One of the biggest issues facing today's solution providers is how to embrace managed services and transition to a recurring revenue model. David Powell, vice president of managed and cloud services at TekLinks, has some advice for those looking to make that transformation.
"Where you have once been successful is not the point of value now, and you have to learn to be transformative," Powell said.
"Henry Ford once said, 'If I had asked people what they wanted, they would have said a faster horse.' Customers would never have asked for an internal combustion engine," he said. "So my point in the VAR space is that a customer is never going to ask you to do something specifically -- you must innovate for them, ask questions to stay current."
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Creating a focus group of customers is one way to help a solution provider figure out what their customers' needs are, what their price points are, what they can and cannot afford, said Powell.
"At TekLinks, we get a focus group going and you get the answers to your test," said Powell. "Ask instead of guessing. You have customers that have an affinity for you, so take them to lunch, find out and then build services on what they are talking about."
But making the transition is not an overnight process, he advised. Taking one step after another and not getting discouraged along the way is imperative.
"Using a marathon analogy, runners will get intimidated but they have just got to run one mile, then the next, and keep doing that," said Powell. "The goal is to run something right now. If they're not running, they are sitting on the side, and they need to move to steer business in the right direction."
Solution providers also need to motivate their sales teams with incentives to get them start thinking differently. Shifting a business model from one to another is a massive undertaking and affects all aspects of a company, said Powell.
"There are no shortcuts or cheat codes like a video game; it takes hard work," said Powell. "But the rewards are there if businesses create value."
Powell urged resellers to prepare financially and to take a look at their own internal functions as well.
"You need a nice safety net of cash to be able to provide your customers with what they need," said Powell. "Determine solutions, find where you are equipped to win, add organizational improvement and change methods where you are selling processes -- not your people. One favorable salesperson can't attend to all of your customers.”
Ultimately, solution providers must keep adjusting their business along the way to be successful, said Powell.
"At TekLinks we kept on tilting our business and we adjusted our business until we finally had it balanced to managed services, cloud and VAR services," he said.