One of the reasons why ExchangeDefender is on a roll this year is because I’ve been able to stay at work for over 6 months straight and keep my top talent focused on what we’re doing. It’s not like we didn’t know what we had to do before nor were we lazy – it’s just that to move to the next step you need to have all the puzzle pieces fall into place (or push them together by force and all nighters).

In the past month I’ve taken six business trips and visited with a wide range of partners, vendors, competitors – everything from end users up to CEO’s of the companies you probably work with or rely on. Among vendors, the conversations are pretty much the same as they have been a year or two ago – threat vs. opportunity, consolidation vs. partnerships, etc. Among the partners, the conversations are the same as they have been for at least the past decade: Struggling to grow.

The only thing that disappoints me about people is laziness.

Some people are just stupid. There is no help for that. If you think you don’t need to know history because you can Google it and don’t need to understand physics because it’s not a part of your daily life and don’t care about geography or politics because it doesn’t matter to you – there is no hope for you. The problem with stupid people is that there is no way to explain to them why they should care because they wouldn’t understand it and it creates an infinite loop of stupidity that can never be broken out of.

The excuse for the rest – laziness. Laziness is not just a matter of not applying any effort (sitting on the couch watching TV and eating chips) but the unwillingness to break out of a circular pattern. If you’re working well past midnight and hate what you’re working on but are stubbornly unwilling to snap out of the comfortable pattern you’re stuck in – that’s just lazy. Problems do not get easier with time, they grow.

Most of my partner-centric conversations revolved around the move to the next level – but almost all of them were dismissive of all the innovation happening out there and unwillingness to consider a model or offering different from what is already being done all over the place.

Here is a little tip – if you do the same crap that everyone else is doing, and market it with the exact same crappy cardboard marketing stock you buy in a toolkit and pair it with the brilliant advice everyone else gets from a show that is only keeping you in place long enough to give away stripper bucks and pack the vendor hall – then you will get the exact same crappy results as 50% of the people there. And that’s assuming that the other 25% of the audience goes out of business and the rest accidentally walk out into the traffic during the break because that’s the level of ignorance that is required to keep on doing the same crap over and over and expect something different to happen. That’s the kind of business that will be certified by Microsoft as an SBSC (Small Business Stupid Consultant) and dispatched to unemployment after the last client is transferred to Office 365. 

The rest – get creative. Add to your model. Add to your mind. Add to your portfolio. Instead of doubling up the effort – screw it – take your favorite client out to lunch and ask them what they would do if they ran your business.

I do this EVERY time I go on the road. In return, some brilliant people have built my business – for free – and I’ve managed to pay them back by giving them tools and resources that felt and looked as if they built them themselves. Which is exactly what happened.

Don’t lose perspective of who you are working for. It’s your clients – not Microsoft. Not your largest vendor. Not the vendor you like to go out and party the most. It’s all about your f’n clients. And what happens to the employee that does the same thing over and over, day in and day out? Business growth, like promotions and raises, comes as a result of overachievement and changing of the routine stuff.

One of the biggest failures you can have as a software business is not offering a product that the market demands. This is quite possibly one of my biggest mistakes and I’ve written and deleted thousands of words in this blog post to sum it up simply with: I was wrong. It was stupid not to offer an affordable product. But fixin’ stupid is what I do:

We have been offering ExchangeDefender since roughly 2001 and we’ve kept a pretty simple goal in mind: keep the users secure. My mistake was in the difference between the users and the business owners. Users are stupid, they will click on anything that comes into their email, provide sensitive/private information to a complete stranger and at times demand to be placed in danger (“I absolutely must receive .exe attachments, we ship everything through UPS and they would never send me anything dangerous!”). Users need a shutgun when they could be easily defended with a toothpick. Business decision makers, however, only consider business factors and try to guesstimate the cost of a security breach and data loss based on prior experience (which is typically none as most companies without a security plan tend to be gone within a few months of the catastrophic loss).

For years I refused to compromise on the price and features, for years I had one product and that one product was at times more expensive than the market competitors although the depth of the offering was far greater – but in realistic terms only the invoice amounts matter.

Last year, after we have gone through our growth pains, I approved the creation of ExchangeDefender Essentials and licensing of our technology (primarily through CloudBlock).

We built a good product that matched base offerings in the marketplace – spam filtering, virus protection, 1 week of realtime email archiving and business continuity, DDoS protection, partner branding and so on – and absolutely crushed our competitors on the price – At $0.50 per user per month it’s by far the most affordable mature email security solution.

This brings me to the other thing I was wrong about.. I assumed this would be a sideshow product that would only appeal to budget conscious providers that did not want to profit from ExchangeDefender’s immense solution stack. Wrong again. It’s the most popular product we have today. While this is in part due to our partners migrating from other solutions, it’s also the reality that marketplace is always right – people would rather buy what they want than what they need. I confused the two and I’m sorry.

Revisionist history – While I do wish I wasn’t stupid.. live and learn. Looking back though, we couldn’t have provided this product years ago. Not with the level of infrastructure, not with the product maturity, not with the technology we had at our disposal and certainly not with the organization as it was structured back then. Today, we do. What’s even more relevant is that this is the first and only product that anyone can buy at any time for whatever purpose directly at www.ExchangeDefender.com – and we’ll even help support it over the phone, web, support portal and live chat.. around the clock. With reduced complexity come easier deployments, with easier deployments comes less support and when my partners looked at Essentials, they looked at something they did not want to be on hook to bill or manage.

Fragmentation – So now that anyone can purchase ExchangeDefender Essentials, how soon are Exchange + SharePoint, Offsite Backups and Web Hosting coming along? They aren’t. We have a phenomenal amount of data on who sells what and how – thanks to Shockey Monkey and our ridiculously successful partner program. I think the MSP and VAR community is at an interesting injunction. You can either sell a commodity product and make it up on the volume or associated sales or you can make a killing on an implementation.

When I talk to partners I always ask this question: Are you making money with our stuff?

If the answer is no then why are you doing it? If the answer is yes, pimp on player. Pimp on. Because here is what I know about my partners – nobody charges less than $5/month for ExchangeDefender and most make far more when they integrate things along with it. Don’t forget that ExchangeDefender comes with web filtering, web file sharing, encryption, and a year worth of business archiving. Top that off with compliance archiving for 10 years (at under $4 a month) and you can pull revenues off the flat fee product in dozens of ways. I have partners that have built entire business lines off what we do and storage and social enhancements we’re building into the product are going to knock your socks off this year!

The biggest development in 2011 is flexibility – can you offer multiple things at multiple price points and make money? You can no longer go to clients and offer them ultimatums. You need partners that give you the edge.

To those of you reading this, I hope you choose us as we’re undoubtedly giving you plenty of options on how to best reach the massive marketplace out there that may not fit a simple filter. I have built the company on the premise that you can have any color you want so long as it’s black. Now we’re adding a rainbow.

The game of IT monopoly is picking up and large manufacturers and software companies are done with buying properties – now they are buying houses and hotels and patents and SonicWall’s and MSPs. You have to make a decision now if you’re going to walk away from your business for 3 months of rolling revenues or build something that can sustain itself for years.

Take it from my stupidity – and luck – even when you’re wrong you do get rewarded for making the right choice in the end.

Today is the last day to win some beer money from me, just hit this link:

Vlad the Imp Aler Survey

http://www.surveymonkey.com/smrmm

We’ve gotten a lot of responses and some really surprising data and every little vote and piece of feedback counts.

Now there is a lot of speculation over the Shockey Monkey RMM and I have certainly spent a lot of my time talking to my partners about what we are doing and how things fit into the business model. Some less informed people have suggested that we’re building a free RMM and I think that conclusion is somewhat misguided so allow me to lay out my cards on the table and let you figure it out.

First, we owe our business to our partners. Every dollar that comes in comes through our partners and we have constantly put money back into the products. Yes, I know some of you have been burned by ExchangeDefender bugs or delays or issues in the past but one thing we have always done is taken as much money as we can and spent it on commoditizing stuff within ExchangeDefender while other solutions outsourced and made you pay through the nose for things like encryption, business continuity, compliance, web filtering, etc. With us, those pieces are free. That represents an ongoing investment back into the company.

Second, the dynamics of our partners businesses are starting to change. Many service providers out here wouldn’t have a cloud solution if it were not for us. We’ve spent a lot of time building, scaling and reassuring server rollouts over the past few years. Now we find ourselves in a spot where we can help a lot of our partners scale their business by just having us as an entire independent unit in their organization. As in, we’re pluggable. If you want to offer Hosted Exchange you need to read manuals, create agreements, manage billing, manage support and the pain of migrations and data imports. Don’t get me wrong, none of it is rocket science but it’s time consuming and we’re can take care of the whole thing for you, down to answering the phone and connecting to the remote PC and helping your client.

Finally, service providers are starting to reevaluate their business models. I’ll leave this part of the explanation up to you, answer it according to how you see the future.

Finally, where does this put the Shockey Monkey RMM

First, there is no such thing as the Shockey Monkey RMM. We started the survey so we could figure out how you rely on your RMM software and what you primarily monitor, how many alerts you generate, what kind of reports you expect out of it and how they are used. For two reasons:

1. Research helps us identify what is relevant in the sea of data that RMMs collect. By being able to extrapolate this data inside of Shockey Monkey we can give better integration experience for the RMMs that chose to sponsor Shockey Monkey.

2. As we offer the managed services on top of our cloud offerings, we still need a way to get to the users desktop. So we could either build the thing ourselves or we could risk offending one of our integration partners that sponsored Shockey Monkey by signing up with their competitor. Not a good recipe for success.

Will the real Shockey Monkey RMM please stand up?

First of all, there isn’t one. Not saying we’re not working like crazy on a monitoring solution but it’s not something you’re going to put neck and neck with the RMM industry.

The remote access, logging, inventory, desktop and screen sharing tool we are developing is for our ExchangeDefender partners. Yeah, those dudes and ladies that helped us build this big company. It’s payback time! We are playing with a concept of offering a free RMM-like product that our partners could go and deploy in their clients offices or prospective leads/clients offices. “Here you go, just install this on your network and it will give you all sorts of useful info and ability to look at your employees desktops, interact with them and get alerts when something goes wrong. It’s free and it’s on us.” What happens next? Well, when something breaks, you can pick up the phone and give them a call. You can alert them when their warranty is about to expire, when their systems aren’t patched, call them right as they are failing to print because their print spool service keeps on crashing, etc.

We are looking at a way to take this commodity of IT, connect it with the efficiencies gained from Shockey Monkey, and tie them together into one massive, inexpensive, overly efficient IT service demand generation engine.

Shockey Monkey + Sponsor Solutions + ExchangeDefender = $$$ for everyone.

It’s really that simple as far as I’m concerned. I want to make it dead simple for you to generate profits from solutions and stop wasting all of your time trying to figure out what your business is going to look like and how little bits and pieces of it are going to connect. Because if you are a business, wasting time managing your vendors crap all day is a profit sinkhole. You should be spending time on your clients systems and getting paid, not being your own janitor.

Have you ever been up late at night and turned on the TV just to break up the silence a bit? There they are, newfound millionaires who bought houses for no money down, made it big at car or government auctions and even got free money through government grants. And if you call right now, they are going to share the secret with you straight from their $5 plastic lawn chair special. Nothing screams millionaire like sweatpants and no-name polo shirt.

I mean, you can’t argue with the numbers. Especially when their riches are smudged with a drying highlighter at the bottom of the cheap copier paper.

I’m about to share an equally earth shattering secret with you. That secret is that there are really no big secrets when it comes to building an IT business and if there were these ridiculously profitable business models that somehow nobody else has figured out.. trust me.. no businessman with more than 2 brain cells would share those tips with you. They would be an idiot to do so.

Vlad’s IT VAR Gold Mine

I recently bought 4 acres of land in downtown Dallas on the edge of Trinity River to build a data center and while digging out the foundation we found a huge deposit of gold! Now, I’m already too rich and instead of hiring $5 day laborers I’m going to give you the chance to make billions – it’s just going to cost you $1,000 so I can train you how to dig properly. Well, I won’t be the one doing it, but I will have special CEO golddigger sessions in which you can learn how to buy your own property full of gold. Those are $10K though.

Not interested? It’s probably because you’re a loser. Call me when you become serious about becoming rich.

Now most people are intelligent enough to know that the above is outright fraud.. but some folks skipped school the day they were handing out IQ points and are probably doing the math right now.. “Well, it’s only $1,000.. Even if I dig out 1oz of gold…”

Aaassssssssssss.

Advice as a service.

I am going to break protocol here and give you some advice for $10,000. But it’s worth at least $100,000.

Well, because I like you, it’s gonna be $10,000 but only if you promise to read it now. Ok, $5,000 but you have to vote for me. Tell you what, since you’re a fan of Vladville, it’s gonna be $1,000. You know what, I like your smile. It’s free but you have to share this post on Facebook. OK?

The hindsight of successful business owners is that they should have invested more money into the business back when they weren’t making a lot of money.

Every single person (that is trying to sell you some advice) will advise you to spend money.

Oh yeah?

It’s like the newspaper business. Gotta spend money to make money. Ok, well if the ads work so great wouldn’t they sell them like crack – first hit is always free. Oh, it’s not? “Wait, you want how much???”

If you want to make more money you need to buy an RMM. No, a PSA. No, you need a BDR. No, you need to get at least 100 seats of ExchangeDefender. Any guess what a marketing business sales guy will tell you you need to spend your tight budget on?

So the secret – you should ONLY spend money on getting more business. Everything else should come free unless you can mark it up selling it to someone else.

Yes, looking back I probably should have changed just about everything about my business in every way. But guess what, I don’t operate a web design business in 1997. So my ability to offer my 1997 self is as good as advice some of you feel like you should take from people that have not operated your business in years.

You were so awesome at being an MSP that you aren’t one today. Please teach me how to be just like you! I want to be an MSP millionaire just so I can try selling other MSPs my brilliance instead of sitting at home stacking cash.

You can be a Go Giver in your community. But when you want to be a Go Giver in business and the guy on the other side is asking you for a check – you’re a Go Sucker. And if you get sold, you only got yourself to blame. Because nobody knows what is best for your business more than you do. And the number one rule in business ownership is:

Will this make me money? If not, pass.

If you can’t quantify the benefit of something, and have a historical pattern of your capability to do it, do you really want to try juggling knifes with stacks of your businesses cash?

I was recently asked by my friends on Facebook (www.facebook.com/vladmmd) and Twitter (@vladmazek) about how to build a great technology business. As I was told, I spend a lot of time explaining how the doors to opportunity are being closed and not enough talking about what to actually do. Honestly, I spend a lot of time talking about our own businesses (Shockey Monkey, ExchangeDefender, CloudBlock, Looks Cloudy) and how those are being managed/promoted/built but those posts tend to get very skeptical commentary because even after years and years of documenting my every move on this blog people still somehow can’t trust me (why you’d value my opinion on this post then is beyond me but I aim to please).

So first a couple of disclaimers: I am not now nor have I ever been an MSP. The following is an opinion, not an advice. This opinion is only appropriate for a 30something looking for a business that has a medium range lifecycle (5-10 years).

Objective: To build a fast, scalable and inexpensive business that profits from the growing commoditization of network services and consumerization of IT.

Assumptions: Low startup costs, low barrier to entry, low level of skill or work ethic (otherwise you’d make more faster working for someone) and preferably a business activity that the attorney general would choose not to prosecute.

Business model: Look at the most successful technology businesses and find a way to wiggle in between them and the decision maker. Commoditize the most expensive component in the service delivery.

The Broken Model

The “technology business” model as exists right now is extremely expensive. It requires huge up front investments and huge operational expenses. All for extremely low returns met with extremely high risk.

For example, you’d be insane to start building Exchange clusters right now. I never built a voice product at ExchangeDefender and looking at the marketplace demand right now I wouldn’t even humor it. Everything “expensive” is on it’s way out – there are way too many substitutes for something big to work and work well enough.

Likewise, talent is extremely expensive, forget building a business that requires big salaries. Look at solutions like www.thirdtier.com and tell me why you’d ever create a single point of failure in your business given the price tag?

Finally, there are two huge challenges to the existing business model: consumerization and commoditization. Everything that is huge and expensive is being beaten by smaller and simpler solutions that don’t require an army of people to build and maintain.

The Opportunity of Viable Threats

The opportunity of connecting the technical dots out there is huge.

The only issue is that nobody has a huge interest in promoting them because if you’re already selling stuff you naturally want to sell the most expensive (highest margin) stuff you can get away with. Smaller and cheaper stuff, while it works just as well, is something as threatening to you as it is threatening your suppliers. But with your suppliers starting to compete with you… well, it’s time to make difficult decisions.

Make yourself the product and associate everything around you as a service or a tool that can be sold as a subscription.

Don’t do any actual work – resell services, service contracts, support, tools – set yourself up as an uncomissioned salesman that is collecting a margin but do so without liability or responsibility for what is being sold.

Outsource everything except management. You cannot run a modern business as an SPF, there is a long blood trail out in the industry as a proof. But forget about working 9-5.

Embrace working with people. The ones that make around $10/hour.

Redefine what you offer. Expertise, not grunt monkey work. The two need to be separate entities because if you try to balance both you’ll eventually be an expert grunt monkey making $10/hour for a job that others would charge $110/hour.

Be loud and annoying. Forget about a marketing budget.

What is it you do around here

Look at what’s expensive and commoditize it – training.

Look at what’s being consumerized and connect it – mobility.

Businesses are spending boatloads of money on consumer gadgets that they are barely managing or having any idea how much of their staff time is wasted on them instead of going towards “productivity” benefits they bought them for in the first place.

Do you go into business of managing mobile devices? Hell no. That costs a ton of money. You need skilled engineers, ridiculously expensive software and you can only be assured of one thing – it’s always gonna be a step slower than the stuff that’s coming out.

So what do you sell? If I had nothing better to do, I’d sell a low flat-rate training technology service. That is layered with a sales component on top of it. You could even sell managed services – just be sure you’re not the one stuck delivering them at 5 AM on Saturday.

This is something you don’t need a lot of resources for – you don’t even need an office. A virtual office with an impressive meeting space (leased by the hour) along with some admin assistant time for marketing, followups and scheduling.

The way to lead and ride the wave of consumerization of IT is to be a user, an expert – and leverage that to others that want to make it work. All that’s in it for you is 10-25% commission along the way.

Conclusion

There is no doubt cloud is huge. There is no doubt that big network infrastructure stuff is in pain. There is no doubt all of the techical stuff – from equipment to skill – is being commoditized. It’s also a fact that consumerization is taking the IT departments and technology companies out of the loop.

It’s also a fact that these companies have a ton of money and massive infrastructure in place to do what they do. Some of which they will spend on you if you can connect them to the base they are losing so rapidly.

Note: Prior to writing this blog post I actually did some research because I’m extremely biased towards money and as everyone in this business, privy to some rumors and grapewine complaints. This is something that has been on my mind for a while and it appears many of you disagree with me. I am offering this post therefore as my opinion as a devils advocate. While I’m sure it will offend you, the goal is not to offend you but explain the circumstances as I see it and hopefully find a common language towards a more productive way of working together.

Business Perspectives

The Vendor

It’s a crisp spring morning.

The iPad 2 has just been announced and you’re starting to resign yourself to the fact that you need to follow the marketing in order to sell the technology. Screw it, let’s call our clients in for a cocktail hour next week and show them how their iPad hooks into all that stuff we’ve sold them.

It’s Thursday, cocktail and hors d’oeuvre are carefully surrounding your banners as the clients pour in.

You’re trying to be a good host while still staying at least six feet away from those Costco cookies. Yes, they do put crack in them.

Wonder how much business we can drum up from this?

The Client

Man, this is a nice office!!! Must cost a fortune.

And is that a BMW? I remember when this ass was delivering our PCs in a pickup truck.

55” LCD as a sign? A friggin sign? They burned $1,000 just to show off their logo to people that come to their office?

This is why we pay so much for their “Managed Services” – I bet you they don’t do jack. And god help me if I meet that prick from their helpdesk, I’ve been waiting months to punch him right in his square mouth!

Wonder what they are going to try to sell me today?

The Vendor-Client Tug of War

In every transaction there is a little component that is never put on the invoice or on the receipt, but it’s huge. The Respect. Clients feel like they are handing over hard earned money and that the person charging them should treat them with outmost respect. This is why everyone hates dealing with the DMV. Meanwhile the service provider feels like they are providing something truly unique and that the clients are nowhere nearly as grateful as they should be for what they are getting.

Nobody has drawn more skepticism from the community than Arnie Bellini and ConnectWise with their investments/acquisitions/takeovers/purchases of LabTech, Quosal, HTG and CharTec. The best public display of this is available for your consideration here: Observations from IT Nation.

Back when I first read that blog post my reaction was decidedly different:

Kate: So at what point is it going too far when you’re trying to sell everything all the time?

Vlad:

That depends on the clients bank and their overdraft policies. It’s OK to keep on selling until you’ve put their account $200 into the red. At that point I’d switch to a monthly reoccurring charge.

So I’m just after the money? Yes, that’s what we’re in the business of!

Hell, Arnie is being nice here. If I were him I’d be buying a hosting company, an antivirus company, an offsite backup company, a marketing company, a web design company… you got urinals? I’ll sell you a cake.

At that point the rant got too dirty even for Vladville but those of you that have seen me do my act live can probably guess that the list went on for a while.

Here is the thing – this is just capitalism at it’s finest.

Unfortunately, capitalist behavior puts the client at the disadvantage. While the business is pursuing it’s next rising star and funding it with the cash cow, you feel like all your hard earned money isn’t being spent in the best possible way to provide you with more services. After all, you’re paying for it and the moment the ink on the check dries you’re expecting more in return for it. So when the vendor spends money on something that isn’t directly and significantly benefiting you it starts to leave a very sour taste.

Truth is, you don’t want the alternative. The alternative is the vendor solely focuses on the product or service you’ve paid for and pays no attention to anything else. While this may sound great immediately, in the long term (and history has shown this in the software business over and over) the companies that aren’t constantly expanding and growing tend to die in either relevance or profits or both.

There is no loyalty in business. This isn’t a marriage. This isn’t a family. This is a transaction. Those of us that want to increase the frequency and sizes of those transactions have to get better at what we’re putting on the invoice. VARs change solutions and tools more often than their underwear – so if the tools and solutions don’t evolve and grow at a faster rate they pretty much face certain obsoletion.

I (and I’m sure almost all of you) have been on the receiving end of this as well, when a client “chose to go in a different direction” because they didn’t like the direction the company was taking, found a product that was $1 cheaper somewhere else or generally reduced you and your service to a discount rack at Dollar General.

Clients reserve the right to take their business elsewhere. Businesses live and die through their investments.

Fundamentally, that’s the way it’s supposed to be. It’s not always perfect (sales might be much better than support departments so it may seem like the company cares more about dollars than clients) and it’s not always fair (company may have to push discounts or spend more on marketing to cover for lost business) and it’s never easy (sometimes meeting client expectations requires a lot more work than it’s worth) and it’s usually hard.

In my opinion, what Arnie & Co did and what they continue to do is in their best interest and therefore the best interest of their clients because it continues to fundamentally strengthen the core product and the company.

But you should consider your options as well – if you have concerns over the vendors you are choosing and their level of respect for your business – then the data and the business better be portable so you can switch to those greener pastures when they present themselves. This is true for all of your software, all of your hardware and all of your cloud solutions as well. When you lose control of your data you lose decision making control over your business and arguably your ability to run your business.

Business of fairness is hard to reconcile. It’s seemingly only unfair when you’re the one paying the bill. If you run a business you don’t apologize for being successful, you celebrate it. We all (from the biggest to the smallest) care about profit, about margins about utilization and about stickiness. Yes it sucks when the shoe is on the other foot but that’s why we all work so hard. I (and I know some of you will disagree) believe that even the most opportunistic folks out there happen to be good people and being successful in business means embracing competitiveness.

Folks, it’s all about the money. The end.

…

Now this is my opinion and how I run and build my business. Personally, I’ve had plenty of people offer me advice on how to run ExchangeDefender and why not to focus on Shockey Monkey (because they already bought Autotask or ConnectWise) and they left anyhow. If I didn’t invest in a total cloud management platform I never would have the level of success we have today and we’d be holding a dying antispam business backing something that nobody wants to do anymore – manage onsite Exchange. Now I am in a spot where I am simultaneously launching an MSP of sorts (for the partners that don’t want to do the cloud in house and only want the profits and their brand on top of it) and I need an RMM on the backend that is going to monitor and help support that entire business. I’m partnering with a bunch of vendors and sponsors and my partners on everything else that’s needed.. That’s my deal. External parties rarely get the big picture of what is going on and if I fail none of them are going to feel bad and pay for my kids college.

The conversations, emails and discussions I’ve had with some of you over the past few days have been truly eye opening in terms of how this goes both ways. Strangely enough, these were calls ranging from my largest clients to the folks that don’t do any business with me at all. That’s community – we try to help one another even when we don’t get anything out of it. But once the cash changes hands that is a completely different story.

Please don’t use the comments here to bash Arnie & Co, I only mentioned them because they happen to have the most public commentary about this issue and it’s one that is going to get even bigger as there is more MSP tool consolidation. Same stories floated back when Dell bought SilverBack, when Autotask bought VARstreet and it’s just a nature of business. If you don’t like it, make your data more portable and less dependent on a single vendor – but that comes at a cost too.

I’m creating acronyms now – LTBPCS – Long Term Business Process Cloud Sales.

I base the following argument (and well.. a multimillion dollar business behind it) on talking to some of my successful partners that are really at the top of their game. Here is what you’re saying:

Things are great, we are really busy and we would really like to get started offering some of these solutions but we’re too busy and the margin isn’t there. Plus there is no love in the cloud with everyone trying to sell directly behind our back. Then there is the cost of billing, support and everything else, it’s hard to build a business around it.

This is something I hear from the partners that are really successful selling the cloud. When you focus on the actual itemized cost of a cloud service it is not a huge component of the overall VAR invoice – but when you look at the amount of new business brought in due to the cloud offering – it’s the #1 growth driver across these providers!

So here is the dillema – You want to use the cloud to bring in the new business, but you don’t want to deal with the low margin cloud business. You want the high end managed service advisory services and NOC management but it only seems to come as they look to outsource/remove in-house server mess. You can’t have it both ways and your sales guys are throwing the baby out with the bath water when they don’t want to pursue Hosted Exchange or Offsite Backups or SharePoint or low-margin (or low commission) cloud services. At the same time you’re not going to comp them the same for the cloud as for the other sales but you know that it will be a more and more relevant part of your business.

Did I get that right?

Major vendors are looking to offload your technical services – outsource your helpdesk, outsource your NOC, outsource your management – everyone is fighting to get the really profitable (at scale) parts of your business but nobody seems to want to take a part in trying to actually make you money.

I don’t know if we’re just nice (we’re not; we’re in this for the $) or if we’re just way ahead of everyone else but here is what we’ve been working on.

End To End Cloud Sale and Implementation

Of course, it starts with Shockey Monkey.

You can embed the storefront on your website, dictate the pricing and all the other stuff right off your portal.

Once the form is filled out, it comes to us (and you) in Shockey Monkey as a pending case:

Staff can review the order and start the sales and implementation process. Yes, the implementation is a part of sales, it tells us all the other stuff we could sell them once we’re “in the account” so to speak.

Review their order and start the process of delivering the cloud service:

The client gets a welcome message saying:

<Generic Welcome Text>. Our goal is to roll out your service correctly the first time without surprises and delays.

   Step 1: Verify the order

   Step 2: Confirm basic service requirements are met

   Step 3: Outline service rollout and deployment

   Step 4: Schedule and deploy the service

In most scenarios this can be done on a single phone call in just a few minutes.

All under your name.

All done by our staff representing your company.

All done from your own web site with no licensing components to worry about, software to support or solution to figure out. We handle it all.

Long Term

We’re going direct. As you.

Over time this will create a revenue stream large enough for you to hire dedicated sales with their own commission structure and get them involved in upselling to the end user.

In the meantime, you don’t have to worry about billing, support or service – they are still your client and you still collect the commissions but you now have new opportunities and revenues.

Here is where it gets really really cool – Kate and I have been talking to other IT vendors in the industry (if you haven’t spoken to us contact me immediately) who want their stuff sold through this process as well.

Your catalog of potential solutions is exploding and you don’t have to sit there and figure them out!

This isn’t just another take on the “Master MSP” concept or the telemarketing sales outsourcing.. this is the extension of your business process to take on the cloud and cloud services without having to deal with all the sticky pieces.

This also isn’t a reduction of your business into just making you a sales guy – it creates a whole division of your company that can be used to bring in new business (cheaply) and use it to fuel existing business lines of everything else you sell.

Just think of Shockey Monkey as an app store for MSPs.

Like I’ve been saying ever since Shockey Monkey launched… it’s not a PSA. And you ought to expect a lot more. Who loves ya?

Sidenote: If you’re curious what I’m actually working on, tune in to the ExchangeDefender Executive Podcast series. It’s me and my upper management talking about the projects we’re working on this day/week/month/year. Vladville articles are for the most part my general takes mixed in with some humor and other commercially inadequate concepts.

Before I explain what I’m up to allow me to put the whole consumerization concept into perspective. There is a reason big box manufacturers are struggling and that reason is often not discussed because it’s not commercially viable to a lot of people. It’s not just the cloud that is exterminating the dinosaurs of the IT age, or Apple alone for that matter. It’s not only Microsoft’s mismanagement and lack of focus, nor simply the  workload shifting onto mobile devices at a more rapid pace. It’s that the design parameters have changed:

Over time every point of the server grade equipment became mission critical. It also became so expensive that the tollerance for failure in a single box almost vanished. At the same time, the old .NET development model (who cares about the bloat, just tell them they need more resources) got displaced by something else.

Instead of buying a monster server with monster storage and a monster Oracle or Microsoft database that was licensed per processor, folks started using open source databases and spreading stuff over multiple systems once we didn’t have to design a single point of failure for the sake of hardware and software pricing savings.

If all of this makes no sense at all you’re understanding this perfectly!

For example, a storage server used to be a very beefy high end server with high end storage controller, storage controller battery backup, high end server case with redundant power connections and high end drives. And while we’re spending all this money, whats a few hundred or even thousand more to get high end drives – we can never afford for this stuff to crash! But then boom, up in smoke it all goes and we end up looking like idiots. To an extent, we are, because there are different ways to design storage when you focus on replication and plan for failure instead of hoping that the redundancy will make the failure go unnoticed with fast failover.

When you look at companies like Amazon, RackSpace, Facebook and even some of Microsoft’s public designs, there is no high end hardware in sight. It’s all commodity gear all constantly replicating and completely disposable at any point in time. It’s not turnkey by any means though, design of the software – from access to storage to backups and replication – all has to fit and be designed to deal with less than 99.999% and deliver even better results than that: with spikes in demand to boot!

Designing Shockey Monkey RMM Backends

Note: The title is highly misleading; We’re not making anything nearly as sophisticated as Level Platforms or Kaseya because we business owners aren’t going to start writing scripts – but they are going to want to know when the hard drive is about to blow up.

In order for Shockey Monkey RMM to work and for our RMM partners to fit into the Shockey Monkey model perfectly we need to be capable of processing an insane amount of data. Which ain’t gonna happen because Shockey Monkey is free. Just because it can be monitored doesn’t mean it needs to be logged and reported, just because it can be logged and reported doesn’t mean it’s relevant to anyone and just because it might be relevant doesn’t mean it needs to be accessible quickly.

Moderm RDBMS (SQL stuff like Microsoft, Oracle, MySQL, etc) are designed with the old school servers in mind – fast, redundant and fat. All the data you wish to keep gets recorded and accessed at roughly the same speed and similar medium which can be related, indexed and cross-referenced as necessary. Except.. well, read the paragraph above – there is far too much useless crap which may under certain circumstances become mission critical.

How do you design for something like that? Even if you go cheap and use free software like MySQL you have a limitation of roughly 10,000 tables under ext3 and performance tends to drop off well before that.

Event Proxy – Event proxy is a simple load balanced application that will look at all the data that is being fed from an RMM. Some of that data is relational (devices, alerts) and some is junk (software updates, application notifications, error context/data). The job of the event proxy is to look at the kind of data it’s being sent to it over the network and dump it to the correct data storage medium – some nodb, some mysql, some into plain text files. Yeah, we’re partying like it’s 1999.

Report Proxy - The reverse of the above. Once someone asks for relevant vs. junk data reassemble it back together.

Reverse Configuration – If you look at the RMM agents they tend to be pretty dumb and lightweight, most of the data intelligence and manipulation happens on the server. In order to make something free we’ll have to turn the tables on this. First, the agent will have to become a lot smarter in terms of interpreting the rules of what needs to be saved on the server and what could be saved on the client itself. By contrast, servers need to get better at tracking their agents and start pulling some data instead of just waiting for it. After all, the agents aren’t dumb by accident, you can’t make them be the biggest resource hog on the workstation, they need to stay lean.

What about the consumer?

Most people misunderstand the concept of consumerization.

It’s not about something being free, that’s a marketing gimmick.

It’s not about something being basic, that’s why there are so many apps that nobody ever downloads.

It’s all about what the consumer wants: Which is simplicity.

If the user has to think, follow directions and steps, calculate tradeoffs or consider alternatives.. all you’re doing is giving them reasons not to use your app.

This overcrowded, overpriced and overcomplicated industry can survive and thrive.

But in order to do so it must build the bridge between the users expectations (free and simple) and business demands (redundant and accountable).

Obviously, we’ve built Shockey Monkey to be that bridge. And it’s working.

Disclosure: This is a massive pitch. Please don’t misunderstand though, it is not meant to sell you or convince you – it’s a direction that I’m going in and if you’d like to hop onboard with me, you’re quite welcome. Enjoy.

…

We have just come out of a massive VAR extinction level event. Somewhere between automation, consumerization and overall technology just getting remarkably better and easier to use a large segment of the “IT business” population either got jobs or found a place in other industries. It used to be easy to make money, even if you didn’t like to market, sell, promote, manage people or even if you were not that great with technology and keeping up your skills. The easy money is gone.

With the easy money gone, companies that want to grow rapidly are finding it harder and harder to find qualified partners in a crowded field and reaching that next new partner is both expensive and logistically complex – they don’t attend shows and they aren’t just going to buy stuff for the sake of small incremental revenue: It has to fit the strategy and it has to impact the core business significantly to get promoted, sold, deployed and delivered over time. Without the ability to address a massive performance annoyance (spam, viruses, downtime) or critical business component (backups, failover, continuity) the solution sale and resistance (and effectively the cost) are more prolonged.

I knew this was coming. It’s why I wrote Shockey Monkey. It’s why I gave it away for free. It’s why we currently enjoy a rapid increase in the number of resellers and the level of activity across those resellers. Not just by showing the blueprint but by executing it ourselves. And you ought to listen to the folks that are actually making money and copy them. Wanna know why? Because the alternative sucks.

Just about everything else hasn’t worked. “You mean to tell me that the VARs that failed at the game are NOT the best people to tell me how to run my business? But they sold their business for nearly 3 times their monthly reoccurring revenue a month before barely making their payroll! I should ignore that?”

Yes, that’s exactly what I’m saying.

The traditional “from the trenches” expert panel of successful MSPs/VARs/Cloud managers is arguably less valuable to you in terms of advice because their model is being challenged by consumerization of the industry. Why should you sit around and listen to a conversation about desktop PC expertise when the tablets are taking over?

Really successful IT Solution Providers are at a junction point: Minimize spending and consider a sale or invest in expansion/transformation to a more consumer-oriented technology business. Considering the premiums that the market is dictating on the MSP businesses that have been acquired so far, most of your sub-$10,000,000 shops are going to transform.

Of course, my sales figures support that thesis What we are doing is not a coincidence or an experiment.

Where Shockey Monkey Fits In

When I launched Shockey Monkey I told everyone that it’s not a PSA. I still maintain that it’s an extension to a PSA model and it’s inherent design isn’t management of your business but the service delivery to your customer – portals, chat, remote access, invoicing and accounting, reporting – in the face of changing demand your customer service is more important to your business than the tech solutions.

Yes, you need a tool to manage the tech solutions. And I’ll give it to you for free.

You also need a system and partners – today we will be inviting many of them to the platform.

You see, the way software and hardware vendors currently market their solutions is by throwing messages out and hoping that they stick. When you walk by my booth at a trade show, I have a few seconds to get your attention. If you enter a drawing or a contest, it’s another opportunity. But it’s only an opportunity to pique your interest about what I can do for your business. I do not get to take you through the whole benefit of my solution. And quite frankly, for some solutions the business decision maker or sales guy or even the support manager may be the wrong person to talk to.

This is where Shockey Monkey, and advertising you will see in it, are fundamentally different. It’s not a game of impressions and hoping someone will click. It’s an annual campaign that can be updated daily. Shockey Monkey users will be working in the portal and seeing vendor messages – almost constantly – and have a clear idea of the value and benefits that are offered. This includes everyone from the lowest paid helpdesk admin to the highest-compensated partner who is only in there to see the quarterly sales figures.

This is a marketing approach that is both new and mutually beneficial for all of us. IT Solution Providers get a free portal experience that ties into virtually all the systems from the PSA (if you have one) to the accounting package to quoting package to the RMM and even your own web site. All brought to you by the vendors who want you to make them a part of your business. But do they get your business just because you clicked on their ad? In a way that we’ve implemented the marketing in Shockey Monkey, they win when you win – and it’s on them to show you how to grow and do so in an assisted, supported and illustrated way. We have a common goal here.

Over the next few blog posts I will go into details on how this will happen. Vendors, hardware and software, have very deep pockets but also very talented people and lots of insight into the industry. IT Solution Providers have the customer service, connections and willingness to do the implementation process.

It makes everyone more accountable. You can no longer overpromise, underdeliver and move on to the next sale – the dynamics of IT business have been flipped from large deals to smaller deals that are earned every month. In order for vendors to stay in partners toolbox they have to deliver every day of every month. In order for the IT Solution Providers not to be removed, they have to deliver far more value. Which means the cost of business is higher, margins are lower, and we’re racing to gain a larger market share.

Shockey Monkey is less of a tool and more of a platform to make this possible. Not only will we make those connections but we’ll turn them into a relationship that is connected at the service delivery.

The synergy of the two potentially turns every single one of us into IBM.

The vlad@vladville.com mailbox has been flooding for weeks with questions about Shockey Monkey & ExchangeDefender – good news, it means you guys are busy! I figure I’d open up the suggestion box a little and offer answers to any questions that are really on your mind about the MSP industry or IT industry in general, running an IT / software business or anything along those general terms.

No State of The Union Address

So many of you have asked for a “Big in 2012” post or podcast and I haven’t fulfilled that request because this year you get to write it. The economy is recovering, people are spending an incredible amount of money on the cloud services, reducing infrastructure and reducing technical complexity.

Exactly as predicted over the past few years.

So in my humble opinion, there is no “big” new thing that is coming. Things like mobility, cloud, working remotely, security and government compliance and the like have been discussed, documented and dare I say it, proven in the marketplace as overwhelming successful business models. So there really isn’t a magic new technology that you will be leveraging this year that you didn’t have access to last year.

This year is less about the vendors and tools and more about you and the implementation of those tools to keep on pushing your model forward.

This is the year for you to work in your business. I know, I know, there is great shame associated with working and being deeply involved in your business, talking with your clients, leading your teams and perfecting your business – but this is really the year to do it. It’s what will separate you from owning a long term business or being a defunct organization with it’s leader in search of employment.

So do the smart thing. Focus. Then do the work.

In the meantime, if you’ve got questions, I’ve got plenty of time and opinions that I’ll be sharing with you here and you can always look at www.LooksCloudy.com for the more elaborate discussion, podcasts, webinars and industry big picture stuff from the folks that make them.

Of note: Many of you have asked about Vlad’s MegaMSP which is a project I’ve discussed with only a handful of people. News spreads fast when you ask people not to share it I guess – I’ll discuss that next month after the ExchangeDefender Essentials is rolled out.