What's In A Name? Welcome To The Strategic Service Provider Era


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Over my thirty years as a journalist and businessman in the IT channel we have had many names for the businesses that take hardware and software products and add value in deploying them to customers.

In the early days, specifically the 1980s, it was resellers that offered access to product. But that value quickly morphed and asset tracking became a value add. Before long we had switched to Value Added Resellers as the world required resellers to add value over and above selling and tracking the hardware and software. I specifically remember sitting in the CRN editorial offices in early 1990 making a decision to essentially drop the reseller description in favor of VAR.

For a very long time the VAR label worked, and we still use it today to varying degrees. Toward the later part of the '90s it was no longer just about adding value; it was about solving business challenges with technology, and we birthed the Solution Provider term because it was descriptive of what was happening in the market.

[Related: The New Channel Model: Rise Of The Strategic Service Provider]

Shortly after that the realization came that Solution Providers were also partners in the technology industry. The partner term is used very loosely and while it fits, it's not terribly meaningful or descriptive of what Channel Businesses do in the market.

For the past year we have been debating what the right term is for the future, in which we see solutions increasingly being delivered as a service. The discussion quickly expanded, and before long we were talking about the future and where we see Solution Providers, Software Providers, Hardware Providers, Communication Providers and others sitting in the new model of information technology.

The reality is virtually everyone is moving toward a service sales model. In the managed print world where a printer is alerting a supplier that it is low on toner and the cartridge shows up as needed, is that a service or a product sale? When we started to white board this we began batting around and placing different businesses under terms like Application Service Providers for software companies; Platform Service Providers for Amazon Web Services and its competitors; Communication Service Providers for Telcos and Cable companies, Hardware Service Providers for Cisco and others.

The Managed Service Provider model is fading, and the reality is it has become an activity rather than a business model.

All this brings us to how solution providers, or partners, fit and what should they increasingly be called in this new world.

When The Channel Company became independent in 2013 we had a few short months to completely get off the former owner's technology infrastructure. You don't realize how big a task that is until you have to do it. It means building out a network, a phone system, changing accounting packages, payroll, editorial operations and sales process tools, let alone all the details behind that and more.

Having a clean canvas is an advantage, but it increases the need to get it right because it's not a slow infrastructure build. It's all at once so you have to get it right or you are out of business.

Today we are all cloud and we pay for our technology and infrastructure as a service. More importantly our provider is a strategic partner to us because they recommended and implemented which communications provider we used, which application and platform and hardware provider we would depend on.

We believe the truly successful channel players of the future will adopt what we are calling the Strategic Service Provider model. It is aspirational for many today and a reality for others. But more and more customers will turn to SSPs.

In the meantime you will see us increasingly talk about the Strategic Service Provider because we believe it's the right term for where this market is headed and how partners are adding value and moving the market forward.

BACKTALK: Make something happen. Robert Faletra is CEO of The Channel Company. You can contact him via email at rfaletra@thechannelcompany.com.

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