Solution providers face cataclysmic changes
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You don’t have to be a believer in 2012 doomsday predictions to do some serious soul-searching about how your business stacks up in a rapidly shifting cloud-computing universe.
The fact is the technology ground is being pulled right out from under solution providers as businesses of all kinds re-evaluate how much they are spending and how they are spending it on technology infrastructure, solutions, software and services.
Staying pat with your business model virtually ensures failure.With that in mind, here are five tips to success in 2012 culled from top solution providers, UBM Channel research and CIOs.
1. Follow The Money: It’s not about what you want to sell, it’s what your customers want to buy. Do a detailed analysis of your customers’ IT budgets and chart it on a grid going three years back and three years forward. Who you sell to and what you are selling are moving targets. If you don’t move with your customer, then you become the target -- and your rivals will be the ones with the arrows.
2. Software Development Skills Are A Must-Have: There is a reason cloud SaaS companies are commanding huge premiums. It’s called supply and demand. Invest in some young, hot cloud software development talent and then put that talent to good use on some key customer cloud services engagements. Customers want a partner that can help customize and integrate cloud services.
3. There Is No Substitute For Business Expertise: Solution providers are rapidly evolving into business solutions advisers with technology as the primary tool to drive efficiency, increased sales and customer satisfaction. In the old solution provider world, technology knowledge was king. Today, it’s all about business knowledge. Think McKinsey & Co. It certainly does a lot of technology consulting but is considered first and foremost a business adviser. You need talent that knows your customers inside and out.
4. Business Process Outsourcing Bonanza: Businesses are outsourcing specific business functions and you need to determine where you play in BPO. Think about providing the local insurance agent with a smartphone-based claim process. It’s a business solution that a BPO provider -- not the insurance agent -- will host and manage.
5. Recurring Revenue Rules: Everyone knows that recurring revenue and subscription-based services revenue are the secret to success in the cloud era. But knowing that doesn’t get it done. The biggest and most aggressive solution providers are investing in their own network operations centers that will provide private cloud platform as a service, infrastructure as a service and cloud management.
Solution providers are going to find both danger and opportunity in 2012. Those that succeed will barrel through the danger and find the big opportunity by embracing the business and technology shifts that are exemplified by that tried-and-true solution provider maxim, “Where there is mystery, there is margin.”
BACKTALK: Are you practicing my five tips for success in 2012, or do you have some to add? Contact Steve Burke at firstname.lastname@example.org.