MSP’s and VAR’s,,,, It’s All About The Cloud!

In our previous article, written by my colleague Andrew Banning, It’s The Cloud Stupid! we explored the business threats facing MSP’s and VAR’s especially in regard to ever increasing customer demand now for cloud services and how this is leaving the business models of many established MSP’s and VAR’s under threat.

The major concern highlighted in the article was the almost inevitable decision by one of the vendors, (almost certainly Amazon first with AWS), to go direct to VARs/MSPs customers and bypass the channel and I agree, this is very likely to happen.

When it does it will pose many questions, not only for the other cloud vendors but also the owners of MSP’s and VAR’s, whether they are already offering cloud services or not; but the audience for this article is the owner of MSP’s and VAR’s so let’s explore the threats and challenges currently faced by the owners of these businesses.

Now in terms of the challenges to come and the increasing customer demand for cloud based services, within the channel there are really only 2 types of business; those offering cloud based services and products and those who don’t. Now although those not currently offering cloud based services are behind those who do, that does not mean that they do not share the same challenges.

So just how do the owners of MSP’s and VAR’s prepare for what looks like the inevitable, the vendor model of taking cloud products and services direct to their customers? Well firstly there will be the battle for market share and the effective new business development campaigns required to take cloud products and services offerings out to targeted verticalised markets; but few will realise just what will be involved in building these successful campaigns, those that are going to be required in order to increase your customer base, but it will include all of the essential skills-sets and processes below:

• In the post GDPR world; the ability to build your target customer database which will also include the ability to find the contact details for the decision makers within your targeted verticalised market.
• Building a genuine and marketable USP for all your targeted vertical markets; one that will be perceived as adding value by your target customers.
• The ability to write and construct the content and direct marketing messages required to engage with your target audience, build trust and ultimately secure their business.
• Identifying the delivery platforms for your campaign messages and building the delivery schedule to ensure that your marketing messages get read by the target audience.
• Ensuring that you can analyse engagement with these marketing messages and follow up appropriately, in order to begin building and developing your relationship with your targeted customers.

And if all this wasn’t enough, for those not already transitioning their business to a cloud services provider, you have the building of the financial model required within your own business; remember, the cloud services model, although extremely lucrative does not pay in the same method as the traditional model of supplying and supporting hardware and on-site infrastructure business models.

Although there is much to do, the pace of change in our industry – and the need for adaptation of our business models accordingly, if we are to remain relevant and profitable - has always been a key challenge for IT services companies. And with the changes we’ve seen in recent years, with falling hardware margins, the advent of the public cloud, the opportunity for many VARs/MSPs to launch their own private cloud models and the ever-growing challenges and opportunities around cyber security, there has never been a time of more change in the industry.

But for those IT services companies embracing quickly the changes in demand from customers towards cloud products and services, there is the potential to secure a highly lucrative, sustainable “recurring revenue” business model and to also meet head on the business threats undoubtedly coming their way. The benefits of the monthly recurring revenue model are well documented and of course include enjoying a known and pretty much assured monthly income level which, (as you grow off the back of the new business development initiatives required to gain market share), lessens the constant pressure of finding new business every month.

And of course the strength of your renewable contracts database is fundamental to the valuation of your company moving forward – this will be paramount to any investor’s decision to part with their money, whether you’re looking to ultimately sell the business or for an investor to fund your next stage of growth.

However, in order to get here there will be much work to do, both in terms of building and delivering the sales, marketing and new business development campaigns required to build your customer base, and in terms of understanding the immediate financial challenges involved in transitioning over time to a cloud services provider.

Luckily though help is available to the owners of MSP’s and VAR’s wondering how to overcome these business challenges and secure the future of their business. During the last 3 years my professional colleagues and I have been working consultatively with the owners and senior directors of MSP’s and VAR’s, constructing the strategies and building the highly specialised and verticalised campaigns required, in order to take public, hybrid and private cloud solutions to target verticals in the SMB sector, including the financial services, law, accountancy, independent schools, pharmaceuticals and recruitment sectors.

We have existing, highly effective and proven sales, marketing and business development campaign modules ready for your business that have already been utilised to sell cloud based solutions. We have also consulted on and built business plans for transitioning your business to a cloud services provider.

My fellow directors and I have over 40 years combined experience in growing businesses and can deliver sales, operational, business development and marketing experience that is IT sector specific, straight to your door.

We know how to build these models, they are “Current” and continually evolving, we know how to target and speak to the decision makers in your target markets and most importantly, we know how to grow your business and make you money!

If this post has resonated with you and you would like to explore how we can help you achieve your growth aspirations, or indeed in the process of transitioning to a cloud services provider, then please do not hesitate to contact myself or my colleague Andrew Banning on 0118 947 1010, or email us at janeg@virtuosoconsultancy.co.uk or andrewb@virtuosoconsultancy.co.uk

For more information about our services please visit www.virtuosoconsultancy.co.uk

To read more posts covering all aspects of sales, marketing and business development for MSP’s and VAR’s, please visit our blog; https://it-business-growth-strategies.blogspot.co.uk/

It’s The Cloud Stupid!,,,,,,,,,,,,,,

I read with great interest a recent article in the trade press about the growth in cloud services and current levels of demand from customers and what struck me as interesting, as a sales and operations professional with relatively fresh eyes on the sector; (after all it has only been 3 and a half years since I was asked to construct and deliver the first sales, marketing and new business development campaign for an MSP’s taking cloud services to verticalisied markets), is the fact that the market seems to be unprepared for the demand from customers for cloud services, in fact everything around an easy cost per month disposable IT model.

This general lack of unpreparedness is not unusual, I have seen this situation before in other markets, (especially the real estate and automotive markets), but I caution, it can lead to a vacuum for a new business threat to fill, and I think there is a real danger that this is about to happen in the IT sector. Invariably, as has been the case in the automotive and real estate sectors, this void gets filled by a new competitor, perhaps initially from outside or on the fringes of the sector; the threat that no one sees coming. As the real estate and automotive sectors are learning, this new business, the company perceived as the customer’s friend will enjoy positive sentiment and high levels of obligation from customers, and once they control large proportions of customers, they have the ability to further change customer behaviour to their benefit.

Over the last 5 years companies like Carwow in the automotive sector and Purple Bricks in the real estate sector have tapped into a demand from customers to do business in a different way, and the effect has been devastating on the businesses deploying what was, up until then, the traditional trading model. I’m not going to spend any time delving into the aggressive third party business models, who have been able to attack established markets in this post, (they are a thesis in themselves), but the reason for mentioning them briefly, is because I see the same vulnerability in the channel at the moment, in terms of traditional, (but becoming outdated), business models, and it is MSP’s that are potentially most vulnerable.

And why do I say this? Well if customers are driving demand for cloud services and quite understandably turning their backs on the in-house hardware infrastructure model, which is now looking rather old fashioned, the role of the traditional MSP is beginning to look threatened and rather redundant.

This statement will no doubt ensure I receive some comments from owners of MSP’s, those I read quotes from who continually go on about the value they add, and this might have been true in the days of building and supporting complex on-site IT systems. But if customers are moving away from on-site IT networks, (which are beginning to look like the typewriter compared to the shiny new home PC equivalent, which is the cloud based network), the opportunity for the owner of an MSP to “Add Value” or shall we be honest and term it as “Build in Margin,” could be coming to an end.

Let me explain why; I have always looked at the perilous relationship that exists between vendors and the channel, (not so much for the vendors, but for the MSP’s), and if I’m honest I always wondered why vendors spent so much time building relationships with businesses they can’t control, in order to build their success, and I always thought that commercially this just did not make sense; why are vendors not selling this themselves?

Now, having worked extensively in the sector during the last 3 and half years I understand the requirement for this unhealthy relationship, and I say unhealthy because I sense that in the main, this is how some vendors view this relationship. Now to explain this statement, let’s pretend that I am a vendor and then think what a vendor goes through when launching a new product. Although this is going to be simplistic, it will go to the heart of the problem and my frustration as a vendor.

So, as a vendor we have a tremendous new product and in order to take it to market I have to invest vast sums of money and time convincing individual MSP partners to take on board this new product and take it out to their consumers, whilst not knowing the circumstances surrounding their business, their embedded relationships with other vendors, or their customers; as a business model this is mad but hey-ho, up until now I have had accept this status quo!

But the cloud changes this; why? Well unlike Dell, who in the past tried and failed to go direct to customers therefore bypassing the channel, we now have a wholly different and more financially powerful business to contend with, Amazon. Let’s take Amazon as an example, who already have about 40% of the cloud market; now if I was Jeff Bezos, (and I am not), I would be thinking like the disruptors who targeted other markets and coming to the conclusion that the secret to my success may just be about getting the message out to customers, customers who are already hungry to take up my services, many of whom already have via MSP’s building networks using my cloud services.

I would then think that this is potentially leaving my future success in the hands of third parties I do not know and now that we have a product that doesn’t need supporting in the way that traditional in-house hardware infrastructure needs supporting, why don’t I bring this whole operation in house.

After all, I have the best marketing platforms available to me, (my own), a trusted brand to die for and no one understands my product like I do; and more, having been emboldened by the recent £600 Million contract signed by Amazon Business, (albeit not for cloud Services), I have proven beyond doubt that I can go directly to customers and bypass the channel.

So if cloud services are the way ahead and I already have a 40% market share, why don’t I leverage my commercial advantages and be the first to offer an “Easy-IT” model to businesses and customers based on my own AWS cloud offering? For sure there will be some investment involved, but what’s easier, trying to convince individual business owners with no loyalty to me, to sell my products or to sell and support them myself? In terms of a long term growth model it really is a “No Brainer!”

Should Amazon make the decision to go direct to customers with AWS, the decision I’m sure that you all hope won’t happen, (and who are you really trying to convince on this point would be my question to the owners of MSP’s?), the decision to market, deliver and support cloud services themselves, just who do you think has the deepest pockets in the dash for market share and in controlling customers requiring IT services?

In my opinion the dash for customers is well and truly on and funnily enough it should be both vendors and the owners of MSP’s who should worry about the potential threat from Amazon. If there is customer demand for cloud based IT services, which there clearly is, those MSP’s without a cloud offering are on borrowed time; not only are they selling to a diminishing market, they are doing so with no current ability to expand and take cloud offerings to verticalised markets, in order to transition to the safer haven of being cloud services provider.

As for those MSP’s with cloud offerings, well it is a dash for market share and building loyalty with customers before the inevitable branded vendor models hit the marketing channels; the days of waiting for customers to contact us and having no effective new business development campaigns continually running are over, if MSP’s want to survive.

For traditional vendors, well there is also a threat; the market share held by Amazon is huge and remember, they do not think like a traditional vendor, Amazon is expanding into the territory of the traditional vendor from the safe foundations of an already successful business, (and boy is it successful), so they are probably looking at the sector and the opportunity from a fresh perspective, that gleaned for their existing businesses and successes.

If there is no appetite from other vendors to go direct to customers, but someone like Amazon go direct to customers, then vendor partner programmes are going to have to be able meet head on the challenges that may be coming their way.

An interesting and thought provoking discussion for sure and over the next 2 articles I will expand more on the challenges facing both vendors and the owners of MSP’s. Should you be a senior professional at a vendor or the owner of an MSP, and this article has raised some questions that you would like to discuss, over the last 3 years we have worked with both vendors and MSP’s to deliver strategies for taking cloud services to verticalised markets.

So if this post has resonated with you and you would like to explore how we can help you achieve your growth aspirations, then please do not hesitate to contact myself or my colleague Jane Gatfield on 0118 947 1010, or email us at andrewb@virtuosoconsultancy.co.uk or janeg@virtuosoconsultancy.co.uk  

For more information about our services please visit www.virtuosoconsultancy.co.uk 

To read more posts covering all aspects of sales, marketing and business development for MSP’s and VAR’s, please visit our blog; http://it-business-growth-strategies.blogspot.co.uk

How Valuable Is This Professional To MSP’s and VAR’s?

I wanted to explore today what, in all probability, the most valuable member of staff in these market conditions would look like to the owner of an MSP or VAR; that illusive senior employee and business strategist with the skillset and experience that just does not exist, the professional who is expert in both the technical and sales aspects of the business, who knows how to maximise and deliver the industry myth of excellent service delivery coupled with the commercial realities of maintaining a constant sales pipeline, keeping track of all the customer projects and support requests, whilst also maximising productivity within the engineering department and maximising profitability.

On top of that they are the industry expert for growing your business and profits from increased levels of sales; not just by maximising existing opportunities for growth from effective and continual account management, (whilst also protecting your existing customer base from aggressive approaches from your competitors), but by having the experience and knowledge in these demanding trading conditions, of knowing how to get you new customers and avoid being in the expected 35% of businesses in the channel that will fail in the next 2 -5 years, as has happened in the US.

And it is these skills that are so valuable and in such demand because the trading landscape has changed so much over the last 3 – 5 years. The new business development procedures of the past combined with organic growth and referrals, will just not be enough to survive in the “New Normal” and worse, if you don’t have the skills to grow in these harsh and challenging conditions, you will probably be managing your business into decline, so selling it at the sort of valuation you would want to receive is not an option either.

So in order to deliver on all this promise just what would be the skills-set of this highly desirable professional? Well I think it would encompass the core skills below:

The delivery of new business development campaigns; In-depth commercial understanding of how the commercial trading landscape has changed for MSP’s and VAR’s over the last 5 years and the strategies now required in order to continue to grow profits; asked to write a White Paper on this process for those trading in the IT Channel, a copy of which can be obtained by following this link: http://www.virtuosoconsultancy.co.uk/white-paper

With the first purchase market now exhausted they will be an expert in the current trading conditions and during the last 3 years will have continually built and delivered the successful campaigns required to undermine the stature of existing suppliers within target markets; this process will have necessitated an in-depth level of commercial ability and acumen in the following processes:

The building of “Value Propositions” that have commercial value; The ability to identify how products and services offerings can be packaged and taken to target verticals where they have genuine value to target audiences, and in a language that they understand, so they are going to be perceived as the solution to actual problems by the target audiences.

Market research and transitioning into new markets of immediate opportunity; Panoramic and in-depth understanding of the market, the strengths and weaknesses of your competitors and how to build and exploit your commercial advantages; as well as the ability to assess the legislative and economic factors to find and exploit new markets of immediate opportunity, combined with the approach that will be required in order to ensure success. This ability will also be combined with an in-depth knowledge and high levels of experience with vendors and their campaigns, how to build and exploit these relationships with vendors and to identify immediate market opportunities from new product launches; in terms of integration into existing products and services offerings, and taking a competitive commercial proposition to target markets.

GDPR and data collation specialist; The importance of data to the successful business, as we move into and tackle the challenges of operating in the channel today, must not be under estimated. Not many businesses will have the databases required to begin to build new sales campaigns; to do this in the new post GDPR trading landscape any business will need to be an expert in obtaining the contact data for the decision makers within their target markets and know how to run marketing campaigns that are GDPR compliant, as without these operational abilities, your business will be unable to deliver messages about your business to anyone. This individual will bring this immediate expertise to your business and the opportunity to turn this situation to your commercial advantage.

The construction and delivery of successful marketing campaigns; The inconvenient truth is that the marketing landscape within the channel is extremely challenging; apathy prevails with target audiences, who already have an incumbent IT supplier in place and there is little desire to change. The owners of MSP’s and VAR’s must appreciate that whilst their business represents their life’s work, their target audiences do not care. This individual will be an expert in building and delivering, (from the ground floor up), the highly targeted content based and direct message campaigns required to begin to engage with target audiences.

Expert at undermining existing relationships of supply; Highly experienced in the trading dynamics at play within target markets; with the first purchase market now exhausted within the UK, all businesses within the channel are effectively competing to increase the size of the market they hold, and this presents a market dynamic that thus far, the owners of VAR’s and MSP’s have not had to come to terms with. The reality is that, in a market where all the businesses you are targeting have existing relationships of supply for their IT services, then the only growth model prevailing is that of undermining existing relationships of supply. This individual will bring the commercial knowledge of this process immediately to your business and the ability to be way ahead of this curve and gain a commercial advantage on your competitors.

Protecting your business from aggressive competitors; If we accept the market trading reality then we must also accept that our competitors will be looking to target our existing customer base with their products and services offerings. They will be looking to exploit every weakness and take advantage of any situation, especially when things go wrong. Therefore to protect your current level of income, initiatives must be put in place that revolutionise the delivery of your current services offering and protect the income you currently enjoy, from these aggressive approaches. This individual will bring that expertise straight to your door.

Building your brand within your chosen markets; Highly experienced in the effective use of content marketing, direct marketing, e-campaigns and the effective leveraging of social media platforms, in order to raise awareness and to get your message over to your target audiences.

Building and developing winning sales teams; Whether that be for account management or in new business development functions, this individual will bring experience that is “Current” and the ability to immediately increase the revenues enjoyed from account management procedures, aligned with the ability to build, develop and manage the new business development sales teams capable of generating and exploiting new markets to their full potential.

Expert at sales enquiry management; Fully versed on all the processes required for the successful nurturing and follow up process, in order to take new target customers along the journey from managing initial engagement with campaigns to the successful sale. This will involve an enquiry management process encompassing all the integral points of contact required, in order to obtain new business including: identifying genuine engagement, (including engagement with electronic campaigns), managing electronic engagement, developing electronic engagement to the first conference call and meeting, developing the desire for your products and services, identifying “The In” and developing that towards the successful sale.

The writing of successful proposals and delivery of the winning pitch; This individual will have read enough overly “Tech Laden” proposals to know exactly why so many resellers fail at this stage. Therefore they will ensure that the correct qualification of the customer’s needs and requirements takes place before any proposal is written, because they will then be able to identify the “Drivers “ at play and the customer’s desired outcome. This individual will appreciate that it is this process of qualification that then makes it possible to construct a proposal that delivers exactly what the customer requires, in a language that the customer understands. More importantly this individual will be an expert in the delivery of the proposal to the relevant board of directors, able to answer the inevitable questions, make the process more personal, deliver the “Wow Factor,” build obligation and therefore secure the sale.

Exploitation of lucrative co-selling opportunities with vendor campaigns; The technical pace of development with vendor offerings is relentless. However the vendor rarely knows the “Real World” commercial value of what they have developed, how to take it to verticalised markets or how to integrate it with a suite of other product and service offerings to create a solution that adds real value to the end user. Having worked extensively with vendors this individual will know how to find and leverage the right products and vendors, build strong relationships with them and develop lucrative co-selling opportunities that maximise the revenues available for the VAR or MSP.

Staff development; building winning teams and a succession plan; Vital if you are to grow and to succeed! If you are going to grow you have to have the ability to find and develop the right people within the roles required, and these cannot be self-taught because they do not exist in the sector. If you are ever going to be able to enjoy the fruits of all your hard work and retire having sold the shares within your business, someone will need to build this succession plan on your behalf involving developing the team of likeminded and committed professionals who understand the journey and “Buy In” to the business and its vision. Without this you will never be rewarded for all your hard work; This individual will bring the ability to deliver these skills, along with the desired outcomes, straight to the front door of your business.

Expert in both traditional in-house IT systems, as well as transitioning to cloud services and managed services; If your main focus today is with on-premise networks, this individual will know how your business can target the markets who cannot or do not wish to transition to cloud at this stage, whilst planning and strategising the eventual transition to cloud services for both your business as well as your customers, to the commercial advantage of your business. Equally, if you are already in the process of transitioning to MSP, MSSP or cloud service provider, this individual will know how to make the financial business model work, guide you through the transition profitably and identify and target customers for your new products and services.

Project managing technically and politically complex IT projects to successful completion on time and on budget; Excellence in service delivery is paramount to building the reputation of your business and keeping your customers tied into you. This individual will provide expert project management skills to your business having brought the most technically and politically complex customer projects to completion, successfully, on time and on budget. From complex, high-stakes financial services infrastructure projects, to replacing the entire network infrastructure at the U.K.'s most expensive independent school, to multi million pound ERP implementation projects, they have extensive experience in bringing people and technology together to deliver successful and profitable IT projects for all parties concerned.

Deep technical understanding; Having the benefit of a technical background, with over a decade of hands-on network engineering experience, this individual fully grasps the technical complexities of designing, building and maintaining effective networks, and are fully versed in technologies from vendors such as Microsoft, VMWare, Citrix and many security vendors. As such this individual can design, specify and price networks and managed services that will both deliver your customer's objectives and make you money. They will also have an immediate grasp of your products and services, how they work and what problems they solve for your prospective customers.

Detailed understanding of the commercial and practical realities of running a successful and profitable engineering department; This individual will fully understand the people and organisational challenges of running an effective engineering department that is also highly profitable. As such they bring experience, business processes and procedures that will ensure you are getting maximum value from expensive technical staff and infrastructure that serves to maximise overhead absorption and therefore maximise profits, whilst also delivering the highest levels of service management to your customers.

Now you might be tempted to say that this person does not exist and that even if they did, they would be such a “One Off” and of such commercial value that, in reality you could never afford to employ them, and I would agree. But what if I said that these skills and this experience are in fact available to you and right now, and on top of that they are available on a flexible and part time basis as and when required for your business?

I can say this because this is exactly the level of experience contained within our company and thus available to you, and effectively this is no different to what we do for all our MSP and VAR clients; which ultimately involves us going on to work on a flexible basis around the needs of their business and supplying the skills and expertise required in order to succeed on their behalf.

In the last 36 months we have already constructed, (from the ground floor up), and delivered complete and successful sales, marketing and business development campaigns for MSPs and VARs operating in the Independent Schools, Pharmaceuticals, Legal, Recruitment, Accountancy and Financial Services sectors, to name just a few. As well as building sales and marketing campaigns for developers of “Game Changing” software applications.

Should you require, we have immediately available and existing, highly effective and proven sales, marketing and business development campaign modules ready for your business that have already been utilised to sell many different product or services offerings; from traditional in-house infrastructure to cloud based solutions.

My fellow directors and I have over 40 years combined experience in growing businesses and can deliver sales, technical, operational, business development and marketing experience that is IT sector specific, straight to your door.

We know how to build new business development campaigns and to drive them towards successful outcomes; the initiatives involved are “Current,” continually evolving and proven in the demanding trading conditions of today, not in the past. We know how improve your productivity and how to target and speak to the decision makers in your target markets, but most importantly, we know how to grow your business and make you money!

If this post has resonated with you and you would like to explore how we can help you achieve your growth aspirations, via our flexible business development consultancy approach, (supplying expertise required as and when it is required), then please do not hesitate to contact myself or my colleague Andrew Banning on 0118 947 1010, or email us at andrewb@virtuosoconsultancy.co.uk or janeg@virtuosoconsultancy.co.uk

For more information about our services please visit www.virtuosoconsultancy.co.uk

To read more posts covering all aspects of sales, marketing and business development for MSP’s and VAR’s, please visit our blog; to https://it-business-growth-strategies.blogspot.co.uk/