy, Microsoft launched the ISV Connect program which would help ISV partners develop low-code/no-code solutions and publish them on the Microsoft Marketplace.
Microsoft's vision for the Power Platform is "to empower businesses to do more with less by making it easier than ever to securely scale low-code, increase organizational collaboration for accelerated innovation, and infuse AI and automation into all of your business processes."
Occupying 'The Middle Ground'
As with any new technology, the arrival of LCAPs delivers excellent opportunities to Microsoft partners to seize the middle ground, offering to build applications for their customers using Power Platform. The idea is to build your own engagement model to first assess the current state of the customer's IT environment, then apply your LCAP to develop and deliver relevant and impactful solutions with no sign of infrastructure in them. Instead, they're totally business-relevant applications provided by partners.
At any given time in the history of personal computing, there has been little that partners do that customers could not ultimately do themselves. Customers could, if they wished to, install and implement servers, storage, routers, switches and other infrastructure components -- but they preferred to have partners do it for a fee. Provisioning cloud services, security, high-availability and much more were all possible for an end-user to accomplish, but seldom attempted. Users value the services of partners and are more than happy to engage them.
The takeaway here is if you're looking for ways to expand your business to recover the lost reseller ground and then some, explore LCAPs. There are hundreds upon hundreds of them. Master any of them and create applications for your customers without ever learning to produce even one line of code. The catalyst for the dawning of the age of the evolution of solution is LCAPs, and they are here.
Posted by Howard M. Cohen on June 26, 20230 comments
One thing you can be certain that every MSP wants to do is to grow their practice. There are really only two ways to go about that: One is to go out and create new customers, and the other is to sell more to existing customers. That's it.
You're probably thinking about the countless times you've heard, "It's five times easier to sell more to an existing customer than it is to create a new one." That's true, but have you ever thought about why? You already know your existing customer, and they know you. They trust you and they respect your opinion so that they'll consider anything you suggest. This cuts the entire front end of the sales cycle, the part that typically takes the longest. You've already pursued the account, made them aware of you, encouraged them to consider meeting you, penetrated the account, qualified them and proven your value. Sales cycle slashed!
What Else Can You Sell to Them?
Portfolio expansion needs to be a constant mission. You don't have to create a new service to generate great profits selling it.
The first "MSP" I worked with was Pivot Technologies in 1997. I was EVP at MTM Technologies (originally Micros-to-Mainframes) and we had acquired Pivot to expand our offerings. The term "managed service provider" hadn't been coined yet, so ours was a "network monitoring and management service." Our service connected to a customer's network and monitored the Simple Network Management Protocol (SNMP) management information base (MIB) in every device on the customer's network that had one. When anything went beyond threshold or otherwise outside of acceptable performance parameters, we saw it. We then assessed the anomaly, determined a course of action and reached out to the assigned resources to resolve it.
Truth be told, very seldom did a MIB indicate a problem. The bulk of our alerts came from either carrier outages or power outages. Our greatest skill was in threatening notification of the consumer affairs authorities. We were totally reactive.
Most of today's MSPs are in the midst of a journey across a continuum that began with "reseller" and ends with a complete transition to service provider. As they launch into this journey, they still have product sales to lean on, but the return on those sales keeps diminishing. The most successful MSPs have worked hard to reduce dependence on top-line lifting product sales. Some have eliminated product sales from their portfolio altogether, preferring to partner with a catalog house or other reseller to furnish products to their customers. They've realized that the slim margins available from product sales evaporate into logistics for moving those products and credit extended to customers during the acquisition cycle. They've decided to let those be someone else's problem.
Reactive monitoring and management services have become the base requirement for MSPs. What was our whole business at the end of last century is now the bar to entry. Many MSPs who began there soon found themselves uncompetitive. They needed to do more.
The most successful MSPs looked hard at their customers to figure out what more they could do for them, then sat down with their customers and directly asked them. What they learned is that the number of things customers need from them rises as the customer size gets smaller. The largest companies need them to extend and complement their own IT departments, providing additional skills during peak periods, and many of them have created great success by doing just that.
Midmarket and smaller companies need far more specific assistance, beginning with the administration of their IT estates. On any given day, a typical IT environment has many needs for adds, moves and changes. Users need to be onboarded and offboarded. Data sets need to be migrated. Security needs penetration testing or adjustments. These customers simply don't have the skills on-staff to perform these kinds of activities. They need someone knowledgeable to do that for them. And that person needs a backup. And the company often has no idea how to hire those people, nor do they have budget for more FTEs.
License management, optimization, backup assurance, failover testing -- the list goes on. The only limit to the services you can add to your portfolio is your own imagination and spirit of innovation.
There Be Tools Out There!
As there are many resellers who have been slow to transition to service providers, there are vendors that have been slow to realize the core change their partners have undergone. I first experienced this in the early part of this century when vendor representatives kept visiting me and extolling the enormous margins I could achieve selling their products. I would calmly explain to them that they were describing a fantasy, that there was no longer any substantial margin from product sales because our channel colleagues had discounted it all but completely out of existence. Logistics and credit swallowed the rest.
It's likely that many IT product vendors are still scratching their heads trying to figure out how to motivate their channel. Some are probably planning a return to direct sales. Others figured out the answer.
In the early days of the channel, there was something we called a "consultant's license." It gave the holder access to a software license not to sell to their customer, but to use on behalf of their customer. You needed to have a separate consultant's license for each customer you were using the software for. Having that license, you could charge your customer both for the availability of that software, and also for anything you did with that software. Software became a tool we could use to create new services to sell to our customers.
Citrix Systems saw this as a survival strategy at one point. They had just sold their core technology to Microsoft, which became the Terminal Server. Following the advice of some of their more astute partners, they became a forge for tools to manage virtual desktop infrastructure systems. They have remained among the foremost toolsmiths in the IT industry for several decades now.
Today, "toolsmith" has become the ball game. Smart vendors have re-imagined how they sell their products to enable channel partners to create and provide new services to their customers. The earliest of these, since the emergence of the cloud, has been software tools to facilitate migration from on-premises systems to cloud. Some have automated key processes, like running scripts, to make it easy for their partners to deliver new services. Others facilitate optimization of communications and other services.
Former BitTitan CEO Geeman Yip was another early IT toolsmith. "Especially with service providers, where margins are shrinking and it's getting more complex with fewer resources with which to do more," explained Yip, "one place you can lower costs is by eliminating all the mundane tasks. The things that are clearly documented standard operating procedures that don't require anyone to think about. We should be automating all that because that's going to allow us to be more efficient and more effective and more competitive."
BitTitan's MigrationWiz was one of the first great examples of how MSPs and other ITSPs can innovate new services based on new tools becoming available to them. As the channel moves further away from being a channel for the sale of products and toward being a community of professional service providers, those who apply their imagination to the innovation of new services and new offerings for existing customers are the ones who will grow their businesses most rapidly.
Posted by Howard M. Cohen on May 22, 20230 comments
P.E.B.K.A.C. If you're not familiar with this acronym, it refers to the part of the network that network engineers say is the hardest for them to manage: the user. Also known as "The Part Existing Between the Keyboard And the Chair." The user is considered hardest to manage because they're human. Unlike digital devices, they don't respond the same way to the same instruction given repeatedly. They have good and bad moods. They become distracted. They make mistakes. They are, simply, unpredictable. That's tough to manage.
As I look around at what my journalist colleagues and I are writing and presenting about current IT events, I find the pages filled with stories of artificial intelligence (AI) and its progeny, Microsoft Bing/Sydney, Google Bard, Copilot and many others. A plethora of platforms are incorporating virtual assistants to take notes for you, summarize meetings for you, call out action items to assign and more. As they do, more and more users are shaking in their boots, waiting for those AI assistants to take over for them, eliminating the need for them, replacing them with a consistent, reliable, manageable alternative. It seems everyone is starting to forget who is the programmer and who is the program.
Bringing relief to these users requires training. Ask yourself, who do you partner with today to provide end-user training? What are they suggesting your customers need? Is it enough? From the earliest days of "solution selling," we acknowledged that it was as important to identify and fill the need for training as it was to identify and fill the business operational needs. Without trained users, technology sits idle and returns nothing on the customer's investments. That hasn't changed.
Then, of course, there's Skynet. Every Terminator movie reminds us that the day will come when the machines take over. Programmed to protect the planet, they realize that the greatest threat to its continued existence is us, people. So, they commence the process of eliminating us. Lest you think the producers of this successful movie franchise are the only ones who hold serious existential concerns, I pulled back the following three quotes from an article I wrote in 2017. Important to note who is being quoted:
"I am in the camp that is concerned about super intelligence. First the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well. A few decades after that, though, the intelligence is strong enough to be a concern. I agree with Elon Musk and some others on this and don't understand why some people are not concerned." --Bill Gates
"I hope we're not just the biological boot loader for digital superintelligence. Unfortunately, that is increasingly probable. AI is our biggest existential threat." --Elon Musk
"The development of full artificial intelligence could spell the end of the human race. It would take off on its own, and re-design itself at an ever-increasing rate. Humans, who are limited by slow biological evolution, couldn't compete, and would be superseded." --The late Dr. Stephen Hawking
Not exactly a trio of intellectual slouches. And these opinions were issued six years ago now. If these undeniable geniuses (at least one also a suspected madman) express such concerns, we are somewhat forced to share them.
What Does This All Mean to MSPs?
Given that this column is called "The Evolving MSP" we need to examine all the potential paths our evolution might take, right?
We're also talking a lot lately about AIOps, the application of AI to help manage and support IT operations. Think of a network traffic monitor scrolling madly by on the display. To identify anomalies, you need to identify unusual patterns in the data, and do it in real time -- not possible for humans, but easy for digital devices, especially when they're equipped with machine learning (ML) and AI. So, we train the AI to recognize hazardous patterns and set it loose to find them. As it does, it learns more and more about the traffic and how to analyze it. In other words, it is constantly getting better at what it does.
I've never met any IT professional who will admit to enjoying watching network traffic scroll by on the display, nor any who will claim to be able to recognize anything going on in that data. So having AI and ML take this on for you solves many problems and frees you to focus higher up the challenge tree.
The Next Word You Must Focus On
Go to one the many IT glossaries and look up "managed service provider." Most of the definitions will sound reactive: MSPs monitor networks looking to identify problems and resolve them. It doesn't seem like they're expected to provide any ounce of prevention to prevent pounds of cure. But from my perspective, the next step in our evolution as MSPs -- or any kind of IT service provider -- is to become proactive.
Many of you are probably protesting that you're already proactive. Bravo to you! And still others are saying, "Hey, I left proactive behind long ago to be predictive." Sounds great!
I've often compared our evolution to that of the medical profession: We start out as generalists and eventually become specialists. Applying that analogy here, I'm called to think about sports medicine. There are many specialists who serve elite athletes by helping them recover from injuries promptly so they can return to competition. If you think about it, that's where our elite MSPs are today -- see the problem, fix the problem. Then there are specialists who focus on helping athletes maximize their abilities. They examine the patient to see where they can help make significant improvements, increase lung capacity, build more muscles precisely where they're needed, sculpt body musculature.
Given AIOps' ability to take care of the "grunt" work of monitoring and resolving incidents, the most forward-thinking MSPs start looking toward becoming more coach-like. They come into the datacenter or the MSP practice to identify ways to improve performance, increase revenue, drive better customer experiences and higher customer satisfaction achievements. They make customers' IT work better, faster and at lower cost.
Think about your customer's response were you to repeat what I just said to them. Implement AIOps so you can take your practice proactive, predictive and more profitable.
Posted by Howard M. Cohen on April 27, 20230 comments
Smart MSPs no longer focus on promoting the sale of any specific product. In fact, some have abandoned product sales altogether, preferring to partner with someone to procure and provide products when needed. What they really need to do, however, is change the way they look at new product introductions.
When we only think about a given product as a good that might earn a marginal profit if we sold it, we're quickly reminded just how slim that margin really is. It's just not worth the effort anymore. Even if we do eke out a small profit, that profit is eaten up by credit we extend to our customer and the operations it takes to order, receive and process each product.
But Some Products Bring Opportunities
Equip yourself with a quick filter for new product announcements. Start by reading the first paragraph or so of the announcement and ask yourself which of your services you could wrap around this product. Can you:
- Consult on it?
- Design systems around it?
- Configure it?
- Prepare it?
- Test it?
- Install it?
- Deploy it?
- Network it?
- Train users and administrators on it?
- Provide ongoing support for it?
The more "yes" answers you come up with, the more opportunities this product offers you.
The simple fact is that most services MSPs offer to their customers involve or are attached to some product or products. The most fundamental service MSPs offer is monitoring. What do we monitor? Products -- servers, storage, routers, switches, modems and more. Similarly, we manage all those devices and more. Add software applications to that list, and that adds a substantial lift to our revenue, too. The bottom line is that MSPs do have an interest in products -- a deep interest.
Depending on whose numbers you're looking at, there are tens of thousands or perhaps even hundreds of thousands of Microsoft partners who know they're making less and less money selling Microsoft's products, including cloud services. But they remain partners. Why? Because they make so much money consulting, deploying and supporting those products and services.
The Correct Response to New Product Announcements
Once you've identified a new product that requires your services, the next step is to reach out to the vendor of that product. It may be a hardware manufacturer, a software developer or a services provider. Find your regional representative from that vendor. If all else fails, call the company's main number and find someone who can provide you with the name and contact details for that person.
Reach out to that representative to talk. Going into the conversation, keep in mind that channel representatives' lives have become much more difficult since the great rush from reseller to MSP. They have fewer active partners than before. Fewer of the remaining resellers are moving away from that model. As that happens, it becomes harder for channel managers to achieve their sales quotas. For them, a channel partner calling them is a gift, manna from heaven. They will greet you with open arms.
Whatever they may want to talk with you about, start by telling them about the services you feel you could wrap around their products. Ask them if you're missing anything. Are there other services you could be profiting from when you move their products for them? What do they think of your ideas? Can they punch any holes in them and help you improve upon them?
Press them to inform you about the value their channel program can provide to you. Market development funds sound great, but there are a few caveats you will want to insist upon:
- They cannot be based on sales volume. You're not planning to move any product in volume; you're planning to propose services and projects that include the product.
- They'll need to be willing to work with you on collateral and marketing activities. If they're not willing to promote your services along with their products, that's a deal killer. Ideally, the marketing should be about the value of your services and why you include their product in the solution.
- You'll want better access to their technical resources when necessary. That makes you more valuable to your customers. You used to get that access as a result of your sales volume; now you need it because you are an active proponent of using their products.
It's likely that any channel manager will approach you the same way they always have. For them, you can generate sales. They'll want you to know how much margin you can earn. You know better.
This Is Not a New Concept
For the vendor, this is the classic "influencer" model (but not the kind where someone on social media talks about how cool something is).
Probably the first vendor to recognize and reward partners for influencing sales was Citrix more than 30 years ago. Even if the customer bought the licenses elsewhere, Citrix would pay a healthy percentage of the cost to the partner who could prove they created the sales by influencing the customer to engage in a project. Influencer partners ended up having very low volume of sales. But, beyond payment, Citrix recognized these partners as full partners. They had access to all of the resources Citrix had.
This is the partnership you want to seek, and it starts with that first conversation. No, you're not going to sell volume, but you're going to include their product in your proposals and thereby pull through healthy sales. You'll be pleasantly surprised how many channel managers have already recognized how the world has changed.
Posted by Howard M. Cohen on April 17, 20230 comments
Let's read some tea leaves together, shall we? We're seeing sizable force reductions at many of our favorite partners' companies. We didn't really expect them, but still we don't really find ourselves surprised.
We also see very talented people in our channel suddenly seeking new opportunities. Some are high-ranking executives, but many are simply superb engineers and technologists. And some of those executives are superstar heroes of the channel. We wonder why anyone would ever let them leave.
This past summer we saw Microsoft split the channel chief role into three people. They say two, but few of us missed the fact that three people got new jobs. Many may have missed that the very top role in partner management went to someone, Nicole Dezen, who started out in device sales.
What To Watch Out For
If you're a very talented specialist at a large channel company, here are some other tea leaves worth reading. How much does your company still depend on product sales to achieve their profit goals? And don't confuse profit margin with profit; they're not the same thing. Margin refers to how much you get to keep out of every dollar you earn as a percentage of that dollar. If you achieve a whopping 50 percent margin on $10 in sales, you've still only made $5.
As they got to keep less and less of each dollar -- as their margins fell -- some companies made the shift to become IT service providers. They dramatically reduced their dependence on product sales and instead drove profits up by finding more and more engagements for their professional staff. Others focused their efforts in increasing the volume of their sales, reasoning, "If margins are cut in half, we have to double our sales to stay in the same place." Uh-huh.
I've written for both kinds of partners and it is incredibly easy for me to tell which one I'm dealing with. Those who believe product and licensing sales are their path to glory constantly had me write about how wonderful their partners' products were. Even when writing customer success stories, emphasis had to be on the vendor or vendors. In only some cases was that because the vendor was paying for the marketing in market development funds (MDFs) or other funds. For most of them, it was my observation that they really didn't understand their own value proposition, or how to promote it.
What the Tea Leaves Are Telling Us
Read your own company's marketing materials. If they're about what you do, you're most likely in a very, very good place. If, on the other hand, they're all about the manufacturers or developers of the products you integrate, your company is very likely on the track that ends up going over the cliff.
Here's why I say that. When our industry was very new, back in 1981, IBM first called us their "reseller channel." The "channel" went from manufacturer to distributor to reseller to customer. Channel partners made every effort to push products to their customers from manufacturers they had decided to partner with. Manufacturers pitched in to help, rewarding sales with MDFs in an incredibly backward strategy that offered funds to help promote sales, but only to those who had already sold. Potential was ignored.
Almost immediately, some "channel partners" saw discounting as their best (maybe only) available competitive strategy. Smarter partners who had invested heavily in servicing these products let them have those sales to hasten driving themselves out of the business. That worked extraordinarily well. When margins had cratered as completely as they possibly could, many "resellers" transformed themselves into "managed service providers" (MSP), an unfortunate label we'll deal with in another post. Some of those former "resellers" truly pursued a transformation. They hired people with new and better skills. They trained their existing people to provide more sophisticated services. They truly became providers of services.
The others had "MSP" printed on their business cards. This second group continues to make life difficult for those who took the change seriously. All too many customers fear "MSPs" because they've been burned by incompetence and unfulfilled promises. This second group also continues to believe that product sales will deliver sufficient profits to keep the lights on. This is why I say to read your own marketing and see where your company's emphasis really is.
Where Do We Go from Here?
When a specialist from a truly service-focused firm recommends a particular server, storage, router, switch or other product, they're no longer looking to "sell" those products to you. They're including them as part of their project recommendation.
In fact, a large and growing number of MSPs no longer sell products at all. Instead, they partner with another company to procure those products for their customers. They know that any profit margin that might be available on any given product sale will be eaten when they extend credit to the customer, or they run operations to order, receive, prepare and ship those products. It's a waste of their time with little or no return. At worst, it's a cost center to them.
If you're working for a company that promotes the products of their "partners," it's a good time to start looking at the marketing put out by other service providers.
There was a time when we had to drive volume sales to earn real partnership. Those days are gone. Today, smart partners create relationships with certain vendors around what they can do with their products. Vendors, in turn, look for those smart partners who drive excellent, and often large, projects that include their products. They look to partners to pull their products through in projects, rather than expect them to push them. Some even approach superior service providers with suggestions for new services they can wrap around their products. That speaks far louder to them than "margin" falsehoods.
Ask yourself why so many service providers no longer sell products at all. Do the math they did. See how much you actually lose when trying to resell products yourself.
You Cannot Successfully Do Both
There are still several companies making money selling products, but they have long ago abandoned trying to also provide the services that go along with them. They focus intently upon making product sales profitable for themselves by purposely not including "resellers" who would need a portion of the meager margins. They also continue to negotiate the back-end deals that have always enabled large distributors and catalog houses to keep their doors open.
Let them have that business. In fact, help them have that business. Help your customers buy from them. They may see fit to start referring services business to you in return. At the very least, they'll prevent you from reducing your own profits.
We started this column, The Evolving MSP, because we knew our readers couldn't stay still in one place for too long. You know you need to evolve. You need to focus. You need to specialize. Ultimately, "MSP" is pretty meaningless. You manage services, but what services do you manage?
As you accelerate your growth, we see you specializing in technologies you're great with. You're becoming known as the leader in your area of expertise. Much as medical doctors go from "primary care physician" to any of a large number of specialties, you're specializing, too. You will soon find yourself referring business to other partners with other specialties, and forming relationships with the generalist partners whose customers will ultimately need you.
You'll become cloud service providers, data service providers, artificial intelligence service providers, Internet of Things service providers, and many more. This is where we go from here. This is the way that's not only clear, but very exciting.
And we'll continue to suggest more new ways for you to grow here in The Evolving MSP. Perhaps you want to share some ideas with us for great growth directions that you'd love to see your companies move in. If they're RCP readers to begin with, there's a good chance they'll see your suggestions.
Posted by Howard M. Cohen on February 21, 20230 comments
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, 20230 comments
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.
Products
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.
Procurement
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.
Sales
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, 20220 comments
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.
"I'm making plenty of money selling products." Some of you are probably thinking this right now. You have no problem selling products at high margin. If so, I congratulate you and encourage you to keep doing so...but that doesn't really change what I want to talk about today.
Back in the Old Days
There once was a time when all "resellers" could make great margin selling hardware and software. Personally, I saw that end around 1985. Others say it happened later.
At that time, vendors visited our offices regularly to show us new products in hopes we'd decide to actively promote them, add them to our line card and sell significant volume of them. In some cases, we did. Everyone made out well.
The Race to the Bottom
Eventually, some resellers decided to compete solely on price and discounted products down to basis points. Everybody lost; nobody made much money. But vendors kept coming in and a big part of their case for selling their products was the big margins we could realize on them.
That didn't work out too well. The discounters had knocked those whopping margins out of existence. Eventually we stopped the vendor when they started talking margin. Soon, they stopped even trying.
The Great Shift
Over an oddly long period of time beginning in the mid-1990s and continuing to this day, resellers stopped identifying themselves as resellers. An overwhelming majority of them adopted the title managed service provider (MSP) and shifting their focus from selling products to selling their own services.
Many resellers learned early to foster great relationships with their vendor partners. These came in handy when they had a thorny technical problem, or needed a pricing variation or other accommodation for a customer. In part, that relationship was easy to build thanks to the volume of product the partner was selling for the vendor.
As MSPs moved away from selling products, their leverage with the vendors faded. But they still wanted a good relationship with many vendors to enhance their access to technical resources and cooperative marketing opportunities.
Many vendors remembered the "Influencer" programs of old where partners were compensated directly for bringing deals even though they didn't sell the licenses themselves. They were paid simply for bringing the project and closing it. The most insightful among them realized that influence leverage was still available to them.
Clearly, MSPs benefited from having great vendor relationships, and so did the vendors. Sadly, some vendors still show up talking about margins.
Smart MSPs Know the Value of a Product -- to their Business
What is the value of a product to an MSP? It's clearly no longer a margin on the sale of it.
To find the value of any given product, start by thinking about how MSPs make money: They make the greatest profit selling their own services, if they manage them effectively. Consultation, provisioning, deployment, configuration, monitoring, management, capacity management and many more.
They can also make money on services provided by others, especially when they bundle them in with their own and others.
How Do MSPs Increase Their Revenue and Profits?
It's said that there are only two ways to increase revenue: Either sell more to your existing customers, or create new customers. And many will tell you its five times easier to sell more to existing customers than to create new ones.
The sales cycle for new customer acquisition is much longer, starting with finding candidates, then connecting with them, learning more about them, proposing solutions to the and winning their trust. With existing customers you cut all that out and start at the next proposed solution.
Add cost reduction to the formula and you're increasing profits, too.
What Do We Sell Next to Our Existing Customers?
Here's where vendors can come in really handy. (Vendors, if you're reading this, here's the shortcut to getting MSPs enthusiastic about selling your products.)
When a vendor visits, simply ask them what services you can wrap around their products. Think about it: You make money selling your services. If you want the fastest path to increased sales to existing customers, what you need most are new services to add to your portfolio of offerings. If you can wrap your services around an innovative product, you've just found exactly what you need -- more new services.
You can even go proactive with this. Ask your customers what they need that you aren't yet providing. Their answers will guide you to seek the right products to add to your services in order to fulfill their needs.
Advice to MSPs and Vendors
With all due respect, too many vendor representatives are still sent out with insufficient training. They learn their products' speeds and feeds, maybe some strategic advantages, and that's about it. Rare is the vendor who thinks through what MSPs need most for their customers.
As a result, when you ask what services can be wrapped around a given product, the visiting rep may not know, or have any ideas or inspirations. That's what vendors have product managers for. Ask that rep to get you on a call with their product managers to see if they can answer your question.
Vendors, my strongest recommendation is that you take time to prepare for this question, and answer it for your preferred MSPs even if they don't ask. The more services you enable them to provide to their customers, the more love you will earn from them -- and the more sales.
Posted by Howard M. Cohen on October 14, 20220 comments
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.
In July 2009, Microsoft replaced the MSPP with the MPN, the Microsoft Partner Network, proudly announcing it was "not something you join, but something you're part of." It didn't take long for partners to find the pipe bomb hidden in the bunting. It was commonly referred to as "the exclusivity rule." Qualifying for any of the Microsoft partner competencies always required that four people pass specific tests. Those same four people could take tests for all the Gold competencies and pass them, meaning the partner would qualify for all 30 of the then-existing competencies. At that time, I was working at a partner that had 17 employees and held all but one competency, making us the No. 1 partner in the Partner Finder of that era.
With MPN, the "exclusivity rule" meant that nobody could take more than one test for one competency. If you wanted another competency, you'd need four other people to take the tests. And four more, and four more, etc. At our shop, we would need at least 116 employees to retain our competencies.
Partners were aghast. Kind of like they are right now about the Partner Competency Score (PCS).
Here's the Question You Have To Ask Yourself
It strikes me that I could just reach into the archives and pull this next thought right out of articles from a decade ago. With the introduction of the MPN, partners said it was a scary time to be in the channel, that Microsoft was hurting its partners, that they weren't sure if they would stay in the program. There was talk of finding "viable alternatives." Back then, the question I suggested partners ask themselves is the same question you should be asking yourself now: What do you really get out of your Microsoft relationship?
Along with that question, I made the suggestion that partners consider treating Microsoft with the same attitude they were treating us: benign neglect.
Benign Neglect
My good friend Richard Losciale often reminded us that we needed to maintain a posture of being "patriotically adversarial" with Microsoft. We love Microsoft, but we need to keep Microsoft honest. We need to maintain a strong voice when it does something that might injure us. At one time, I agreed with him totally, but experience has confirmed my decade-old belief that the best way to treat Microsoft is with benign neglect.
The only way Microsoft can hurt partners is by reducing their return on the relationship. Every time Microsoft messes with partner-of-record percentages or other compensation programs, it reduces the amount of money partners can earn on transactions. So, stop doing transactions. Stop selling Microsoft subscriptions of any kind. Let somebody else sell them -- like, say, Microsoft itself. That's very likely what will happen anyway, ultimately.
What I'm suggesting is that you join the legions of "non-transacting" partners. When I interviewed Gavriella Schuster upon her exit as channel chief, she spoke proudly about how many non-transacting partners Microsoft was adding every month. Clearly, Microsoft is good with it. You should be, too!
What do you think customers think about Gold Partners? With MPN, that concept was supposed to be gone; you could have Gold or Silver competencies, but you could no longer be a Gold Partner. With the upcoming Microsoft Cloud Partner Program (MCPP), Microsoft is abolishing it again. How many customers actually accord value to that appellation? If you stop worrying about having that logo to stick on your collateral and are willing to let Microsoft keep the pittance you can make selling its subscriptions, you can be free to do as you please, let Microsoft do as it pleases, and continue to build a brilliant business. Just treat Microsoft and its demands with completely benign neglect and the war ends for you.
People Engage You for You, Not What You Sell
Even as I write this, I'm convinced I'm overstating the obvious. Your customers don't buy from you because you sell Microsoft, or HP, or Cisco or any other vendor's products. They engage you for your intelligence, your talent, your expertise and your experience. They respect your performance, not your line card.
Some of you may cry, "But what about the resources Microsoft provides?" Do you seriously believe you can't find those elsewhere? You can obtain all the training you want from excellent Learning Center partners. There are now businesses that have built themselves to provide you with the technical resources you may not yet have on your own team.
What I'm saying, ultimately, is that Microsoft doesn't build cars and your IT practice is not a car dealership. You don't need to align with Microsoft formally. Doctors don't align with Pfizer or other pharmaceuticals to be able to prescribe their medications when necessary.
If you don't like the new MCPP, refuse to join it. Become a non-transacting partner. Take a look at the partner programs finally emerging from Google, Amazon and others. More customers use Android than Windows. More customers run SAP than Dynamics. Microsoft is not the top dog in any segment of software other than perhaps Office, and it hasn't been for years. Use and propose Microsoft products to your customers, but let someone else sell the licenses and be the master of your own ship.
Posted by Howard M. Cohen on March 29, 20220 comments
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.
In this case, RCP 350 partner Workspot shared the story of one of its clients, Applied Software, and how they're strategizing for this distributed future.
About Workspot
Workspot took a good, hard look at everything customers didn't like about remote desktops and solved it. Customers liked virtual desktop infrastructure (VDI), but found managing and running VDI complex and cumbersome. They liked the idea of a company that delivered VDI services for them, but found that most of those companies were small and had inadequate cloud installations and spotty networks. Also, depending on where the client was and where the provider was, latency could be a serious factor when you want a desktop experience similar to local networking.
The Workspot Enterprise Desktop Cloud platform delivers complete cloud desktops to any device anywhere. It deploys quickly, scales almost effortlessly, is operated by experienced professionals with years in the business, and operates on Microsoft Azure, Amazon Web Services (AWS) and Google Cloud Platform (GCP). Super-reliable, infinitely scalable cloud resources running on the most durable, resilient, high-speed networks in the world. Each user's cloud desktop is delivered from the provider's datacenter that's physically nearest them to minimize latency.
Workspot has a deep well of VDI legacy; the chairman of its board of directors is former Citrix CEO Mark Templeton.
Applied Software and Its Challenge
Founded in 1982, Applied Software Technology Inc. (ASTI) has grown to become one of the largest architecture, engineering, construction, fabrication and manufacturing system integrators in North America, providing a comprehensive array of solutions, services and consulting with a singular focus on helping clients achieve higher performance. Services include software, training, support, consulting and custom development.
Customers commonly use GPU-based systems to run ASTI's very high-end engineering applications. This works very well when everyone is collaborating in the office on their high-powered workstations. The outbreak of the COVID-19 pandemic made that impossible. ASTI needed to find a way to enable customers equipped with their own laptops to continue to use the software, which had much higher demands.
ASTI's chosen solution was Workspot. Furnishing customers with Workspot subscriptions, ASTI located each user's workloads and cloud PC desktop in the Azure datacenter nearest them. It found it had all the control it needed over information governance, load balancing, performance monitoring and, ultimately, customer satisfaction. All the benefits of VDI without the headaches, and with the added flexibility to enable GPU-level performance in regular PCs.
Even the variations in configuration of customer devices didn't daunt ASTI. A user needed a specific NVIDIA driver for their display? No problem. Management and rationalization of storage? Made easy. Even the heaviest workload demands, including enormous graphic design files, were easily handled.
Planning for the Future
Foreseeing a coming staff shortage in their vertical industries, ASTI is already planning to help customers compensate for their lack of people power with more remote compute power using innovative techniques they've been building on the Workspot platform.
ASTI has given its customers the best of all possible worlds. Totally reliable infrastructure, totally resilient, full-availability, high-speed global network, and totally virtual control of the entire compute infrastructure. It plans to partner with Workspot to deliver its software for a long time to come.
Posted by Howard M. Cohen on February 03, 20220 comments