As the mix of cloud services increase beyond just IaaS, PaaS and SaaS, we, as MSPs and CSPs, continue to evaluate our partnering strategies and vendor relationships as a competitive differentiator. New end customer demands call for an increase in the number of different cloud services and an immediate expected integration between these services, including toolsets, monitoring, management and analytics.. Getting our vendor mix right is a critical priority, or we risk future challenges with service delivery, service quality, and, ultimately, customer loyalty. From the client point of view, we are their first line of offense and defense, and any issues or challenges often fall to the MSP, not the vendors we partner with.
So, as MSPs and CSPs, how do we decide which vendors to choose, and what is the right mix? If we rush into a partnership without careful consideration, we may find ourselves with relationships that do not produce an ROI or do not generate new business. TCC research shows that 50-60% of vendor partnerships do not get off the ground after contract signing.
One of our most significant opportunities is getting our business strategy and vendor mix right. Often times a strategy session is needed to map out the solutions we offer, and the verticals we succeed in to uncover where the opportunities for growth are. Helping clients make the transition from on premise to cloud continues to be an incredible opportunity; assisting customers in determining what they need to do for sustained success in the cloud is more and more important. Specialized new cloud based services are emerging every day. Sometimes these specialized vendor players can make a huge impact on our ecosystem; or it’s an industry with a new cloud offering who can best assist us. Building and prioritizing our key growth areas for new services is essential. Take, for example, some of the more interesting services highlighted in a recent post in MSP Mentor, 7 Managed Services Offering Trends to watch in 2016:
• Remote monitoring for BYOD policies and protection
• Enterprise Mobility Management for mobile devices
• Internet of Things for everything connected
• Identity and access management for two-factor authentication
• Cloud backup services for data protection
• Compliance as a service for meeting regulatory compliances
• Remote monitoring and management
Building a rich and trusted ecosystem with the right mix of partners is essential:
• Hardware and Software Vendors
• Service Provider Vendors
• Contracting Services Companies
• Two Tier Distributors
• Other Managed and Cloud Business Service Companies
Combining the right relationships from the right types of partners enable our customer base, differentiate us from our competition and enable our top line growth.
In addition to technology, product and solutions, solutions here are some other considerations. It’s important to evaluate the entire “partnering experience” with the vendor.
• What is the commitment the vendor has to the channel?
• Would this new vendor put us in the position to have to balance a potentially competitive relationship?
• Will we need to consider competitive aspects, either with another partner or vendor in our ecosystem, or with a vendor’s direct sales organization?
• When these competitive situations arise, how will we manage ongoing successful sales engagements?
To fully consider our vendor mix, we need to have careful considerations in all facets of this relationship including:
• Our Vendor Strategy – Our vendor strategy ideally lines up with our go to market strategy and existing services offerings. Do we go with many different, smaller best of breed partners, or one large significant player that can offer many different services? There are pros and cons with both strategies. We examine our exact value proposition, the verticals we serve, and what benefits we can expect from the different strategies, and then make a choice.
• Vendor’s Partner Experience – What is the partner experience like with them? Are they a partner-centric organization where all of their business is done with partners, or do they also have a direct sales organization? What percentage of their revenue is done with partners? We can also look at partner program features cloud programs, like deal registrations, conflict management policies partner account managers support and executive sponsorship. Can we gauge the level of their partner commitment by looking at their website and other public-facing materials? Do they have a vibrant partner ecosystem themselves? If partners are not a priority for them, then it may be tough to get the partner experience we need to be successful.
• Partner Program Service and Support Model – From what we know about the vendor’s program, what is expectation for training and certifications, and what is the method and quality of their training programs? Some of the smaller players might not be as mature as the bigger market leaders, but what is really important to us? If there is a clear and defined onboarding and ramping plan, can our service and delivery teams get what we need out of it and for what investment? Ultimately, will we be able to profit from this program, or will we struggle to even come up to speed for the investment cost estimates?
• Quality of Service and Support – For any vendor we are considering, we must look at their overall quality of service and support. This is our time to really test the extent of their technical and sales support. Are the vendor teams quickly available on the phone, or does it take 10 minutes just to get someone live? How well is the vendor staff trained and ready to help us? We need to explore and test-drive the tools they offer, the online capabilities, community supported knowledge base and any analytics they offer. When we are live with a client solution, we need to be sure we have a partner at our side.
• Compatibility – We consider compatibility with the other services we offer. The tight integration between our service offerings will directly affect the service we deliver to our clients. Do the vendors together offer interoperability certifications or programs; are there reference architectures of different service offerings to capitalize on?
• Marketing Support – As we continue to build out our brand, will the vendors we align with support that goal. Within their program, does the vendor offer marketing support? If so, what type and extent are they willing to help us? Will they provide content for our marketing efforts? Are they going to help us with lead generation, or even pass leads to us? What kind of extended support or concierge services can we expect from them? The extent of the support given here will directly impact the entire vendor experience.
Last key area is ensuring the vendor we will work with also fits well into our broad partner ecosystem around cloud services.
This brings us to another key area in our go to market model: building out our ecosystem. Not only will it stand to differentiate us in the marketplace, it also creates space for a significant trend in this industry, which is, partners, within the same ecosystem, partnering together.
Collaborations between MSP or Cloud partners can strengthen our offerings and increase our competitive position. When we build out our new solution offerings, it may create opportunities for complimentary partners and services to work together. For example, I was recently at a conference and led a discussion about security. Two MSPS; an integrator focused on storage and networking explored the opportunity to partner with a highly oriented security and compliance as a service MSP in completely different geographies of the country. This example highlights how MSPs & Solution Providers working together can be a strong value proposition with the right negotiated terms and rules of engagement up front. . Having collaboration, trust and unified goals to ensure alignment along with a customer experience that is supportive, smooth and very successful are key for these relationships’ success.
That is just one example. We could have on premises solutions collaborating with cloud services, analytics services partnering with compliance services or hosting partnering with communications. Whatever the mix, having a common set of goals, and building a track record of successful clients will strengthen the overall proposition and ultimately our ecosystem.
In this post we explored the overall vendor mix and compatibility strategies when building an ecosystem, what they might look like and some of the challenges in building our vendor/partner relationships. In part 2 of this series, we will look at the best practices in managing vendor/partner relationships and successful ecosystem communication strategies.