Vetting Vendors is Key to Cloud Sales and Success for MSPsBy Howard M. Cohen | Print
What should information technology (IT) managed service providers (MSPs) consider in selecting vendors to be successful overall — especially in cloud sales?
You can’t be all things to all people.
In fact, you really don’t want to be all things to all people. Most people prefer specialists to generalists. The day of the family doctor has given way to the internist, the pediatrician, the OB-GYN and a host of other doctors as part of your health care team.
Similarly, corporate and mid-market customers seek specialists in messaging, storage, networking, wireless, cloud computing, multi-cloud and more.
Focus is the key to becoming known as the go-to provider for your particular specialty. Of course, there’s also the challenge that comes along with specialization: Customers want complete solutions implemented by experts. That means you must find a way to provide all the services you’re not specialized in. In today’s market, don’t even think about trying to “fake it.” The only solution is to partner with other specialists.
Nowhere is this more the case than in cloud computing. The very nature of cloud computing and the advantage most sought after is that you can pick and choose the best vendor for each service.
That selection process is at the heart of what you as a cloud service provider (CSP) do for a living. Beyond the old days of integrating hardware and software from various vendors, you are now becoming the de facto expert in integrating entire cloud services from various vendors. You’ve come to know which ones are best-of-breed and which ones play well with others.
Exactly how did you come to know all that?
You become the expert in selecting and integrating cloud services by exploring the various offerings in the market and thoroughly vetting those that seem to be a “cut above the rest.”
For those who want to do the best possible job of vetting and a strategy to avoid headaches later, here’s a quick set of guidelines:
The first question to think about is when to vet vendors? The answer is now.
Most IT service providers start to seek a partner for a specific project when a customer asks them for a service they don’t provide themselves. This is, by far, the worst time to start seeking and vetting partners. You’re in a rush. The customer opportunity only has a limited shelf life before they start looking for another provider. When you rush, you tend to lower your standards. It’s much easier to choose the wrong partner or vendor when you’re doing so “under the gun.”
No surprise, the first thing to evaluate is their quality of service delivery. Use your own standards as your guide. Does the partner you’re looking at deliver the same level of quality you would if you were delivering their service yourself? Can you comfortably and confidently stand behind their work? Your customer relationships are on the line here, so there’s no room for compromise.
Obviously, you’re selling a service you don’t know how to do yourself. You will be dependent upon your partner to deliver all-important customer support, so it’s important to determine just how responsive and thorough their support is both to customers and to you.
Give careful consideration to what you want from the vendor relationship. Will you white label the service and make the vendor transparent? Good idea if you plan to eventually build your own and transfer your customers over to increase profitability. Will you feel comfortable working with the people you meet at the vendor? To some extent, you need to trust your instincts, and to another extent, you can ask to be introduced to their partners in other regions to discuss what it’s like working with them.
Does the vendor provide their own billing direct to customers — if you don’t want to take on that function? Do they also make it easy for you to buy and resell their services if your customer wants only one invoice and wants it to come from you? Or perhaps you want your customer to only perceive you as the sole provider. There are many solutions here, including finder’s fee, subcontracting, partner-of-record fees and commissions, each with its own terms and conditions to explore. Be thorough.
Done well, proper vetting results in a whole that is greater than the sum of its parts, as you create a superior offering by integrating superior services along with your own quality of coordination. As you grow your own cloud practice, you’ll need more cloud vendors and also more direct service partners. Vetting and selecting the best partners is the cornerstone of building an extraordinary service business.