Channel Eclipse: It's Gaining MomentumChannel Eclipse: It's Gaining Momentum
Channel Eclipse is a phenomena where large direct companies, ISVs and SaaS applications are taking market share and revenue opportunities from service providers. MSPs, beware — Channel Eclipse is gaining momentum.
April 9, 2015
By Jim Lippie 1
If you have been reading my blogs over the last couple years, you know I have been talking about a concept called Channel Eclipse. Channel Eclipse is a phenomena where large direct companies, ISVs and SaaS applications are taking market share and revenue opportunities from service providers. In case you think Channel Eclipse is just theoretical, I wanted to share a real life example of what’s happening all over the country every day.
Here is one real-life example:
90 employee business.
3 locations (many remote workers).
Spending $10,000 per month with existing MSP.
Applications: Office 365, Salesforce, NetSuite, Dropbox for business, Hubspot, customized industry specific application hosted at AWS.
The client company has migrated to a these cloud-based applications over the last couple years. The MSP who has been serving this client has seen their administrative responsibilities diminished as server after server has been decommissioned in favor of cloud-based applications. Now the client is asking the MSP to drastically reduce their monthly recurring fees because the MSP is no longer managing servers, but rather providing random helpdesk support. The negotiation is ongoing, but it’s inevitable, the MSP will have to reduce their fees by at least $3K-$4k per month or lose the client. It’s an unfortunate reality that if this MSP had offered a comprehensive cloud desktop solution earlier, the client would be spending closer to $13K per month with them instead of seeking price concessions.
This example is not an anomaly. I hear from MSPs who are experiencing this type of scenario at an alarming rate. Service providers must take action now to avoid a total eclipse. Develop a comprehensive cloud strategy and take control of your client’s technology roadmap before it’s too late.
Follow Jim Lippie on Twitter @Jimlippie or email him [email protected] for more information about how to develop the right cloud strategy for your business.
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