while faced with a 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/subagent 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 midsized 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 Datto data, while nearly seven in 10 MSP partners have revenues of less than $5 million. Perhaps this should come as little surprise, since MSPs tend to provide the greatest value to firms that lack certain internal IT resources, effectively eliminating the largest enterprises as potential prospects. Perhaps equally important, “MSPs are typically more skilled at systems administration and troubleshooting than customer prospecting and deal closing,” Channelnomics researchers pointed out, and are underinvested in sales excellence, customer success and marketing, while playing “a limited role in the strategic mission of customers.” This despite a time when technology providers are placing increasing emphasis on customer experience, retention and enablement, while business decision making is increasingly made by “buying circles” that include line of business managers along with IT executives. Who’s Up? Many channel veterans we spoke to believe IT hardware and software VARs that adopt recurring revenue models are best positioned to take advantage of the current environment. That’s particularly true for the contestants willing to truly embrace telecom and related services rather than treating them as “other services.” VARs also might be a better fit for larger customers that have in-house IT, working as a supplement to internal resources rather than a replacement. They are also well-suited for the logical bundling of connectivity and communications with the growing number of devices being deployed in corporate networks. Already, larger VARs including Peak, Barcoding and Lowry, among others, are beginning to dedicate budgets and teams to monthly recurring services. It probably won’t be that easy, however. Instead, channel marketers could face a landscape in which the next primary partner target, or “the next MSP” so to speak, is “none of the above.” Rather, channel programs will need to weave their way through a broad and varied base of potential partners, including many that have adopted practices of several types of partners and don’t neatly fit into any of the traditional categories (agent, MSP, VAR, ISV, cloud broker, integrator, etc.). Who MSPs Currently Serve Customer with 20 to 50 employees 17% Customer with 50 to 100 employees 20% Customer with 100 to 150 employees 13% Customer with more than 300 employees 3% Customers with annual spend between $5K and $10K 25% Customers with annual spend between $10K and $15K 28% Customers with annual spend between $15K and $20K 20% Customers with annual spend between $20K and $30K 12% Source: Datto MSP sur vey, 2022 8 THE CHANNEL MANAGER’S PLAYBOOK
RkJQdWJsaXNoZXIy NTg4Njc=