In late 2009 through early 2010 we’re seeing an unprecedented death rate of technology businesses involved in SMB (VARs, MSPs, technology experts), traditionally reseller-friendly companies going direct and the rapidly changing set of rates (from netbooks to computer service to “app store” software) for technology. The five part series titled “Death of a Services Salesman” will explore these trends, the causes behind them and hopefully give some clarity to the many that are rightfully asking: Are the good times in technology services gone for good?
We’re all about technology…
When you look at your traditional SMB technology provider, we’re for the most part all about technology. It’s our passion. It’s our business model. It’s what we live to do.
The implementation varies a bit from resellers to managed services providers but for the most part you’re not going to find former Fortune 500 CEO’s behind SMB tech firms. You’ll find a geek.
If you’re lucky, you’ll find a geek with an MBA.
We’re going to be your trusted advisor…
The focus of the sales model in SMB has always been on trust. You can trust us. You can see us. You can count on our advice because if the advice we sell you fails, we’ll fail.
So much of the sales process in SMB is built on trust that most conference content these days is focused on having panels (comprised of trusted advisors) discussing a way to compete with multi-billion dollar corporations that don’t even have a support phone number (or at best one that speaks fluent English). It’s fantastic conference fodder because it builds on the fear many face and it’s successful because it keeps up the myth that the threat is external (“Those guys are after our clients!!!”) and doesn’t confront the attendees with the actual, real problem.
The real problem: The future of technology use in business is all about business, not at all about technology.
Doubt that? Go to random 5 web sites of SMB technology providers (Google “_my city_ managed services”) and look at their About Us pages. You’ll find the pages predicated on the important factors that the business owner(s) found when they were employed by large companies and all they did was IT. We bring enterprise to small business. We give you the power of technology that big companies have at small business rates. Count our acronyms and certifications, we’re so well connected with the technology vendors we forgot who we’re selling to! Ok, that last one is probably not going to be spelled out quite the same but you will find a lot of irrelevant junk on the web site that will never lead a business owner to make a purchase.
There is a clear mismatch of a business agenda, business model (what are we selling to whom and how) and business offerings (what would you say you do for a living?)
Most people in this industry will also mount a very long list of arguments for why that is the right way to go about business: It’s technology, stupid! The problem with technology as a business is that the technology has changed so rapidly that most technology business owners cannot even cope with what the future looks like: What do you mean there is no server, where are files going to sit? Seriously, who will ever think of doing all their business on a shrunken keyboard matched with a 10” laptop screen? Communicate with people on a phone? With no keyboard? Get out of here!
Technology business owners focus on features and complete solutions to problems. Business owners focus on business and view technology as an expensive obstacle (pain) they deal with in order to get things done.
Many of my colleagues will fight with me over the above statement, but the sad truth is that their business would not event exist if businesses didn’t see technology as a pain worth paying to fix. Yes, there are some clients that see technology as a competitive advantage bust most are only willing to pay for problems to go away. Problems with the traditional technology deployments.
This has been the fundamental component of the rise of managed services providers. Now, it’s the leading factor contributing to their death:
Anything that can be measured can be managed.
Anything that can be managed, could be automated.
Everything that could be automated will be done by the lowest bidder, which realizes profits at a large scale which can only be accomplished when you focus on business not technology. Ouch!
Seriously. Look at Gmail. It’s got privacy issues. It’s got reliability issues. It’s virtually supportless and unaccountable – you can find your account nuked and nobody will even offer an explanation. In comparison to features found in Outlook, it looks like something we would have tolerated last century. Yet somehow, it’s the most popular SMB thing out there? Really? The fundamental competitive difference with Gmail (and it’s corporate cousin) is that it doesn’t care about what the geeks care about – it only worries about the user and the ability to send mail.
Talk about a solution that gets out of the users way and let’s them focus on business, huh?
Many in the SMB VAR/MSP space like to throw around the phrase “Let us worry about technology so you can focus on your business“ but one look at their solution stack makes it clear that they are only interested in putting more technology in front of the user, not less.
This is one of the four reasons technology solution providers are dying, rapidly. Unfortunately, this fact is not lost on the suppliers, vendors and other stake holders which are starting to pull their support and instead compete directly for the business.