CHANNEL MANAGEMENT shortage of qualified IT personnel to hire. The required characteristics and capabilities of a trusted advisor, however, are not exclusive to any partner acronym or model. In turn, channel managers of communications and connectivity solutions face a less-defined go-to market strategy then they possibly have ever encountered, leading to the recognition of and marketing toward a more diverse set of partner business models. Of course, the traditional telecom agents, for their part, are consolidating and retiring, and there has been virtually no injection of youth to sustain the telecom agent/ sub-agent model. MSPs, meanwhile, still arguably the darlings of channel program marketers, never truly represented the opportunity that was expected from them, as many folks are finding out. “Vendors that blindly seek MSPs because of model alignment look past their limited capabilities, lackluster sales records, subpar renewal performance and inability to evolve their models for future market conditions,” warned analyst at Channelnomics in a 2022 report on the MSP channel. For starters, MSPs tend to prefer mature, stable technologies that can be combined with their scalable and repeatable offerings, argued Channelnomics analysts, and be delivered for a price based on the number of seats or devices. So emergent or “transformational” solutions that don’t fit into that mode of operation will be of little interest to them. Likewise, “MSPs haven’t expressed a great interest in moving up the technology stack to business applications,” said the research firm, limiting the appeal of many cloud-based or SaaS solutions. Meanwhile, MSPs typically prefer a “sell-to” model, whereby they combine products and services into a bundle that are sold directly to the end users and billed by the MSP. Technology vendors often prefer the “sell-thru” model in which the end users are responsible for the payment. “In a classic sell-thru model, tech vendors have a pretty clear understanding of how their products are positioned, priced and delivered,” Channelnomics researchers explained. The “sell-to” model “means tech vendors lose control over how their technologies are priced, marketed and paid for,” they continued. MSP also might not be the best fit for providers looking to land the proverbial “whale.” According to separate reports from CompTIA and IT solution provider Datto, MSP tends to service the smaller end of the SME (small to mid-sized enterprise) market. According to Datto’s survey of more than 1,800 MSP partner organizations, 71 percent of respondents primarily serve businesses with between 20 and 200 employees. That figure was 84 percent in the 2021 survey. Just 3 percent of MSP channel partners serve clients with more than 300 employees, and well more than a third reported to primarily serving business with 100 or less employees. The majority of MSP clients are spending between $5,000 and $15,000 per year on managed services, showed the 46 CHANNELV ISION | JANUARY - FEBRUARY 2023
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