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What service can you offer that is not managed? The delivery of any service must be managed to assure quality, so calling it a “managed service” is somewhat like referring to “wet water.”

Many service providers are dropping the superfluous word “managed” and replacing it with a wide variety of others in an effort to focus on their own specific value propositions. The increasing trend toward specialization has become more evident in the channel in recent years. Now it is becoming a survival strategy in which all channel partners need to invest time and careful planning.

Solution Selling and the Generalists of Yesteryear

When information technologies were fewer and more straightforward, channel partners could easily succeed as generalists.  Customers turned to one “solution provider” for everything, from servers to storage to software to systems infrastructure. They integrated everything together for customers who enjoyed complete solution that incorporated the best of each category.

“Solution selling” was everyone’s strategy—to solve business problems with technology. Over time, however, the definition of “solution” began to soften. Soon, the term came to mean “infrastructure.” To solve any problem, you threw more infrastructure at it.

However, the customer’s definition of “solution” was still something that solved their current business challenge. They wanted relevant solutions, highly specialized solutions.

Focus Today on the Specializations of Tomorrow

Not only were customers less than satisfied with “infrastructure” solutions, but infrastructure itself has become a commoditized utility. Customers now know they don’t need to invest in owning their own infrastructure. They can turn to Amazon Web Services, Microsoft Azure, IBM Softlayer or any of several other providers, and subscribe to whatever infrastructure services they require. 

Better yet, these services are far more responsive than having their own fixed infrastructure. Need more storage, more memory or more processor capability? No problem. No months-long procurement process. Just adjust your subscription. If you use more resources, you pay for them. When you’re done with them, you release them and stop paying for them. Easy.

This leaves tens of thousands of channel infrastructure partners with a dilemma: what to do for a living now that customers no longer need what they’re selling.

Many have turned in their “M” and exchanged it for a “C,” becoming cloud service providers (CSPs). These new-wave specialists are expert at making cloud services from various vendors interoperate seamlessly and productively. Customers appreciate having a resource who can help them select and combine the best possible services.

We’ve already seen the rise of print service providers, communication service providers, disaster recovery-as-a-service (DRaaS) providers, desktop-as-a-service (DaaS) providers, integration platform-as-a-service (IPaaS) providers and many others.

The Need for Innovation

Midmarket customers have long turned to service providers to help them level the playing field with larger corporations by enabling them with similar IT services that they could not produce themselves. This can be expected to continue with greater diversification.

Customized software development is changing. With the rise of microservices packaged in containers with all the resources they require, the new development process involves having these encapsulated routines call each other as needed. This makes it possible to “assemble” applications rather than “code” them from scratch. This promises to drop development costs to a level that midmarket companies can afford.