In our toolsmith series we’ve been looking at IT manufacturers and software providers who aren’t looking for channel partners to resell their products to end customers. Rather, they are focused on selling their products directly to those channel partners for use in creating new services to sell to their customers.
No longer do channel partners have to struggle to squeeze margin out of products in a highly price-competitive market. Instead, they add new high-margin services to sell to their existing customers which is, of course, five times easier than finding new customers.
“We believe that every IT services provider can grow their business and offer powerful cloud solutions” is a statement on the “History” page of the BitTitan website. They further clarify this statement by adding, “We’ve used a decade of feedback to build solutions that solve IT services delivery and business challenges. We remain dedicated to helping our customers become more efficient, adaptable, and profitable in this new cloud era.”
Reading this without knowing the company well, one might think they’re an IT services delivery business in the business of helping other IT services delivery businesses. To a growing extent, that’s true.
A Perfect Example of the Channel Toolsmith Model
In 2009, when everybody was struggling to migrate from on-premises infrastructure to the cloud, BitTitan introduced MigrationWiz, software designed to make those migrations much faster and much easier.
Many channel partners quickly began selling this software to their cloud customers.
Others saw a better opportunity. Instead of selling MigrationWiz licenses to their customers, they bought them for themselves and used them to earn fees migrating those customer’s infrastructures for them. The cost of the software license was simply rolled into the total cost of delivering the service. The rest of that cost recovered the partner’s cost of payroll and produced a larger profit. A much larger profit.
This was a perfect example of the Toolsmith business model in action. BitTitan had forged the tool, and their partners used it to serve their customers. Smart partners charged the same migration fee they had been charging when they performed the entire process manually even though MigrationWiz accelerated the process so significantly that it took far less time. They realized that customers weren’t buying the hours it took to do the job, they were buying the value of having their workloads migrated. Same fee, fewer labor hours. That’s smart business.
The Need for the Toolsmith Model
Geeman Yip, CEO of BitTitan, suggests that MSPs begin by looking at the world from the perspective of the end customer. The hybrid world they live in makes many things far more complicated, and hybrid extends far beyond on-premises environments to include many combinations of public, private, and multi-cloud approaches. Integration of these various systems is complicated, requiring a variety of skill sets. But the staff IT departments hire tend to be very specialized. Exchange admins, storage experts, networking engineers. The movement from specialists to generalists can be a long, expensive process.
Beyond infrastructure, many functions have moved to the Software-as-a-Service (SaaS) model of delivery.
On-staff technology experts are kept very busy, and often find themselves using slower processes like maintaining spreadsheets to track various things. These companies don’t want to track and manage relationships with dozens of vendors. Some have had to hire entire accounts payable, procurement, and legal departments just to purchase, track, and maintain compliance with the multitude of vendors involved in their IT environments. Smaller companies simply lack the resources to do all that, or even figure out which applications they need for each new function requested of them.
“I don’t think you can do internal IT everything anymore,” says Yip. “No matter how big or small you are. The smaller you are, the less expertise. The bigger you are, the more complex of an environment and you don’t have specialists and you need specialists.”
His observation that the days of do-it-yourself internal IT departments are over is great news for MSPs.
Geeman Yip recalls back in 2007 when he launched BitTitan. “I created a channel because I just didn’t have salespeople. Microsoft has a channel, why not use the same channel? Fast forward to today, those things have made us really successful.”
He then looks deeper into the channel, observing, “A lot of people are still trying to enter into this channel and they continue to fail. You can spend hundreds of millions of dollars building a channel and a lot of time but they just don’t do it for the right reasons. They’re just doing it because they want to squeeze the money out of the IT service providers versus looking at this thing and saying let’s truly make a partnership!”
He then shifts to the IT service provider perspective, observing that there are many things MSPs and other ITSPs must sell from a defensive standpoint. If they don’t, someone else will, opening the door to that competitor to take away many other sales. Cloud veterans will remember that as being one of the reasons they were urged to move quickly to adopt cloud sales.
ITSPs are now serving a very data-driven world, suggests Yip. Migration is only the first step. Data is fluid, and easily becomes fragmented. With various systems on various platforms, including SaaS platforms, data can easily end up scattered across a variety of storage facilities. This becomes even more of a challenge as multiple systems need to access the same data so they can process and give us better reporting to help us make better decisions.
He calls this “data transformation” and describes three key aspects:
- Consolidation to create a single system of record, a single source of truth.
- Migration to keep data fluid. Imagine a SaaS company that has your data. You’re locked into them until you migrate and replicate that data somewhere under your control.
- Third is the need to synchronize or replicate subsets of that data in other systems as needed for analytics and other processes.
Automate Where Possible
Yip points to Voleer, the company’s new product, as a vehicle for the kind of process automation needed to accomplish data transformation regardless of sources and destinations. The goal is to achieve a more holistic outcome across all systems while also reducing operating cost. “Especially with service providers, where margins are shrinking and it’s getting more complex with fewer resources with which to do more,” explains 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.”
Yip also emphasizes the importance of automating traditional MSP services such as network monitoring to remove expensive human labor from the process and reassign those resources to more proactive, productive tasks such as customer interfacing, network improvements, application of automation and other techniques to improve the customer’s network operations, especially as monitoring becomes more diversified and complicated. Interpreting network traffic logs is fairly straightforward and technology can be used to recognize patterns in the traffic that may indicate trouble. Monitoring servers, cloud services, APIs and other interfaces, applications, workloads, data integrity, capacities, and other variables becomes increasingly more sophisticated.
In essence, Geeman Yip feels that anything that can be accomplished by looking it up in a manual should easily be automated and accelerated, freeing up human resources for more valuable work.
Yip encourages all ITSPs to leverage assessments to open more doors to more opportunities, boiling them down to the simple sequence of collecting and processing a large amount of tenant environment data and producing recommendations for improvement of the security, the license utilization, configuration efficiency, and much more. What is being done manually on spreadsheets today and taking days or weeks could be accomplished in an hour, speeding sales processes for ITSPs.
Resolving Problems the Customer Didn’t Know They Had
Yip has a favorite example when it comes to the things customers do or don’t do that causes them grief.
“As you work in a company longer you get promoted, hopefully. And when you get promoted, you get access to different systems. You need different access, you need more access, you might not need previous access, right?”
“When you change departments,” he continues, “you may get new permissions. But you seldom get your old permissions removed, even if you don’t need them anymore. Who actually opens a ticket saying, ‘Hey, I no longer need access to this. Can you please remove my access?”
How many times do employees in a new department use their unchanged old permissions to reach data they no longer should have access to? If you can’t answer that question, you’re not alone. But an enterprising ITSP sales professional could use many examples like this to demonstrate the value of using tools like these to interrogate the many areas of network operations that simply aren’t well governed today, if they’re governed at all.
The Only Limitation is Imagination
BitTitan’s technologies offer a great example of how MSPs and other ITSPs can innovate new services based on new tools becoming available to them. As the channel moves further and 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, new offerings for existing customers, are the ones who will grow their businesses most rapidly. This Toolsmith series will continue featuring sources for new tools regularly. If you know of any and would like to share, please contact me at [email protected]