As the old saying goes, change is inevitable, which is why it’s important to be prepared for not only the positive, but also negative variations in the workplace and in life. Of course, it can take a fair amount of time for individuals to properly research issues that may pose a threat to their way or life or, inversely, improve it. For businesses, those changes happen almost every day, so entrepreneurs have to remain vigilant at all times to minimize their risks and take advantage of new opportunities.
A rapidly shifting managed services environment poses the same challenges to providers, as it means a variety of new developments for them to monitor on a continual basis. While the majority of those issues remain customer-focused, including a myriad of compliance and security threats, a rising number of prospective burdens involve key suppliers. As the managed services market continues to mature, partnership and sales opportunities for channel vendors are getting harder to come by. Consolidation is just one of the many activities disrupting the steady growth of managed services suppliers, often signaling the end of some of their longest and most lucrative business relationships.
While increased competition and escalating operational costs continue to chip away at vendors’ profitability, their investors still expect a solid return on their investment. Satisfying those expectations in the current financial environment isn’t easy, and industry experts suggest the pressure is surely playing a role in the latest round of consolidations. Of course, this time it’s the vendors being acquired. N-able closed its sale to enterprise IT management software provider SolarWinds on May 28. Level Platforms’ purchase by AVG Technologies was announced June 12. On June 24, Kaseya received a major, controlling investment from Insight Venture Partners and appointed Yogesh Gupta to replace Gerald Blackie as its new president and CEO.
Consider the significance of what occurred there in under a month. Three of the most well-known vendors in the managed services space are now under new management, with their solutions becoming part of much larger IT portfolios. While each company has offered assurances to its respective partner communities and will surely assess the repercussions of any future changes on all involved, the news still has many MSPs questioning their future alliances.
Will these vendor partners be as dedicated to the channel – especially for the organizations who also sell direct? What impact will this have on integrations and future development? Will MSPs be pressured to replace other vendors’ solutions? Those are just a few of the questions providers are asking. Meanwhile, despite the well-intentioned assurances of management teams, most employees are not privy to the discussions and decisions that will eventually shape new partner programs.
So, without knowing their vendors’ long-term strategies, how can MSPs best position their businesses to avoid any negative effects from these changes? First of all, each provider should always have a backup plan for replacing their key managed services tools, including a short list of prospective alternatives and the contact information for those who can help them make the transition.
The best recommendation is to build extensive industry relationships and gain as much managed services insight as possible. Every MSP should have a network of experienced individuals they can trust – those who are also paying close attention to the news and events that may have a major impact on their business. That type of camaraderie and collaboration is what helped build the CompTIA Managed Services community.
The group will be covering a number of critical industry issues at its next member meeting on July 29 at ChannelCon in Orlando. Of course, networking and education sessions are also on the agenda to help attendees expand their relationships and get a leg up on the competition. The Managed Services community is also hosting Business Transformation in Managed Services, an educational panel discussion designed to help providers conquer many of these industry challenges. And for those looking to improve their alliance skills, the ChannelCon agenda includes three courses so attendees can obtain the CompTIA Executive Certificate in Maximizing Vendor Relationships.
Interested in learning how you can prepare your managed services business for the inevitable changes ahead? Register for ChannelCon and make travel arrangements today!
Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.
