Archive for the 'IT Business' Category
One of the more annoying themes in IT is the lack of understanding that anything valuable and complex takes time. We recently launched a new service at work and I’ve spent the past month on the phone talking to people and discussing some common problems and issues we have with the business / people and the fallacy of impatience.
I need huge margins and immediate results. I understand, I need to lose 50lb in one day but the only way for that to happen is if I chainsaw myself in half. Nobody wants to clean that up – and I’m pretty sure it would be less of a legal challenge than if you took that chainsaw to your clients Exchange server. Yet many people want to do just that. Ain’t nobody got time moment.
Since this is likely to only be valuable to people that don’t have a long attention span I’ll make it quick: Nothing good happens fast. If you have no experience and you think you can fix a problem in a split second because everyone around you is an idiot, grab a buddy – use them as a human shield when you earn your “experience” and something blows up.
When it comes to complex issues, particularly the ones involving the cloud and infrastructure / process shift, it takes time. You won’t be a millionaire by the end of the week. Or month. Or a year. But that doesn’t mean you just turn your back to it and wait for it to errode you out of business – ask all the Geeksquad MSPs how well they are doing next time you visit them at Target, Car Max or another IT vendor job – ignorance is not a business model. It takes time to build, promote, sell, implement and sustain a new business line or a new product and if you’re just hoping to find that next “set it and forget it” piece of IT then it’s going to be a rough winter.
I have (a lot of) projects that fail. I don’t want to give you an impression that I have any magic solution to failing, just my process for handling failure.
1. It starts with planning. All new ideas come with plans, tracks, stages, estimates, priorities, outcomes, scenarios and so forth. Most crackheaded ideas don’t even see the light of day.
2. It’s sustained through monitoring. You have to stay on top of your plans and you have to keep on checking how things are going. Everyone at every level of management will tell you that their reports are task avoidance ninjas, trained in the art of avoiding any hard prolonged work. Quick bursts of output, no problem. Repetitive mindless droning, got it. Six week project with deliverables, unknowns, research, etc – it’s due in six weeks, right? We’ll worry about it in 5, I’m stalking something on eBay. If you aren’t paying attention to your business nobody else is.
3. It lives and dies through evaluation and persistence. How is the plan progressing? Has anything changed? Do we make changes or push forward?
Ineffective people fall on the opposite parts of the spectrum: They either get consumed in their projects and never get anything done and don’t know how to quit… or they quit at the first problem they encounter and don’t give their projects enough time to develop.
I want it all and I want it now. But I don’t want to take the time to get there and I don’t want it to require hard work. Who am I to say you can’t dream?
But waking up in the IT services landscape we have today paints a picture of ridiculously complex and overpriced infrastructure that never lived up to it’s billing, competing with a cloud infrastructure that is seemingly free and easy but it’s really neither. The challenge of bridging the two for a business is a difficult, painstaking and process oriented task that will be neither easy nor quick. And that’s your job. Embrace it, take it and build a business around it.
Or look at the alternative: It is quick and easy and nobody needs you. Your call.
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While we haven’t yet officially announced the biggest thing we have on deck this year (because we want to talk to our partners about it first and there are many of you and most of you don’t pick up the @#%@ phone) the details of things that are coming along with it are starting to pop up as is the usual partner chatter and the never-ending bitching from my competitors who just can’t get enough of my missteps to make it seem like “we’re not listening to our partners”.
But you know what.. record numbers came in again. Record month, record quarter, record year. And I didn’t have to suck Arnie’s dick for it.
So with all due respect, kiss my ass.
Now that we have the pleasantries out of the way..
Let’s discuss something that has been on my mind all year and that is the subject of vendor responsibility and the right fit for the MSP.
Which in itself is a mindfucking misnomer because the job-hopping channel chiefs seem to be in consensus that all MSPs are pretty much the same and (if you kind of squint on their PSA/RMM/BDR choices). And as 100% of my former employees who knew how to run my business better than I do while being completely incompetent at the task they were given, I am going to offer some fucktastic advice for you to ignore as you try to decode the fountain of channel chief bullshit being spewed at a smaller and less occupied side room
To a vendor, you the MSP are the channel. That faceless, mindless, numbfuck ninja that can get past the executive gatekeeper / IT guy in charge through your cunning use of body odor and Gilden cotton shirt with a BBQ stain on it.
As the channel chief looks down on you from their elevated stool the airport Hilton facilities guy stole from the bar, s/he
(let’s not be sexist here, tits are tits) thinks the following:
What the fuck have I done wrong in the life to be stuck here??? I guess this is better than being back at home with the wife that hates me or the office that I can’t stand but how much longer can I keep up this shit show of having these idiots fail at selling my shitty half baked solution till the last of these morons gets a real job? What the fuck do I tell them?
I am here to help you make more money.
Sell this shit right here, your clients can’t get enough of it, your business needs more revenues.
And friends, they aren’t that wrong: The typical MSP is just an animal that needs to be optimized for a maximum sell-through. The only problem is that the animal farm MSP they think they are talking through/about died last decade. You can’t get people to sell more shit because the end user got a lot smarter and more informed while the MSPs diversified far from their RMM-watching days.
The industry got better. To be more specific: The part of the old VAR/MSP industry that thrived looks nothing like that stereotypical case-study guy that’s at every IT roadshow talking to you.. because he wants a job!
MSP / VAR / ITSP Perspective
You’ve heard the same sales pitches about the same crap a million times before. The only thing that has changed is the logo.
The reality of the MSP marketplace is that it matured in a way that many didn’t want it to – instead of the “come to your friendly local MSP pawn shop, we’ll sell you yesterdays technology at last decades price” – the smart people ignored “Just do anything for money and sell all of our shit because we came up with this cool 3D poster” and instead specialized in different things. Some went into health care, some into legal, some into VoIP and communications, some into mobile, some into…
This is infuriating to a software/hardware/solutions business that no longer has your complete and undivided attention and a cookie cutter mass sellthrough solution is no longer appealing.
The coming age of conflict, as has come up in many of my conversations with service providers over the past few months, is in the realization by the vendors that they will have to do a lot more work to remain a relevant piece of the puzzle because you have diversified your business away from what was traditionally seen as IT.
The traditional IT got commoditized by the MSPs (remember how we pulled the plug on the in house IT employees last decade) and the workstations/servers are rapidly becoming commoditized by the cloud and mobile devices. With less gadgets to monitor and patch you have to move up the food chain.
This natural evolution of our business has a casualty: the incentive to do the hard, ugly, difficult and messy “must not impact business operations during business hours” job is now not the primary revenue driver for most small business IT providers.
Simply put: The vendor community has a much higher incentive to do the hard work than your typical service provider who frankly isn’t interested in making cents on the dollar and is chasing 3 digits rates per hour.
Not everyone has received this memo yet. Hence the bitterness and misplaced anger.
The future of MSPs, just to arrogantly pile you under the same convenient panel moniker, is in working with vendors who effectively supplement the business model to eliminate headaches or boost profit margins. With the traditional IT becoming a commodity, this business is no longer about maximizing revenues “to keep your lights on through the effective use of an RMM platform that” – it’s about finding people who will do as little or as much work as needed to get the solution implemented. Smart and profitable MSPs are diversifying away from being the provider of the commodity service and are positioning themselves as the expert part of the overall solution. You’re just no longer dumb enough to be the conduit for it all that assumes the most liability while getting the least margin in return.
The vendor community now has to bend itself to fit into the MSP / IT Solution Provider business model and do so in different ways (branded, white label, full service, licensing only, software with support contracts; because different MSPs will rely on the same vendor for the same product at a different level of involvement depending on the client, business maturity, other business projects and opportunities, hiring cycle, etc)
Good for you. The line between solution providers and vendors is blurring. Which yes, brings some competition & friction, but elevates service levels and brings the common interest closer to the top.
As for the swag dispenser road shows.. Well, I don’t want to say anything rude.
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A little bit on strategery here just so we’re smoking the same stuff..
Today we announced the Android native application for Shockey Monkey:
It’s joining native applications on iPhone and iPad – none of that webkit / slow junk anymore, we’re spending a lot of time expanding the mobile offering very quickly and I thought I’d offer you some perspective as to why in case you haven’t figured it out yet.
As you’ve seen by our ExchangeDefender business model, things are growing very rapidly and we are expanding our solution portfolio in a manner that we believe will allow our partners to grow exponentially.
The launch of branded support and branded migration services removes the “human” “tech” factor involved in service delivery, it basically allows the solution provider to not be a salesman and a plumber at the same time. Everyone wants the salesman salary, nobody wants the sanitary waste mess on their hands that comes from supporting someone elses product/service or the solution. At the same time, there are no shortcuts – someone still has to do the work, the tools are still necessary to fall back on if “best case scenario” doesn’t work out and… well, I wish I had more developers and I wish I could take on more business but we’re moving as fast as possible with the resources we’ve got and we’re trying to do it right instead of doing it quick.
So what you are seeing with the agenda of Shockey Monkey and ExchangeDefender – with the fascination with mobility and the fascination with the remote access/management with Unicorn 2 and focus on storage with LocalCloud – is a convergence of the stuff we know works and stuff our clients and partners are begging us for.
This tends to piss people off. I’m sorry. I’m really sorry. I know that you’d rather see us focus on the legacy stuff and you’d rather optimize the heck out of the old way of doing things… but my business model is very simple: I do what people are willing to pay for. And the cold hard ugly truth is that people are not willing to pay the top dollar for minor enhancements of stuff they already have that works for them.
They want a solution that dramatically improves their efficiency.
While a tweak or two to the desktop or web experience is always on a to-do list, I’m getting hounded day and night to support mobile devices because high profile (read: employees in organizations in charge of spending money) are not walking around with laptops.
While a solution to a gaping hole in the portfolio might make some of my partners more entrenched with a client… the ability to offer migrations, support, new solutions and not having to do any of the hard work to get it – will grow your business, not just make it stickier until the client pulls the plug.
I understand that there is a conflict. There is comfort in safety and lack of ground breaking changes minimizes the risk of having to do more work. I understand that.
The positive solution to this conflict is to be able to do more.
We are seeing the opportunity in converging the service (migrations, support, billing) with the products (ExchangeDefender, cloud, Exchange, Lync, storage, Compliance Encryption and Archiving) with the business process (Shockey Monkey) and deliver to small and medium business what enterprise has been able to enjoy for a decade. Like an IBM commercial, minus the 8 figure bill.
The good news is that if you really hate me and what we’re doing, you have other options. We’ve considered that. Other options are doing nothing (going to conferences trying to find more clients, trying to find more people to sell legacy stuff) or fortifying a legacy tool with stuff that would make your business look amazing for 2010.
We’re investing in our solution and in our partners to make you great for 2014 and beyond because we have full faith that we’re not going to be going out of business (or on the sales block) anytime soon. Perhaps that’s something you ought to ask yourself when it comes to the vendor choices you’re making – is the service changing with the market demands or are they just trying to monetize (ie, take more of your money sooner) me in the short term because they have no faith in me long term.
That answer ought to answer far more than I ever could on this blog.
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Business valuation is hardly connected to reality and sales prices can wildly swing depending on whether the industry is growing, if the technology is truly unique or it’s hard to find talent. Sadly, most companies look for a seller out of necessity not out of opportunity and are typically gutted of both valuable items and opportunities by the time they are forced into sell-or-fold. Recently we got a chance to review the offer sheet of one of our competitors as they put themselves on the market and I think it offers a valuable lesson for anyone building a business towards the valuable exit.
The Valuation Math
The key to valuation is knowing that bankers can smell the valuation padding. Mostly because the same guys that advise the seller to manipulate their financials are also unwinding it on the other side for the buyer.
When a company doubles in the last year, after barely breaking even for nearly a decade, all through one or two partners – through which it’s selling stuff at cost – it doesn’t paint a wildly successful company with growth potential, it paints a desperate one on the way out.
If a company is growing while it’s margins are imploding, that is not a growing business. It’s the very definition of churn.
If you look at your revenue/margin year over year and your profit margin is dwindling you either have to make a hard decision to chop off the golden anchor business that’s sinking you or come to terms that the profitless revenues won’t get it done. P.S. This is also a trick companies play on outside investors and banks – though it never works – they make it seem like they are growing where they are literally just giving it away. The excuse is “well, one day we’ll just raise prices” but if that was in the cards company wouldn’t be on sale.
Every software company I have ever looked at pretends to be Apple. Just because you run your office on a homebrew firmware on dd-wrt does not make you the next Cisco.
When a company derives most of it’s profits from licensing third party software and solutions.. it has no discernable value towards it’s tech. Maybe over time most hardware will qualify as vintage and will be highly valued on eBay or electronics clubs.. by someone..
If you are sitting on a ton of hardware, licensing, third party solution stacks and integration projects the core value of your company is significantly lower than what you think it is.
Finally, the monkey circus.
“Our people are geniuses and are highly respected in our field.”
Oh yeah? If they were so smart why are they working for you while you’re here trying to sell a box of fleas?
If the later part of that line is true, they have likely been sitting on the fence waiting for a major “buyout” so they can cash out and get the hell out of dodge for a long time. I’m sure they are fantastic but this isn’t Bell Labs with Nobel laureates – and they are itching to get away from this business as bad as you are.
The Client Base
The client base can tell you how the company is really doing.
Did most business come aboard recently? If so, at what profit margin?
Did the company retain any truly long term clients? How big are they and have they been growing?
Most companies, after they get redrawn for sale, make a mistake of scraping their legacy business for new business and in the process get a ton of new clients that aren’t very profitable and will likely switch as fast as humanly possible as soon as a more cost friendly solution came around anyhow.
Further complicating things is that the change in management often opens up the likelyhood that the clients will bolt under new management for something else. When you look at what you are buying and consider raising prices on the existing client base, what are the odds the clients stay on board? If both the price and management shift (and along with it the staff) then anything you added recently might be heading for the exit as well.
The Summary of Despair
People have emotional attachment to the things they built and feel that the value far exceeds what the company is currently worth. So instead of proving that, they are offended when they take it to a third party that has to do the hard work.
When you buy a software business, and an antispam company qualifies as that, you are essentially buying clients and contracts. And when the company is obviously struggling and brings in a lot of money that it’s making slim to nothing on – that’s not an opportunity, that’s a liability waiting to explode. Thinking that such a nightmare is worth millions isn’t even viable from the standpoint of basic arithmetic of just multiplying the profit numbers considering how much of it comes from few large resellers and distributors. Any one of whom can dip at any time.
MSPs need to do the exact opposite of what is “logical” when prepping for a business sale. Money needs to come from a lot of different areas, the staff has to be disposable, the liabilities and debt need to be damn near none and your profit margin needs to be climbing not disappearing.
But then again, if you ran your business like that in the first place you wouldn’t be the one being shopped around.
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Blogs and media alike have been on fire about opinions regarding Microsoft’s purchase of Nokia – everything from the largest trojan horse operation in corporate history to the typical armchair quarterbacking of what else Microsoft should have done. While entertaining, the true value here is the business lesson:
If you lack focus, you’ll always find something else you’re missing.
For the most successful software company.. ever.. Microsoft is at the same the worlds most insecure one. Not in a sense of IT security, in a sense of confidence in it’s people, solutions and market leadership. And it makes no sense – but it’s projected by the loud CEO Ballmer leadership to COO Turner’s frequent keynote digs at it’s competitors.
Microsoft, for as big as they are, makes the same mistakes us small business owners make all the time – lack of focus and preoccupation with the trends instead of core customer demands. When you don’t focus on delivering consistent, predictable, reliable services to your client base you end up losing their loyalty and losing their business entirely while you’re seemingly just one missing piece away from having everything figured out.
So Microsoft bought Nokia. They also bought Skype, Navision/Great Plains, aQuantive and while all generate cash for Microsoft none are projecting much of Microsoft’s core value to it’s existing client base to drive loyalty or additional business. If anything, these distractions are leading Microsoft to continue losing in all the key evolving areas to more nimble and focused competitors while Microsoft tries to be (poorly) everything to everyone.
Small business IT providers need to pay attention to these moves, to the communications and the vibe surrounding the customer perception of what is going on. Outside of Microsoft offices the company appears in peril with a lame duck CEO that is on a spending spree to save itself from a future of legacy computing while it’s competitors are building exciting products in a consumer friendly way. Microsoft says they are “transitioning” while so many of us bought their great solutions in the first place because they were incredible in the first place. Microsoft is seemingly abandoning those while telling many we just don’t know what we want from Office Ribbons to the Start bar the company is losing perspective of who it’s customers actually are for the customers it wishes it could have.
Business survival is dependent on serving the customer you have, not the one you wish you had. Subway doesn’t stop serving turkey subs because it thinks it could be selling burgers, it doesn’t put BBQ pulled chicken into a veggie sub because research shows you need more protein in your diet, it doesn’t lose it’s focus.
While every business should always work on it’s next great product/service it cannot do so at the expense of abandoning the products/services it currently provides. Microsoft has in the recent history been all-in about search, cloud, phones, tablets and is seemingly further from leading any category as it constantly loses focus over which competitor they can be better than. While consumer technology trends change as often as fashion trends, those of us in the small business IT need to remember that one of the greatest and most valuable pieces of the puzzle we bring to the solution is reliability and a sense of continuity. It is what made Windows and Office great and are to this day, while not sexy, cornerstones of the Microsoft business. We often wish Microsoft could stop losing sight of those but the lesson to be learned from Microsoft’s constant marketplace distraction is that we all seem to be chasing an uncertain future – but are we doing it at the expense of ignoring the customers that actually make up our business?
I may not be a billionaire (yet) but I will always take cash from the client that wants to do business with me today over an imaginary customer that may want to give me imaginary money tomorrow. Sure, I’ll market to them and pursue them with all my spare time, but winning in business is reflected in the bank statements.
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One of the qualities that I despise in office workers is that of mediocrity. Our jobs are not physically demanding, we’re not lifting stuff, there is no fatigue associated with sitting in an air conditioned office.. so there is no excuse for putting out shit effort and half assed stuff. Yet, I find myself doing it all the time.
The breakout moment in small business happens when you listen to your customer tell you about a service they are willing to pay you for.. and you aren’t offering it for any reason other than outright laziness.
The moment you mentally break out of thinking small & safe and start investing into big and growing is the moment all your perspectives change.
Small businesses, particularly those managed by their founders, hedge towards safety and conservatism because they are the ones that built it all in the first place. I built this shit, don’t tell me what I need to do. The problem is that this thinking is neither conservative nor safe – this unwillingness to make additional bets and diversify concentrates all the risk in the existing business lines, focuses exposure on the existing client base and anything stationary.. well.. you know.
Small business is at times just a matter of a state of mind. There is nothing wrong with thinking small until you build your value, team, process and strategy. Once you’re there the breakout moment will open you up to all the possibilities you aren’t pursuing.. and if you partner up with the right people you have no reason not to.
Customers are out there, begging you to take their money.
Partner with the right people. Hire the right people. Take the money.
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This blog post (and few others) will cover the takeaways from the CompTIA Cloud Community in which I participate. I am not paid for it, the following is just my opinion, not approved or associated with CompTIA in any way (as a matter of fact I think we pay for the privilege of membership in CompTIA). Either way, it’s a good activity with great insight into the IT ecosystem and I encourage you to check it out.
CompTIA (yes, the A+ people) cloud community is made up of executives from solution providers, software vendors, hardware folks and is an interesting mix of the entire ecosystem. Over the past two years we have been working together on helping find the common ground among us all and figure out how to move forward with the part of the industry that’s moving the fastest.
At the CompTIA ChannelCon we were put through an exercise that was a thinly-veiled case study for why CompTIA Trustmark for the Cloud would make sense.. and it failed spectacularly:
Half of you will stay in this room and work on the three points that IT solution partners, VARs and service providers would want from their vendor. The other half will go into the other room and come up with three points that end users / customers would need from their cloud provider / MSP / VAR.
Sounds good on the surface – find out what the user wants, find out what the MSP wants, find out where the common ground is an establish some criteria along with the ways to measure it and charge people a few hundred dollars for a CompTIA certificate. What could go wrong, right?
What went wrong
Cloud, at it’s core, is a mixture of service and technology. It’s not exclusively one thing over another which is why so many, both big and small, struggle with a way to define and a way to profit from it. Essentially, it’s the same infrastructure we’ve always had but it’s in a new location. With the new location some of the issues go away (uptime, hardware investments, scale, etc) making a way for a slew of new issues with regard to liability, compliance, business model, security delegation, etc.
The moment at which the CompTIA Cloud Trustmark shattered on the floor like a glass dropped from the top of the WTC came only a second after all the vendors came in agreement as to what the MSP/VAR/ITSP should expect from a vendor.
It came in a form of 3 different MSP/VAR/ITSP executives opening up their mouth and saying: That is not at all something we’d be concerned about when it comes to our vendors.
In a sigh of desperation, the conclusion of our group was that while the “criteria” the vendors agreed on might be legitimate it bears no value to the VAR/MSP simply because they have a different model.
For example, among the vendors were mixed mode (direct & channel) vendors, channel exclusive vendors, master MSPs and folks transitioning around. Some wanted the MSP to do everything, some wanted them to do nothing but get out the way. Some offered MDF some didn’t. Some wanted to educate the partner while others just hoped they would assume all the liability. But all vendors agreed that the partner must self qualify to work with a particular vendor.
Among the partners (MSP, VAR, IT Solution Provider) the field was even more divided: Some wanted MDF, some wanted sales training, some wanted promotion and leads, some just wanted the vendor to do their job and deliver on their promise. Furthermore, what one MSP wanted was completely irrelevant to the other and so on.
This is just the reality of the modern IT provider. When you’re small you take on more than you can chew and you need all the help you can get from your vendors even leveraging their brand name to establish your own legitimacy. But once you do have a client base and internal expertise you want a vendor that will stay as far away from your users as possible, you don’t need more competition. The further you grow the more you realize that you need to continue to focus on your core value and want to outsource or defer certain activities to someone else or even back to the vendor. Ultimately, you become so big that you figure you can do it cheaper and better in house.
It’s a lifecycle of a successful service provider. (There is also the unsuccessful service provider: Grow to the point that it hurts and then instead of overcoming the obstacles you pretend you’re the master MSP and try leading those smaller than you around the potholes until you realize you can’t scale. Then you go onto the speaking circuit and when you bomb both your business and everyone else that followed you there is more time to write a book that nobody will read and you give up your business for pennies on the dime to be a contractor at a vendor that goes boom… and then you’re an IT coach having proven failure at every level)
The conclusion of the CompTIA Cloud Community
… was that there is no conclusion on how to effectively identify, qualify and standardize cloud service providers or their services. What everyone was clear on was that cloud is a service and that one size does not fit all so it becomes even more important to work closely with the people that you can trust, evaluate, visit and build a business model with. Trustmarking people on service turns out to be a lot more complex than checking whether they know a difference between an ATX case and a toaster.
Truth of the matter is that there are certifications that service providers go through (from organizations folks have actually heard of) and actual standards we all adhere to that take a very rigorous look at both the business operations, technology implementation, financial data handling and more – everything from PCI to ISO to SSAE16 – are gruesome in depth audits that every serious service provider must go through but they all asses and certify a small piece of the process and activity.
The cloud – as a mixture of both service and standards – is so broad that to build a certification process around it would make it so elaborate and broad that it would make it virtually useless.
Important thing to note here is that the value of CompTIA Communities, as I’ve often heard assessed incorrectly in conversations with people that are not a part of it, is not in printing certifications. It’s in the venue and conversations with other like minded executives that are truly on top of their game. To my knowledge, there is nothing else other there that provides this extensive of a reach in our industry so to those that have preconceptions about the communities based on the organization and what it did a decade ago… I encourage you to join in the conversation.
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For as long as I’ve been in the IT business (which at this point is roughly more than half of it’s existence, since the rise of commercial Internet) our jobs have been those of implementing change. Implementing networks, servers, devices, mobile networks, security of everything involved, cloud, compliance and regulatory reporting, whatever is next. In a sense, we were lucky to have huge barriers to entry with huge costs and skill requirements that perpetuated $100/hr+ billable rates and allowed many to build highly sophisticated, highly profitable businesses.
But somewhere along the way people forgot how they got there. I remember traveling the country, speaking to conferences and groups about the cloud and the higher up I went the message more often missed than hit. I spoke to pretty much all the HTG groups and one illogical and insurmountable objection was always: “I make $2,000 immediate profit selling this Cisco switch, why would I ever want to kill that with the cloud?” – though to be fair to HTG, I also got a lot of calls after their clients got taken over by Microsoft and they got shown the door: The reason you talk to your clients about technology, regardless of whether you believe in it or not, is because that is your single most important value: expertise. You don’t have to profit from it, or sell it, or endorse it – but ignoring it doesn’t mean your clients will not hear about it from someone else. Honestly, many conversations on this same topic to this day go like this as I talk to more and more MSPs dealing with despair and cloud defeat:
Marginalized business is still a business. A business that generates less revenue and more profits beats unemployment – every day. The sooner you change, the more profits you get. It’s pretty simple and far easier than banging your head against the wall.
Change is not for everyone.
Business ownership and management is not for everyone.
But people who don’t like their business, don’t like the direction of technical change, don’t like managing technology and people.. this is not an industry for you. The name of my company is Own Web Now Corp. Our biggest product a few years ago was a SPAM filter. If your sole business today was SPAM filtering you’d probably be sitting at your desk trying to figure out how to throw yourself out of the window and land on a VC manager or a Bellini brother because that’s the only way you’re going to make money in the IT world dealing with obscure and dated technology. So believe me, I understand what some of you are going through – but I absolutely do not understand why you’d continue: technology business requires innovation and constant pursuit of what the clients are asking for.
The Good News
The good news for the army of Robin Robbins Clipart Marketing Lemmings is that the last inch of “customer service” when it comes to technology is not going to be taken over completely by Apple, Microsoft, etc (maybe by Comcast or Brighthouse or Cox) because big boys have no intention of going into a business to provide technical solutions – they just want to sell their junk.
This will remain the strongest piece of the SMB IT just because of the nature of SMB: Things don’t just get thrown out in a month because Apple came out with a new iPad. People don’t just start running their business on Surface just because of stupid commercials with clicking sounds. The prospect of integrating new technology with old technology is something that likely has at least half a decade in the bottle.
On August 28th we’ll be announcing something that will give our partners a huge advantage in the marketplace. Make sure you are there. Make sure you act on it as fast as humanly possible.
Now anyone who has read this blog for more than a month can read through this and see that we’ll offer branded support. So yeah, you’ll be able to offer solutions and have someone else take care of the client but that’s not really a big deal. It’s the other stuff that I’ll explain – that will give those of you with some marketing skills and willingness to grow – a way to grow very rapidly and do so without a huge investment up front.
P.S. Of course, if you don’t work with us or haven’t worked with us in the past please don’t even bother registering – they’ll just kick you out…
Folks, here we are – we’ve built the networks, we’ve built the cloud, we’ve established the key relationships and for the most part worked out all the kinks and issues in the delivery chain. Now is the time to grow and talk to your clients and your community about the technology solutions they will be using. Good luck trying to sell them on SBS 2014 or Office 365 – they don’t need you for that and that’s the conversation you’ve already lost.
But… if you think about what is actually holding many of you back from growing your business, and where ExchangeDefender can provide scale, it’s actually pretty simple.
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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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