One of those core questions every MSP should be asking all the time is, “What can I do to grow more business?” The funny thing is that the answers are all around us.
As a “channel insider” you may also be wondering how valid it is to call ourselves a “channel” anymore. For some the mission is still to move a product from a manufacturer to a distributor to themselves to their customer. But there are fewer and fewer of those as the big infrastructure gear sales have given way to cloud. Who needs to buy and stand up servers anymore?
What IT Customers Really Buy
If your answer to the question, “what do IT customers really buy?” is “computer stuff,” you’re at the very least missing out on the bulk of the available profit, and at worse driving yourself slowly out of business.
The “right” answer is probably something like “they buy what computer stuff can ultimately do for them in the way of helping their businesses run faster and smoother.”
In any case, the most direct path to that answer is applications.
This shouldn’t be news to anyone, but it may be something you haven’t been thinking about much lately. Computers themselves are large useless hunks of metal and plastic until someone runs an application on one. The earliest “personal” computers like the Apple ][ and the IBM PC (which just celebrated its 40th birthday last month) couldn’t sell much until applications like VisiCalc and WordStar became available. Now users could build their ledger sheets on the computer, which automated all their calculations. And people could use their shiny new PCs to do their word processing. Other products like dBase II enabled people to keep and use tabular data files. Later developments like Windows and the Mac operating system added a simpler operating interface based on icons and drop-down menus.
Without those applications, not many PCs would be sold. With them we launched a channel that is currently entering its fifth decade.
So It’s All About Applications
It’s all abbott applications, and it always has been. And MSPs have been selling and supporting office productivity, ERP, CRM, database, and other general purpose applications forever.
But 10 years ago, then-Microsoft Global Channel Chief Phil Sorgen predicted dramatic changes ahead. In 2011, Phil announced that “Microsoft has only one job. That is to provide partners with a platform on which they can be successful running their own solutions.”
Wow. Powerful words. Only one job. Of course, Phil’s statement presupposed that channel partners HAD solutions to put on those platforms. At that point in time, when a “solution provider” used the word “solution,” what they really meant was “infrastructure.” Channel partners threw more infrastructure at every problem. Didn’t always work, but they continued to sell successfully.
Another Microsoft executive, Bill Patterson, product director for Dynamics CRM 2011, predicted we would see an “Evolution of Solution” in which infrastructure would be replaced with “business-relevant” solutions, applications that did something specific and valuable.
Today, 10 years later, Bill was proven to be right, which also proved Phil to be right. Microsoft itself realized they had overinvested in Azure infrastructure and needed to drive more billable consumption if they were going to defray their costs and realize a profit. They became maniacally obsessed with getting everyone out there to “Increase Azure Consumption.” It became something of a mantra.
What they were saying was that applications would drive more need for more consumption of more Azure services and that would bring more revenue. It was all about the applications.
You Don’t Need to Be All Things to All People to Sell All Things
Going back even earlier, in 2009 Microsoft had made many of its partners feel the game might be over. Suddenly they couldn’t send their three best test-takers to take all the tests to earn all the certifications anymore. They basically had to employ four unique individuals to qualify for each gold certification to earn each gold competency. Companies that “did it all” with a dozen staff members suddenly required 116 employees to earn all 29 gold competencies that existed at that time.
Just about every project requires more than one competency, so what was a small Microsoft partner to do?
Partner. They had to partner with other Microsoft Partners who held other competencies to complete many of the projects they became involved with. While it seemed nearly disastrous at the time, it ended up being very valuable to many partners who could reduce their overall costs while qualifying for high-margin opportunities, some of which they performed themselves and some of which they partnered on.
Partnering for AppDev Success
Today’s partner can continue that strategy to increase their business. Many of the customers you serve today have a need for custom software designed specifically to do what they need to have done. While you may have no programming skills aboard on your own staff, there are plenty of partners out in the market you can enlist to be your AppDev partner. You’ll need to vet them very carefully, get a contract going that precludes them from “poaching” your customers, and talk to some references for greater assurance.
Once you’ve identified a good partner, you’ll need to negotiate a financial basis for the partnership and then go invoice those customers.
There are many, many stories of great partnerships out there in the field. Stories about channel partner salespeople who became so good at selling competitively by partnering with the AppDev specialists they identified. Stories of infrastructure partners and AppDev companies who decided to proactively go to market together to promote new revenues for each other.
What’s YOUR great partnering story going to be?
Further reading: The Key to Channel Growth: Working with Vendors to Create New Services