Archive for the 'IT Business' Category
I’ve certainly written my fair share about the RMMpocalypse and you’ve proportionately flooded my mailbox regarding the need for such a tool. I admit, the deadpool of the RMM consolidation is not in a significant way an indication of a dying MSP business – it’s just that the MSP business is transitioning towards the cloud and value proposition is well… what I’ve blogged about for years. At the same time we have an RMM-like product in the ExchangeDefender portfolio and I’ve gotten countless emails similar to this one:
“When can we have a conversation about the Unicorn? I know it’s not on the same level but you’re one of the last places left that actually cares about partners and I need a long term solution.”
So far I’ve declined all such calls because even though the Unicorn will get a major update this quarter, it is not going to be an RMM.
Community Service or Business
Vladville is community service.
User group presentations, community presentations, podcasts, etc are a form of community service.
ExchangeDefender is a business. Structurally speaking, it’s a software business – we spend a lot of money to build a solution and get paid over the long term. And long term business case for management of PCs and servers is bleak at best.
There are less and less MSPs.
There are more and more types of devices to manage.
Those are opposing forces that make a financial model for building an RMM platform extremely difficult. The worst part? That’s not the bad news.
The bad news isn’t in the fact that there are fewer people to sell the software to or the fact that it would cost more and more to produce a management platform that covers Windows, Mac, Android, Windows Phone, iOS, Blackberry (ha!).. No, the bad news is this:
Development of an RMM platform to centrally and neutrally manage devices is against the business model of OEM device makers who are less and less likely to open up the API to third parties that may eat into the potential profits.
Microsoft, Apple and Google do not want developers that marginalize their platforms. The major brokers – Verizon, AT&T, Sprint and every other mobile operator – want the service, warranty and management business. With the developer not allowing you access to the device and the carrier/provider fighting you for the service, where do you take the RMM platform?
This in fact is the reason you’ve seen what you’ve seen with the RMM industry – it’s not that it’s consolidating, it’s that it’s a feature with a large deployment base that will never get any bigger and it’s maximum value is what it’s worth right now + any additional business it can generate as a part of something bigger.
Come to Jesus Meeting
Guys, I love you. I do. I appreciate everyone that gives me money. Building an RMM solution would not be doing you a favor. If you want to hurt yourself there are more thrilling ways that will at least make you feel like a real man in the process:
Instead of spending time trying to figure out another RMM, another scripting language and another way to pursue the shrinking and more difficult market.. Please. Just stay with what you got, keep the money printing machine stuck in legacy mode and keep on cashing it in as long as the clients are willing to pay.
But if you’re going to put some time and effort into a major business initiative (like switching an RMM platform) for the love of god call me. Let’s work on something that is actually growing, creates additional ways to provide consulting and implementation revenue, let’s talk about something that the industry cannot get enough and let’s talk about the stuff that is positively impacting MSP opportunities.
Let’s talk about the cloud. Before your competition does. Your vendors are already bombarding your clients – profit from the momentum, don’t fight it.
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Another RMM & PSA business.. poof. Except this time they didn’t even bother putting up an elaborate lie about “becoming more competitive, better resources, nothing will change” – instead a hand written “Please flush twice” sign.
But hey, it wouldn’t be Dell if they didn’t class up the joint and find another way to kick the industry that should have passed it up a long time ago.
For the rest of the “barely breaking even, raising another round, Vlad you’re too harsh on VC, this is how real business works” crowd – you’re left out in the sun.
While printing virtual shares more worthless than the paper they are on is a good way to motivate employees too dumb to realize you’re not going public, the reality of business hasn’t changed much but the fundamentals are lost on many.
The reality of business hasn’t changed in 3700 years – ever since the Egyptians came up with the concept of zero – your business either made more or less than breakeven. And if you make less than 0 all the fancy BS is just lottery.
Meanwhile at the trade show
Step on up folks, step on up.. Get in tighter, who is feeling lucky tonight?
Find the vendor, find the vendor, find the RMM vendor that won’t be out of business next month!!!! Oooo, tough break! How about you sir, can you find the fastest dinosaur?
What the IT media at large is finding out is what people in the SMB IT have known for years – there is no future in automating what Microsoft and Apple are automating a deprecating away on their own. While these tools and MSP value concept was easy to explain in 2003 when stuff would go down all the time and needed constant surgery to keep spyware and viruses at bay, in 2013 – more than a decade later – that business model is worthless. Some people are just waking up to the fact that value propositions have to change over in order for value to be converted into profits.
People have poked fun at the so called apocalyptic writing on the wall for years on Vladville but let me ask you this: What is an antispam company worth in 2013? Don’t answer that yet. Now say you were an investor in such technology (that is rapidly marginalized and given away for free by virtually everyone) – would you be putting in more money in it or hoping someone dumb enough walks by with a bucket of cash and walks away with it before it’s completely worthless?
This is the cycle that the MSP vendor industry finds itself in right now. Too many single point solutions, too much debt, too little integration and business development that focuses on what businesses are actually buying.
While point solutions still have a place, and will still be sold, their competitive value has been marginalized by innovation and they can no longer stand on their own. For most of these things their best chance is to be lumped into something more cohesive or given to someone that can actually put a meaningful business model around them that can compel small businesses to buy it or sign up for it for free in order to sell more profitable, more popular solutions. You can’t take Shockey Monkey seriously because a version of it is free? I can’t take you seriously if you are too stupid to figure it out.
The game.. the business.. doesn’t change because the vendors cannot stay in business. But it changes all the time and if you refuse to change with it, all you’ll be left with is change.
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I’d honestly like to know. If you’d like to see why and what we’re doing (disclaimer: this is a vendor event skewed towards ExchangeDefender and what we do) feel free to join us.
In particular, when dealing with small business (not big/enterprise), I would like to know what are the key values of having a mail server on premise in the office. The following are my opinions on which key values used to be relevant that are no longer important (again, just my opinion, I don’t care if you disagree, I just care about the ones I am missing):
Issue of connectivity “Client has slow or unreliable connectivity, large attachments, etc” – Dismissed largely because Outlook in cached mode uses comparably the same amount of bandwidth as on-premise Exchange, if they are mailing large attachments around they should be shot, etc.
Issue of broadband “My village only has dialup Internet” – Fair point. That sucks but that’s not a growing opportunity for anyone to sell software or services into (except maybe an ISP)
Issue of security “Client only trusts their server if it’s in their office” – Gotcha, security through ignorance. Hope it’s not connected to the Internet.
Issue of legacy applications “LOB requires server A which requires CDO which only works on premise” – Legitimate but again, dinosaur.
When you dismiss all the old world psychological problems of comfort (it’s always been on-premise), paranoia (NSA is reading my email), LOB (our vendors have us bent over), hoarding (“realtime access to email from Internic in 1996 is business critical”), and voodoo economics (“on premise Exchange with my $350 / server + $50 / workstation MSP fee to keep it all together poorly is more affordable than the cloud)… what is left?
What else am I missing as a giant selling point of in-house mail services?
Compliance by submission – Anytime legal and accounting get involved in managing technical operations of a company you’re guaranteed two things: it’s going to be expensive and it’s not going to make any sense so you better just do what they ask. The challenge there is that you’ll take on the legal liability and assume all of it on your own while managing the whole nightmare as well. Compliance is big in the enterprise and even midmarket and we’re making a lot of $ on our ExchangeDefender Compliance product even in the SMB but it’s not cheap by any means.
Long Term Storage – Email has, for better and mostly for worse, become a defacto file storage locker for small businesses over the past two decades of crappy file server implementation failures. One thing that has remained consistently reliable has been the ability to just “email it to me” and companies (read: massive amount of unskilled labor only capable of doing it one way that will never ever ever change) have storage needs for email that transcend the IRS record keeping requirements or any technical recommendation any sane engineer would ever recommend. Where there is pain there are profits.
Trust – While many either trust or have no other option than to trust or simply do not care because they have nothing to hide.. corporate fiduciary responsibility at times calls for additional safeguards and measures to protect data that may be stored in the cloud. As people leverage cloud services more and more the amount of trust will have to grow which isn’t likely due to the government espionage, cloud service provider reliability shortcomings, cheaper and unproven cloud services, drive to shorten the release cycle of cloud services, etc. Eventually the ability to assure continuity of business meets the convenience of not being responsible for daily operations of the infrastructure and you have you CYA.
The problem, from experience, with the above 3 areas is that while they are all important and all relevant and all probably critical.. they tend to be a very hard sell. Small businesses have a hard time parting with money and at times assume greater risk for greater savings (only to be burned or outright put out of business at a later time, “but that won’t happen to me”)
Somewhere between the good reasons, good intentions and the right price there is an answer to the majority of small business mail concerns that the cloud alone cannot address. Microsoft has failed at this. Others have no incentive or interest in anything beyond the consumer (Google Drive, Skydrive, iCloud) and other commercial services are aimed at storage and large scale server imaging and redundancy (because it’s easy to sell those)
If you can think of anything that I’m missing, please let me know. email@example.com
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It’s been a busy week at ExchangeDefender so I’ve slacked off on Vladville. Gonna make it up right now: Many of you are new to Vladville (readership keeps on growing or the botnet keeps on spreading, not sure which) so I want you to take the following article in the proper context: I’m not a journalist, I’m (obviously) not a writer, I don’t spell check and this is just my opinion. I don’t get paid or get any pleasure in writing anything negative – think of it as a public service to get you to act/change.
I spend a lot of my nonexistent free time reading about history and economics. I spend the rest of the day with CNBC, BBC and other news channels humming in the background covering the world events.
What is going on in the world… is an outright crime. I am writing this because of what I’ve seen happen in Greece, what I’ve seen firsthand happen in Italy, France and England – what I’ve watched happen in Cyprus and finally.. what happened yesterday as Detroit filed for bankruptcy.
Times are changing and you have to as well.
Brief History of Employment
In the long long ago (prior to 1800’s) there were really only three industries: military, farming and whoring. Then, mostly thanks to the contributions of the Medici’s and Gutenberg, the renaissance and religious freedom paved the way for the industrial revolution and suddenly there were a lot more than three things people did for profit.
In the past 100 years we’ve had three incredible evolutions of a small business employee and in one way or another those are still present within the global workforce.
Indentured servitude (aka “Diet Slavery”), was pioneered by Henry Ford and to the present day it consists of pounding the willing employee within the last inch of their theoretical productive output: Think McDonalds employees, people that put together your iPads, etc.
Our parents, baby boomers, enjoyed a massive improvement thanks to the labor rights movement and held the belief that things would be provided fairly to those that work hard and maintain a strong work ethic. Be loyal to your company and get a pension. Invest in the corporate 401K, get promoted, get raises and live within your means.
Finally, the Google generation, grandsons of diet slavery and children of the unionized employees, the workforce with all the labor rights, none of the work ethic and no prospect brighter than the indentured servants of the industrial revolution. They don’t even know how bad they have it because the temporary abundance of free many, capital expansion and social benefits (ie: entitlements) are floating a large army of consultants, part timers, seasonal workers and project / stay at home employees. Reject hard work, reject traditional values and rules, embrace your creativity and flexibility.
Psychology of Motivating the Unmotivated
With each generation having an easier life and procreating exponentially faster than the previous, new generations of workers are bred to deliver less and expect more. With each new labor abuse comes a new labor right, the grass on the other side gets greener.
Eventually the sales, marketing and psychology research converged on the most efficient way to keep on moving the goal post of the American dream while still making it technically achievable in a watered down solution.
What if you could get the benefits of freedom without actually being free? What if you could enjoy the lifestyle of a rich person without actually being free? What if you could own things you can never mathematically be able to pay for if you agreed to pay far more for what it’s worth over 30 years?
What if you could get the sensation of being rich while you were really just drowning in the insurmountable debt?
Now if a person gets taken advantage in this way they are dismissed as idiots. Greedy.
But what happens when the whole country lives like this. The entire continent? The entire financial system?
What if the company you’ve given your whole life to gets bought out by investors who leverage it with debt and it goes down in flames burning your pension along with it while Mitt Romney and Chainsaw Al collect millions? It happens.
What if the bank you’ve put your money in buys the politicians that allow it to overleverage their deposits in a risky and complex credit default swaps scheme that comes inches within ruining the entire credit system – and nobody goes to jail? All the while Martha Stewart watches from a low security prison for selling a stock because her broker told her it was going to go down. It happened.
What if the whole country is so mismanaged that it cannot pay the pensions, salaries or even sustain the daily operations – and gets pushed around by other countries to drive it’s citizens into defacto poverty in order to get a loan? What if hard earned money just disappears, gets stolen and half of the continent falls into a deep depression? It’s happening.
When something so unfair goes on without punishment.. how do you make it fair so everyone can be reckless and unaccountable at the same time.
The American Dream
Jefferson believed that life, liberty and pursuit of happiness were the cornerstone of America. In fact these words were written on the 4th line of our Declaration of Independence.
Problem with this notion is that in free market capitalism few can become incredibly wealthy so long as many others accept living in poverty. But how do we get the poor from killing the rich? The American Dream.
Politics, Religion and freedom of choice.
Much of the present American Dream is work of incredibly smart and manipulative creative agencies from Madison Avenue in New York after WW2 who created this dream through television and entertainment. Everything from car leases to time shares to speculative investing owes it’s success to the decades of breeding psychology with marketing and worship of success.
In as little as 50 years we’ve gone from a country that celebrated hard work, dedication and pride of ownership to a society that celebrates inexplicable odds of success: Game shows, rappers, teen moms with sex tapes, illiterate athletes and college dropouts with venture capital backers are my generations examples of making it big.
The symbols of success: cars, gadgets, services.. are available to everyone so long as they can afford the bare minimum payment.
In a way, the American Dream is a social addiction that consumes the budget until all it’s left with is the indentured servant to a restructured, consolidated and refinanced loan. Where everyone gets a cut and the actual person doing the work barely gets by – where nobody feels sorry for them – and they creep in their petty minimum wage pace from day to day to the last syllable of recorded time. But they have their iPhone and their car and just enough to buy booze to distract themselves from the illusion they cannot wake up from.
This is not me being negative, in spite of Shakespeare: This is me begging you to understand what I’m about to say next.
World is unfair because you’re an a#%hole
I have these conversations with my employees a lot. While they obviously see it as needless lecturing and Vlad’s BS, it’s also hard for them to ignore the level of success and wealth I’ve built up by not following the herd. And to be honest, I care about the people that I work with far more than they’ll ever believe.
The issue of fairness comes up a lot.
Why am I being treated like a child? Because you act like one.
Why is he getting more than I am? Because he is worth more than you.
Work life is unfair. But perception of fairness is even more skewed. Everyone has their problems and complains front and center, while they only see the good life that others enjoy. The single biggest part of your inability to be happy actually comes from your inability to understand that others don’t have it that great either.
I run a bullshit-free business. People earn a salary which is significantly higher than the mean and they work hard. Everyone that works for me is issued an Android tablet to use for personal stuff (email, Pandora/Spotify, Facebook, etc). This is for the most part due to our SSAE16 compliance than anything else but the bottom line is that employees have a relatively liberal access to non-work stuff throughout the day. They are constantly on their phones or texting, music is always streaming, Pinterest and Songs With Friends accolades scroll through the day.
This happens and I understand it and I tolerate it because, again, we’re a bullshit free environment. They are expected to work incredibly hard in a stressful environment and they know that their thanks come in every two weeks on payday. There is no pie in the sky “we’re going public” payoff or a token check that comes when someone buys the business that will just kick them to the curb. There is no reliance on a government grant, no ridiculous delusions of grandeur with the next product that will make us overnight billionaires. So we take the good with the bad, hustle and get paid. More and more with each year.
This is far from a peaceful equilibrium though. Even though nobody thinks twice to ignore a personal call at work, they are very quick to point out how hard they work. Raises at review time are a matter of a right, not reward. Being told you’re late for work is met with resentment of being treated like a prisoner rather than apology for not being there for our clients when they call.
We’ve had people quit over this. At the same time, we’ve had people step up and do more work and produce more than they even thought was possible.
If you look hard enough, you will find people getting screwed and people getting rewards they don’t deserve.
And with this distraction preoccupying your daily life, you do not see the reality of who is truly screwing you: people you give your money to. From landlords, to the government to the electric, gas, insurance, health care and others the convenience is cutting deeper into the pocket and taking people that are relatively well off onto the edge of poverty. One brief moment of bad luck and the house of cards collapses.
The small business employee is under a terror which it hasn’t seen since the Hawthorne experiments at the center of the Great Depression. You can no longer trust your government to provide for you (look at what is happening in EU or even Detroit), you can not count on your pension when the investors push the company to Enron business models to meet expectations, you can not count on insurance or health care system which is unsustainable and you cannot even eat or drink the water that is being poisoned and genetically manipulated in the name of a greater profit.
Simply put: every American employee must become an entrepreneur, abolish the indulgences of the illusion of The American Dream and commit themselves to personal management of time, finances and health.
On Monday, after my employees skin me alive and burn me on top of the Ducati that sits in my office, please engrave the above on my tombstone. All my corporate life I strived to treat my employees and my clients fairly, at a great expense, and it pains me to see good people get taken advantage of. Worldwide. Take care of yourselves.
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As Eminem said:
Nobody wants to build servers no mo.
At least not in the SMB space. Those are facts, like them or not.
Unsurprisingly, The League of Extraordinarily Unreasonable IT Gentlemen begs to differ. (you’ll have to scroll down to read the comment).
Inside The Mind Of an IT Innovator
First, let me explain what it’s like to work at a company (software|hardware) that has to innovate in order to stay alive. Companies like Google, Microsoft, Apple, Oracle, etc cannot constantly pump out the same crap that they have put out in the past because they need to give their clients more reasons to spend a premium amount of their IT budget getting the new version. For example:
I know your clients love Windows XP. Office 2003 is as close to perfect as it gets.
But someone at Microsoft had to break all that. They introduced the dreaded ribbon. Oh. My. God. The traffic lights started flashing faster, people got in accidents, millions of people died and.. Woops, sorry, my bad, got carried away there, you kind of have to be on heroin to make the pro argument for legacy software.
Fact is, the functionality available in Office 2003 can now be delivered by dozens of their competitors. And people aren’t going to pay $300+ / user for something they can get for far less or even for free. So Microsoft introduces the ribbon, the metro, the tile – and people buy it.
It’s not perfect.
None of the new technology, historically, has been a slam dunk.
But this is the difference between the IT consulting professors and people that are in charge of building new technologies: We do not give up just because something isn’t perfect. We don’t just change stuff for sake of better scenery, we do it because of customer demand and because that is what we see as needed.
Guide To Complaining About Innovation
Now back to Bob.
On behalf of the product manager in charge of Visio, I am sorry that the Visio experience on a touchscreen isn’t the same as the one on a 60 pound desktop with two monitors. But Bob, can we just agree to disagree? How about I as a Vision product manager agree that the experience is not great right now and we don’t just scrap the multi billion dollar industry that is jointly heading towards putting more stuff in your hand and pocket and less on your desk, under your desk. I’ll see your imaginary lawsuits and match them with my imaginary (however more realistic) likelyhood that the technology that fits in your hand and pocket will eventually catch up.
The same Bob-ish arguments were used against every major technological advancement in the past two decades. My clients won’t look at the cloud, the state of broadband is just not where we can use hosted applications. Companies like Google and Microsoft and Apple and Verizon and Comcast and.. don’t sit back and cry for your Courier modem, they try to figure out how to make fiber cheaper and wireless more accessible.
Innovative companies do not sit around trying to help you maintain a more profitable status quo. They use disruption and innovation to collect a premium for their products and services.
Same Bob argument was used against smartphones. Except it was a Vlad argument, when doing the initial review of the iPhone: “I do not see this thing as something that could be used for any serious work” – I said that the first time I played with the iPhone. I am glad Steve Jobs didn’t quit when he read my review.
Which brings me to the guide to complaining:
1. Never speak from the position of authority. This is going to sting, but I’m pretty sure that Microsoft spends more for the staples used to hold their research reports together than you’ll earn in a 100 years. If you want to be taken seriously, communicate the feedback from your limited set of clients without pretending you know more than their research.
2. Do not use the present/past to fight against the future progress. Just because you cannot imagine how a tablet would be a great tool for architects, inspectors, designers, engineers and other professionals to make slight adjustments and demonstrations in the field because the technology as it is right now isn’t perfect for it, doesn’t mean that we cannot strive for it. Remember, what we work for won’t be around for a little while.
3. Do not argue with little data sets. Just because you cannot get a business connection of more than 1Mbit in some remote village does not mean you can invalidate the entire industry of stuff done online. Just like you cannot understand why big companies cannot extrapolate your little data set to make them understand they need to work on little edge cases, they cannot understand how your remote village cannot have faster Internet connections.
4. Do not fight progress. Technological advancement is inevitable. IT is no longer a geek profession, it’s a business profession and even if your argument is technically correct, the guy making the ultimate decision up top is more like Steve Ballmer than an engineer. Make your fight about money: “I have x clients that have y budget to spend and they cannot go to your product z. How can we continue to make money from them?” The reality of Microsoft’s massacre of SBS is that they saw the marketplace as shrinking and the # of users who didn’t want to spend money on IT was not going to pay for the continued development of a dinosaur.
I am nowhere near the level of Microsoft, let me just say that.
But I work with people all over the world and, given our size, we can act on the feedback much faster than others. So when I talk to my partners – many of whom are SBSers – they don’t have their head in the sand wishing Exchange would come back to their clients officer – they are smart business people. They, like their Microsoft millionaire brotherin, have the same business concerns of how do we adapt the new technology that is coming down the pipeline to serve our clients.
With all undue respect, the obstructionists that want to fight technology need to sit down because you’re giving all of small business IT a bad name.
Small businesses are frugal, yes, but they still have smart phones, broadband, multiple offices, temporary employees and facility challenges that big companies do. Stop portraying them like isolated backwoods technology haters who have no Internet connection and cannot read a screen smaller than 15” – if that’s your client base then you just have a crappy client base. Not every small business is building an SBS server with parts off eBay to save $20 and then end up with a nightmare business down scenario that takes you hours to put them back together.
Tons of small business IT folks make money with the cloud. And mobility. And consulting. And yes, even building workstations. But none of us are looking to stay in the past… this is a terrible industry to try that in.
Focus on the positives. Or move on as industry passes you by.
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Interesting times in the MSP industry. If you’re paying attention it seems that the MSP industry these days is more about the mismanaged MSP vendors than the MSP companies that make up their rapidly disgruntled client base. I had a conversation earlier today that inspired this post so I hope you enjoy it.
Hey buddy, I’ll trade you this half eaten sandwich for your MSP platform
You know we’re in hard times when the guy giving up the sandwich is getting a bad deal! How could these companies possibly be worth so little and have so few prospects that they are crumbled down and scraped down to the bare guts of the client list – and not just with one company!
The answer is ridiculously simple: They are lying.
“We believe that the best times are ahead and that this move was in the best interest of _____ and the new company some great plans for it and nothing will change.”
Then within a month later all the key personnel is gone, all the people who have formed relationships with service providers over the years are either gone or fired and the most senior guy you recognize on the roster is an MSP failure / would-be-expert-speaker working as a part time contractor?
Truth hurts. But it hurts more when it’s wrapped in deception hoping people won’t figure out the bullshit story. Yes, you can pay a MSP news site to pretend to be “checking on the status of the investment” while it’s employees move into the building and put up their sign, you can parade new management and pretend like lots of new stuff is going on but they can be as tight lipped as they want to be about what is going on but when all the management and key personnel is gone everyone can tell what’s going on.
I’ve blogged about this before, it is not a true representation of what is going on in the industry. This is just what happens with Venture Capital and investors. Investors and VC don’t care about the software, about the client or about the solution beyond the dollars and cents. They aren’t buying a solution to make your (clients) life easier, they are buying it to make it more profitable. You don’t become more profitable the more complete the solution becomes or with better reports – you become more profitable when more @#% is pushed down your throat hard enough that your wallet pops out of your pocket. That’s the reality.
It’s not that the MSPs are doomed..
It’s that the investors backing these vapor businesses are hungry for profits and they have no problem at all sending them down the meat grinder. Everyone is happy on the way up, nobody likes the splatter on the floor when things head south.
If you really want to piss off a bunch of people..
Buy an RMM company, roll it up with another solution (whatever is popular and hardware-centric, let’s say a BDR business) and give the damn thing away for free.
No catches, no requirements, just here you go “a gift from us to you, please check out all this other wonderful stuff we do”
It works. Shockey Monkey almost singlehandedly launched our cloud initiatives and got ExchangeDefender to a level I never could have afforded through traditional marketing and trade shows. And because other PSAs didn’t want to play ball, it built up an audience of thousands of MSPs, some that moved to Shockey Monkey Pro and will likely never consider a more comprehensive solution. Not part of the agenda, more a collateral damage – but the tide lifted all the other stuff we did almost simultaneously.
Here is the thing about the RMMs – many MSPs already are and many more will soon be looking for another place to go. It’s not the MSPs that got mismanaged – their vendors were. And those MSPs will need a solution they can build their business up on and not worry when it’s going to be subject of the next takeover, IPO or other cost-cutting initiative.
One of the things I love about Google is how well their services play together. But Google also has no heart when it comes to cutting even profitable things – they are quick to kill things that don’t make material change – they are the anti-Microsoft in a way, they don’t let stuff bleed. While that’s awesome from a business management perspective, if you love Google Reader, Latitude… or more closely – your RMM, backup, antispam, hosting, BDR, security, monitoring, quoting, etc tool… it’s going to sting. If you go with something smaller, you’re dealing with a tool that may not be very well integrated. If you’re going with something bigger that is a part of a bigger solution then you risk your product simply being marginalized or maintained less and less as the company cannot justify the R&D if it cannot turn up more bodies for their product.
So here are some questions for MSPs to consider:
1. Does mismanagement of the MSP vendors translate into mismanagement of the MSP? Namely, just because your vendors are struggling does it mean that you are doing less and less MSP business or that you have less competition out there because the barriers to entry are higher?
2. Should you focus on finding a new RMM platform because Rome is burning… or should you focus on documenting your business better so that when more of your vendors jump the shark replacement is less painful?
3. If you can’t answer #1 and #2, don’t worry. You can still be an MSP Coach.
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I was chatting with a friend the other day about the typical regrets, wishes, hopes and so on when it comes to work satisfaction. I kind of approach this from a different angle because I mostly see my value / success / failure not in what I have (because I have a lot) but what I’ve been able to help others accomplish.
So here it goes:
Biggest Failure: Inability to convince enough people early enough to go to the cloud. It’s heart breaking to watch so many people close up shop or be fired because Microsoft (and to a smaller degree Google) took their clients. The number of “Hey, my client talked to Microsoft about Office 365 and…” calls has been larger than I’d like to admit and I wish I could have made a better argument, business scenario, profit scenario that would have lead people down the right path. Even after all these years I don’t quite know what to say because I’m confronted with daily “We just sell Office 365” and also daily “Yeah, Microsoft is putting us out of business” to the extent that there is no way to phrase “You are naïve and it’s just a matter of time” in a way to get people to take things seriously.
Biggest Success: Stopped arguing with idiots. I don’t mean just deleting the Yahoo / SMB / MVP accounts in a single click – I mean stopping the argument with the biggest idiot… myself. Overcoming the ego issue of having the single good answer is probably what has lead to most of the success. Embracing failure and not being afraid to fail has made the successful projects amazing while minimizing the stupid loss leaders. Once I figured out how to sleep at night without worrying whether <insert very large bet here> is going to be a winner or a loser, I no longer had to win arguments with myself over whether we keep things going or whether we move on. Being able to build a business on numbers as opposed to the right strategy has been the biggest change in MO since ‘06/’07.
Biggest Surprise: How fast things are happening.
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No, not talking about Microsoft killing the TechNet subscription service – and ultimately signaling the end of life for IT Professionals who aren’t Developers – but the career in technology that involves managing servers, services, switches, hardware, software and so on.. you can usually gauge the direction and demand by looking at who is hiring.
One of my friends from South California asked me if I knew someone that was hiring. South California, isn’t that the heaven for IT employees?
Doesn’t seem like it.. I have been searching for companies but all I can find is small time want to be businesses with 5 or less employees.. (kinda done with them)
Not to mention it seems like more and more companies want you to be a slave to them working 60 Hours a week…
The following (and the next post) is my attempt at social commentary. If you don’t hate me yet, you probably will by the time you read this.
So about that life balance thing..
Yet, this is reality even at our humble little IT business – we aren’t looking for people who are focused on quality of life. We are looking for people that are looking for a career.
Career, our definition, isn’t about being a workaholic but it is about dedication to your craft well beyond the hours you punch in/out on. This is the reality of our business.. of a technology business.. that the technology is moving faster than education, labs and quality control can. With a more rapid release cycle and multiple layers of redundancy failure is just another number and the focus is on delivering a solution – not building one and leaving it alone for X number of years.
And as I tell my employees all the time: I’d rather pay fewer of you more than have more of you making less.
And it’s moving faster and faster.
If even as late as 2010 you would have told me that I’d have to build Blackberry or Windows Phone versions of our software I wouldn’t have believed you.
Moreover, I probably would have punched you.
Yet, here I am, in the future, dictated by the open web and HTML5 and.. yeah, building native apps for one @#% platform after another.
The reality of IT is that it’s both going extinct at the lower level and becoming an engineering role at the top. Where does that leave a skilled IT professional who is not constantly immersed in virtual, cloud, legacy and migration projects and platforms on a daily basis? A dinosaur after a year.
So about that job..
Knowledge of a single platform used to be enough. Heck, great living used to be made being familiar with a single product – in the early 2000’s you could collect decent 6 figures just by being a DBA.
Today? Good luck finding that job. Yes, there is still that one job out there managing some cryptic legacy stuff running on the AS/400 and the next opening will be up as soon as the dude who has that job dies or wins the lottery.
What used to scream as the lack of expertise is now an ideal candidate. If you had a ton of stuff on your resume a few years ago it meant that you were never trusted with anything significant for long enough to establish a specialty. Today your specialty is pretty much obsolete by the time you’re hired at the next job – and companies look for people with skills in variety of areas and clear ability to solve problems and pick up new platforms fast.
IT as a career.. more like IT as a lifestyle.
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Every now and then I write a blog post that just digs me further into the ground. While I generally tend to ignore the negative nastygrams that come as a result of it (perception is perception, if you misread something and took it the wrong way then it’s kind of your problem not mine) but with the amount of legitimate, sincere messages questioning the MSP model.. I thought I’d explain what I meant.
Are the RMM takeovers evidence that the MSP model is dying?
Yes. The fact that these guys couldn’t grow fast enough to secure more funding or expected rate of return their investors had clearly indicates that the either the appetite for RMM tools is not as strong as many believed or that there are fewer things to manage. Probably both.
No. It does not mean that the MSP businesses are doomed just because one of the suppliers happens to be struggling. Not just that but there is no firm direct evidence that these guys were struggling at all. They could have been growing. The skepticism was over whether they were growing fast enough or what their future potential may have been.
So it’s clearly a yes or no question. The elaborate answer is that the dynamics of managed services providers have evolved away from alert-jockey IT guys into solution-based service providers. In fact, when I talk to my largest and most successful partners rarely do conversations dwell on bugs, Windows releases, patch cycles or best remote tools. When the business is about the technology and business and not about the process of laying bricks, the premium (read: vendor profit margins) take a hit and people move money elsewhere.
Are the PSA takeovers next?
Not sure why everyone is so concerned about this.
Again, not a yes and no kind of a question. As I hinted about GFI and as Dell, Quest, etc, etc, etc have done – helpdesk is a critical part of an overall IT solution and there will always be activity surrounding that. Whether that means that ConnectWise or Autotask or Tigerpaw will be bought tomorrow I don’t know but you can ask them – as far as Shockey Monkey goes, there is nothing on the horizon (6-12 months out) for us in terms of M&A or fund raising or VC (so please stop calling ffs)
What does this mean for my RMM?
In the short term, probably nothing.
In the long term, change is a part of every platform and you’ll have plenty of time to switch to something else if you see that the product performance, integration, support and other issues creep up.
I think the response or outburst of concerns and questions has more to do with the speed at which the M&A has taken place over the last month than anything structurally wrong with the industry. The simplest way to sum this up is:
Big boys with big bank accounts need to produce big returns.
Does the Unicorn become an RMM now?
Oh boy. No, ExchangeDefender Business Monitoring aka Unicorn is not going to be an RMM and it’s not an RMM.
As I have said throughout the whole development and current evolution of the Unicorn, we are building something that is meant to deal with the true endpoint – the user – not the damn PC. The PC or tablet or phone or netbook or notebook or ultrabook or a smart watch is simply a tool that a user uses to do something.
To a business owner it matters far more what the user does with the technology than how that technology is doing.
True story, few years ago when we talked to all the PSA and IT folks about upcoming release of Shockey Monkey, everyone (without a miss) told us we should build a free RMM first because that’s what people were far more likely to install and use. They were probably right. But funny thing happened when I called my top partners and friends in the industry: “Hey, how come you don’t install all your unused CALs on clients desktops and stuff?” and the same response came back over and over and over again: “Because nobody gives a @#% about the PC, they only care about the server”
Not sure if I’ve ever mentioned this (kidding, I’ve mentioned it over a million times) but you always always always go with what your clients demand.
So no, no plans for an RMM. The new release is in the works though.
Will the RMM M&A lead to M&A in other vendor or MSP businesses?
M&A exists separately from the technology business.
Quite simply, M&A is more of a game of numbers than it is a game of building a technology company. If you’ve ever sat down with a VC or investment banker or a private investment rollup person… they don’t sit down and start talking about how awesome integration between different products is going to make each one of them more appealing and how the marketplace is demanding a more unified solution or..
No, they sit down with a highlighter, marker and a red pen and start crossing stuff off the list and diving through profiles and projections. They look at all the places selling widget A and try to figure out how much widget B would be worth if it were sold alongside.
The game is valuation and potential sellthrough, crossover and ultimately synergy that leads to cost reduction.
Also keep in mind that most of the buyouts are not leveraged by the side that has no power. What I mean by that is that very few businesses that get bought out get to dictate the rules and terms – they are mismanaged, in debt, riddled with mistakes and problems. For most, this way out was the only way out. Be that as it may, it is not a representation of a business model but a portrait of a failed business execution.
MSPs will buy other MSPs – much the same way that sandwich shops will buy other sandwich shops. Businesses are for sale.
But does a shrinking MSP toolset vendor selection list actually and precisely reflect the shrinking pool of MSPs? To an extent yes because more successful MSPs don’t use MSP tools when they grow big and MSPs that are differentiating to the cloud and other technology aren’t buying RMMs. But then again, we aren’t in 2003. We aren’t a single Internet connection, single server, single PC world anymore – so those things happen to lose importance. It’s a matter of evolution of technology, not an extinction event driven by less choice when it comes to IT vendors.
“I hate change.. nobody cares about the IT guys anymore”
Truth is, IT guys care about the IT vendors just as much. If the MSPs were so loyal to their vendors than no vendor would ever have to pursue an M&A strategy, they would just stick to their business plan and make their partners stronger and stronger and stronger.
But that’s a fantasy. The reality is that everything and everyone is for sale – heck, you can even buy a peer group of independent MSPs and force them to use your tools.
The reality is that our industry is that of change. I recently spoke in England how MSPs (and VARs and IT Solution Providers) need to forget about the business of technology and be the business of not just embracing but championing change in technology. For it’s that change of technology and constant cycling of tech that keeps the business more efficient and more competitive that ultimately drives billable time, solution building and business growth.
If you’re really happy about what you do today and you consider it a lifestyle business and don’t want it to change then you better throw all your clocks in the freezer because your odds of having a growing IT business that doesn’t change is about as good as your ability to freeze time. (P.S. Don’t do this, you’ll just ruin a perfectly good clock)
For some reason, lots of people are depressed and downed by this. I feel pretty damn excited about what is next. Please feel free to scroll down through the past 8 years of Vladville, damn near everything I write about here is about change. Some people have a personal bias and perspective that makes them feel like everything they read here is about beating up on a poor little IT business – but that is why perspective matters: It’s not about you, it’s about the industry.
You either live in it or it kills you.
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May we live in interesting times.
It’s important to know what the mission of the business happens to be. Yes, the purpose of every business at it’s core is to generate the profits and act in the best interest of it’s shareholders. However beyond the business dictionary of what defines a business there are people other than the shareholders: there are also stake holders, employees, customers, vendors and community at large which has a vested interest in what that business exists for and what it’s overall contribution to the society is. Beyond just printing money. If you own or work in a business, or interact with one as a client – you likely have many alternatives – so at some point it’s not really all about the money (unless you’ve got a Groupon, then everything changes)
Then there are investors. Investors, for better or worse, have no emotional, sentimental, ethical or even business responsibility to consider the business they invest in beyond their own expected rate of return. And whether you like it or not, once you take other peoples money you work for someone new.
In the past month, nAble, Kaseya, LPI and another platform not yet announced has been “bought”; GFI will shortly be announcing a helpdesk/PSA platform purchase.
And my vladville.com inbox is damn near full of petrified MSPs who are wondering what the heck is going on. Allow me to dumb it down.
I have lots of friends and lots of respect for the people that work(ed) for the RMM companies stated above. I wish them all tons of luck. And while many that have emailed me had asked if I was about to do a victory dance about yet another thing that I was right about (consumerization leading to lower growth leading to consolidation) to assume that I take any pleasure in this or that I’m a journalist is a fundamental misunderstanding of what Vladville is and who I happen to be (or what I actually do for a living). But that’s another rant.
So, if you’ll indulge me and allow me to entertain you with my worthless college education, here is how the business works: You have a brilliant idea and you start working on it and it proves to be successful and you’re selling it but you just need more of everything. Banks don’t look kindly on new startups so you pitch it to third parties that want to make their cash grow. You take on investors (angels) and your business grows. In size, scope, complexity and yes revenue. Your investors are not impatient or short term focused, they tend not to get super involved in your business and the have relatively little riding on you. Then you get bigger and bigger and bigger and bigger and through series of rounds you raise more money and prove your product or service on a bigger and bigger scale.
Now you need a LOT of money. And the folks who have a LOT of money to give have a lot of requirements, expectations and involvement. They have no heart, no soul, no motive other than to make your company explode onto the wall street – not because they are bad people, but because their business is managing someone elses money and delivering returns. Their business is not RMM, their business is taking $1,000,000 from Bob and returning $1,100,000 over X amount of time or they get fired. Their incentives are different and their expectations are very clear.
So you take the wrong pill.
You commit to growing and growing and growing… and maybe you do and maybe you don’t. But when you don’t, you no longer get to call the shots, manage risk or make long term strategic changes – you no longer own a business, you report to your investors. And sometimes those investors just want to get out.
If you think that is ugly, consider what happens to great companies who get rolled up with others, loaded with massive amounts of debt, get their perks, benefits and community initiatives cut while the organization is overleveraged, loaded up with debt and left to die.
You are in business of making money. The only question left to answer is at what cost?
Addressing Your Concerns
I need you to quickly forget the previous section.
Every merger, acquisition or takeover starts with the announcement that “our best days are ahead of us” and that there will be no changes, business as usual.
Now, unless you’re a complete idiot, you might want to ask how the best days can be ahead of you with no changes and why you’d have to sell anything anyhow. But enough about the semantics of the English language and common sense, this is M&A.
And to the point of many concerned folks – I don’t think you have much to worry about.
The companies that got bought out simply peaked in their ability to grow. That is because the service providers that they served have peaked in their ability or willingness to grow – and the top level of service providers is using enterprise level tools not MSP level tools. So I don’t think any of the acquired folks made massive strategic mistakes – their investors probably wanted them to grow faster or get out and they either got into the mix where they can grow rapidly or the latest round of investors had to cash out.
Those are the breaks.
That is business.
Those are the decisions that the big boys have to make and that is the challenge of maintaining the correct perspective in what you do, what your values are and what your organization and business are truly about. Because when the game becomes about the money and money alone, it’s just a matter of who can hit the highest score before they die. Nothing wrong with that, nothing new or strange about it, it’s just not for everyone.
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