The Birth Of The Strategic Service Provider


OPINION


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Timing is everything in this world.

Whether it is accidentally being in the right place at the right time or planned timing, it's often the difference between success and failure.

There are a lot of examples of "Forrest Gump" type of timing. Honey Boo Boo or the Kardashian reality shows are examples of being ready to jump into the market of reality TV at the right moment.

In the technology world, you can be too early. The Apple Newton was an example. But the iPhone was perfectly timed and has seen amazing success.

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The same holds true for the solution provider market and, in this land of cash flow being king, you can be too early and get hurt and you can also be too late.

We have been talking about the cloud and its new recurring revenue model around here for well over a decade. Our research here at The Channel Company has shown a steady increase in the movement toward a cloud model.

We've documented many of the different avenues solution providers are taking to get there — whether it be born-in-the-cloud VARs that jump in with a new business model from the very beginning or the challenge longer-term businesses face in flipping a business that is 100 percent on-premise infrastructure-based.

I personally know hundreds of partners that have become service providers to their customers. In fact, they are better and more rounded as a service provider than many of the so-called service providers such as Verizon, Rackspace, Amazon Web Services, AT&T, etc.

While I am an observer and chronicler of the market, I'm also a customer and someone that has adopted a cloud model through a partner. In our case, it's GreenPages/Logics One and while their heritage has been an on-premise infrastructure player, I look at them really as a service provider on steroids.

They are a strategic service provider.

The Channel Company is a midsize business and could certainly go to a Verizon for bandwidth and a Rackspace for hosting and others for other services. I don't, and for good reason. If I did I'd need a large IT department that manages all the other things we need from an IT perspective and much of my IT cost would get burned up trying to manage rather than providing service.

The traditional service provider players cannot solve all my problems. But my strategic service provider can and does, and I'm confident the strategic portion of that relationship can cut across any of our needs. From where I sit, this is where the market is headed and strategic service providers like GreenPages/Logics One are going to be the most sought-after players over time.

Customers are going to want to engage with these new partners, and vendors would be foolish not to. If you are running a solution provider business today that is not driving 51 percent of profit from the service side of the house, you need to take a hard look at your business and ask how you are going to get there.

The strategic service provider model is emerging because it is all about timing and, as I said, timing is everything. The timing is right for a strategic level of engagement with these players. The timing is right because traditional service providers need strategic service providers to represent them to the customer. And strategic service providers are going to become very powerful and capable of steering customers like me to the technology and business practices they believe are best for my business over the long run.

To me it's not only exciting, but it's where you want to be as a solution provider. It's the model of the future.

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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