Want to Avoid an Endless Race to the Bottom? Here’s How

It all comes down to value-add. MSP’s who know how to help clients migrate their businesses to the hybrid cloud will assume extra importance as trusted advisors.

February 25, 2016

2 Min Read
Want to Avoid an Endless Race to the Bottom?  Here’s How

By Charles Cooper 1

Nearly any discussion of contemporary channel trends includes a lament that dates back to the era when 20 megabyte floppy disks were considered state of the art. To wit: How do you offset shrinking profit margins?

Nothing new under the sun here. Profit erosion is an inevitable by-product of commodity competition. And it has been part of the tech scene  – especially on the hardware side – since the first PCs rolled off the assembly lines. There’s little point in building a business around keeping hardware up and running – not when the cloud’s self-service on-demand provisioning promise is being realized.

But while you can’t make a living by only focusing on hardware any longer, another part of the value chain is thriving.

With a growing number of companies moving their traditional IT infrastructures to hybrid cloud environments, managed service providers can comfort themselves knowing that customers will continue to pay a premium for professionals with the right expertise to chart this migration.

As one long-time observer of the MSP scene noted, the only way to truly combat commoditization in this business is to keep moving upstream. No two clients will have the exact same needs, but hybrid cloud computing’s advent puts the MSP into an enviable position in this new technology era. 

Keep the following in mind:

  • MSPs who offer cloud-based services are rated more than twice as likely to be successful than their peers.  

  • Success assumes, of course, that MSPs take on the role of trusted advisor and educate clients about how to navigate this tricky technology transition to the hybrid cloud.  

  • Price is rarely going to be the customer’s first consideration in selecting a partner. In the end, the clincher will be the quality of service and the working relationship that the MSP develops with the client.  

  • MSPs who help clients realize the business value of the hybrid cloud only will be tapping a rich vein of margin-rich opportunities, but they will also make themselves virtually indispensable as resident experts for clients in search of answers about how to best proceed with hybrid cloud implementations.  

  • The equation for channel success has dramatically changed from what it was just a decade ago. Technology implementations used to mean installing a Microsoft stack and managing the hardware that it powered. Those days are history. Managing the hybrid cloud is a far more complicated process and that’s where MSPs can help customers build out new applications and services with long-term solutions layered on top of their infrastructure.   

  • In the end, it’s less about the kind of hardware or software that gets sold then it is a question of value-add.  

Underwritten by VMware





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