The break-fix model is dead...long live the hybrid IT services business. If I had to name one key channel trend in 2015, that would be it. After a decade (or more) of industry experts touting the need for IT services professionals to completely transition to cloud and managed services, their mantra has shifted.
For some, that change was subtle, now recommending a strong push into virtual services while maintaining a bare minimum of onsite support and hardware sales options ─ the things your clients can’t get other companies to manage. While “getting rid of the old” was the rallying cry for a number of years, many are focusing their attention on a slower transition.
The former group of providers puts great emphasis on weaning their clients off less efficient practices and systems, such as maintaining costly servers and high dollar communications systems. They push a quick migration to easier to manage technologies that drive their own recurring revenue, including cloud applications, web-based phone solutions and other services that can monitored and repaired from remote locations. New entrants with this mindset tend to build a more basic portfolio than the latter group, focusing great attention on their companies’ areas of strengths ─ and may end up overlooking some of their clients’ true business needs.
The Hybrid VAR
The other camp of channel players takes a different approach. Those following the Hybrid VAR model understand the need to provide a full range of IT services and solution options to keep their customers happy and their competition at bay. They recognize the need to support all their clients’ business objectives and add the appropriate products and service offerings to their portfolio hen needed. That may even include hardware and software sales, which the experts warn so much against, not to mention the almost as dreaded onsite service option.
Why go against the touted “conventional channel reasoning?” In most cases, it’s the reality of their market or specific customer requirements. If a provider can’t be the full IT shop that a particular client needs, they may be forced to find someone who can. It’s less about having “one throat to choke” for small business owners than finding a trusted advisor who will help drive (and manage) their technology strategy. Many of these customers are more focused on management simplicity and streamlining their supply chain than they are on saving a few dollars by working with multiple vendors.
That’s the real value of the Hybrid VAR model. Those who can develop their portfolios to match the comprehensive needs of their specific audiences can typically charge a premium for their efforts. They can manage more of their clients’ needs, even if they aren’t delivering 100% of the services themselves. Through partnerships with other providers and vendors, a Hybrid VAR can be the outsourced technology department every small business (and larger) needs to support its future growth.
Managed services and cloud-enablement programs are quite crucial under this model as well. But they are simply just tools in the portfolio. When combined with traditional services, consulting support and the latest digital offerings (i.e. mobility, big data, social media), it gives providers a formidable arsenal to compete more effectively with larger competitors and direct suppliers. More importantly, it’s a differentiator that, in most cases, those rivals simply can’t match.
As long as each service is profitable (or contributes heavily to the profitability of that client), it may be a good option. The factors that determine each provider’s portfolio can vary considerably, from specific customer needs to the VAR or MSP’s individual specialization. That’s the beauty of the Hybrid VAR model. It’s whatever works for you and your clients, and drives profits for all involved, is a viable option.
As we head into 2016, it’s good to see the “soup to nuts” assortment of services seems to be in fashion again. It’s gained a new name and a host of innovative options, but those who need a more flexible portfolio to keep client retention and new customer acquisition high can come out of the shadows. The Hybrid Model makes anything possible and a topic for discussion with a wider channel audience.
Expect flexibility to be a common theme in 2016. The Hybrid VAR model will surely be a topic of much discussion at CompTIA and throughout the IT channel over the next twelve months ─ and likely much longer. Take time to get familiar with the term and what it means for your organization. Chances are, you’ll find some options that work well for you and your customers.
Have a safe and very Happy New Year!
Brian Sherman is Chief Content Officer at GetChanneled, a channel business development and marketing firm. He served previously as chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@getchanneled.com
