If there were a line for Cisco certification to act as a master network
operation center for other managed service providers who lacked infrastructure,
Colorado-based Heit would be at the head
of the line.
The managed services provider specializing in the financial services sector
is a big Cisco partner and proponent of its channel programs. It’s also a big
advocate of the managed services model and vertical alignment. And its
management, under the leadership of Dan Holt, is focused on growing the
business as quickly and soundly as possible.
The new
Cisco program that goes into effect today allows managed services providers
with certified NOCs to provide infrastructure services to other MSPs, with all
partners in the chain receiving the same benefit of the overall Cisco managed
services program. In other words, Cisco won’t penalize a master MSP for
reselling rackspace to smaller MSPs. Cisco believes that the change in its
managed services program will stimulate more peer-to-peer relationships among
MSPs.
It didn’t take a lot of prodding for Heit to jump into peer partnerships.
Holt tagged Ken Totura for the company’s vice president of sales post, which
includes managing peer partners. Totura's appointment is significant because
he’s the guy who built the 2,000-strong MSP partner program for MX Logic; that
program was the crown jewel McAfee sought when it acquired the security service
provider this summer.
As Totura says, the goal of the Heit partner program is to expand sales
capacity and reach, target customers in remote geographies, gain deeper
penetration into their core vertical and, perchance, get help entering new vertical
markets. But the one thing you won’t hear Holt, Totura or Heit as a company say
is that they’re anything like a vendor channel program. “If a few partners work
together to survive these economic times, it’s actually a good thing that we’re
able to ride this wave together,” says Holt.
The truth is that the partnership model that Heit and many MSPs and solution
providers are building don’t just resemble the partner programs of their
vendors; they are the nearly the exact same structures. And the reason they’re
the same is out of necessity. Here’s why.
Cisco is big on fostering peer-to-peer partnerships in its solution provider
community. At its partner summit earlier this summer, Cisco executives hammered
home the benefits of solution providers partnering. The synergistic resources
and capacities would mean they could extend their reach and increase deal
sizes, which leads to higher revenue yields and profits.
This is hardly a new concept. Microsoft and IBM
have preached the same philosophy for the past several years and have hosted
speed-dating sessions among their partners at conferences. The Ingram Micro
VentureTech Network and Tech Data TechSelect communities are loosely based on
bringing solution providers together for collaboration and, potentially, partnership.
And industry groups such as 1nService and PSA Security Network were
formed to ease the process of executing on peer-level partnerships.
But partnerships are complicated business. Partnering solution providers and
MSPs must negotiate the terms of their relationships—even in one-off
engagements. What are they precisely going to partner on? What’s the division
of work and responsibility? What’s the division of costs and expenses? How is
revenue and profits dived up? Who’s responsible for warranties, guarantees and
liabilities? And who leads the customer relationship?
If those issues aren’t complicated enough, try a few of these lingering
concerns. How do you protect standing accounts from infringement from you
partner? How do you guard against your partner poaching intellectual property
and personnel talent? Who absorbs back-office costs and business development
activities? And who earns the most credit in the vendor channel programs you’re
selling through?
It’s issues like these that have many solution provides and MSPs building
sustained partner programs. A partner program doesn’t eliminate any of the
above concerns. What they do is make the solutions to those issues repeatable
and scalable as more partners are added to the program. The host partner is
able to define the products and service eligible for resale, set the market
price and margins, and publish a fee schedule for support. Everything is
defined up front.
ISVs have had partner programs and channels from those of their platform
vendors for years. The concept of the master MSP reselling capacity has been
around since the first managed service provider realized that he couldn’t scale
sales fast enough to utilize all his data center capacity. But the advent of
homegrown solutions and systems, cloud computing, and managed everything is
providing solution providers with inventory that retains enough margin that
they can be resold through multitier channels independent of their vendors.
As the IT marketplace continues to transform, expect to see more solution
providers and MSPs take on more of the characteristics of the vendors that
they’ve supported through the first two generations of the channel. Perhaps
someday soon, the term “channel chief” will apply equally to vendor and partner
executives running channel programs.
Lawrence M. Walsh is
vice president and group publisher of Channel Insider. Read his research
reports at [CI] Perspectives.
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