MSPs Get Serious About Selling Their Services To The Channel

Several years ago, Oli Thordarson tried selling managed services through the channel. He decided it wasn't worth it.

"We just decided we were paddling upstream and we dropped it. We even had a deal with Ingram and they were trying to push us into the Venture Tech guys. I said, 'Look we're just not interested in selling'," said the CEO of Alvaka Networks, Huntington Beach, Calif.

Thordarson found VARs to be too set in their ways to make the necessary changes to sell managed services.

"Resellers had problems reselling our services for a couple reasons. They couldn't understand what we were doing and they couldn't articulate that to their clients. They could sell a packaged product but not an intangible service at a higher price.

"That was because they were selling to the wrong demographic and the wrong 'psychographic'," Thordarson said, referring to his term for customers "with the right mentality, who really care about [network] performance."

Like Thordarson, InCompass IT President Tim Lambrecht runs an established MSP built on a Nimsoft-powered NOC. He is also critical of supposedly quick routes to managed services but believes there are enough resellers out there who "get it" to make outsourcing a viable option.

"I think that the MSP resellers who are going to be successful are the ones that have been in the MSP business. It's one thing to say that you're offering a service and another to understand what service you're offering," Lambrecht said.

InCompass IT still has direct clients, mostly near its headquarters in the St. Paul, Minn., area. But the MSP is "maybe two to five years out" from working solely through resellers, Lambrecht said.

"I think we're headed toward becoming a pure vendor of MSP services. It's just that we don't have a reseller in our own area that we could partner up with," he said.

Meanwhile, Thordarson hasn't ruled out testing the channel again. "It's probably inevitable that we'll go back into selling to resellers. We were ahead of the market. Just because we were a reseller and an MSP didn't mean we recognized the needs of potential reseller partners. I see things going on in the marketplace where there is more of a demand for what we wanted to do before," he said.

Two years ago, he said, Alvaka had to explain its value proposition to every client. "We had to somehow hold the prospect's attention before they looked at us cross-eyed," he said. "Today, you go in and talk about monitoring systems and they get it."