Ask A Solution Provider: What's The Biggest Challenge The Channel Faces Today?

Challenges Ahead

The CRN Best of Breed conference, held last week in Atlanta, brought together over 100 top executives from the leading solution provider companies that were honored on CRN's Solution Provider 500, Tech Elite 250 and Fast Growth 150 lists this year.

These solution provider executives are on the front lines in the sales trenches and are able to change their company's habits to survive the disruptive change sweeping through the channel.

CRN spoke with 12 of solution provider executives in Atlanta and asked a simple question: What's the biggest challenge the channel faces today? Here's what they had to say.

Bill Briggs, CTO, Deloitte

Talent. And not just sourcing, but shaping. That's the investments we're making – I mentioned Deloitte Digital, which is a go to market for the outside, but we also have a huge investment in digital Deloitte and our people, upscaling them and making them more tech savvy. We want to look at how we practice our craft with an eye toward responsiveness.

Shahin Pirooz, CTO, DataEndure

The challenge we're seeing is the difference between Capex and Opex. A lot of vendors are really good at treating partners on Capex; they don't know how to properly to work with the channel in the Opex space. It's very difficult for a VAR who bases their entire revenue model on Capex to shift toward a model that will trickle and that will take five to 10 years to build. I think the challenge is if you haven't already shifted towards a subscription model, then there's a big change.

Allen Falcon, CEO, Cumulus Global

The types of skills we need are changing, or have changed significantly. In certain areas of the business, you'll still need those technical gurus and expertise. If the cloud is providing the infrastructure, you don't need the infrastructure expertise in the same way as you did before. The skills we need more of fall in line with the business, either horizontally to basic constructs – process management, improvement or data management, policy and procedure – or to specifics for verticals that have specific needs.

Philippe Schmitt, COO, MotherG

It's hard to try to bridge the gap with containers, to fill the gap between the needs [of] our small customers ... and how we are as an MSP. Are we going to continue to entertain the idea we are your value prop, your trusted adviser? Because there is much less server to sell once they've migrated to Office 365 in Azure, maybe for a line-of-business application or a SaaS model. We're going to have to continue to act as potentially a curator of cloud-based applications. How do you pick and choose those various modules? Might they be under containers? Might they be under SaaS or another model? That's definitely where we're putting more focus now. We know what brought us here in the past 10 years is not going to help us in the next five or 10.

Ian Ash, VP, Sales, T2 Computing

The consumerization and democratization of technology. There's an access layer there. You need to be able to pivot on that. We heard both Michael [Dell] and Meg [Whitman] talk [at the Best of Breed conference] about the consumption model. It's an on-demand consumption model. That's the biggest challenge. How do you position your business for growth, profitable growth, when you're in a consumption model? It's a big challenge, and not all solution providers are going to be surviving.

Matt Johnson, VP, Sales, Davenport Group

I would say what role cloud is going to play, and what services are going to wrap around that for resellers that are focused particularly on the midmarket. That's one of the bigger ones. Services is another one. Even if you offer services today, what services are you going to continue to add to the portfolio?

Chris Johnson, Cybersecurity Compliance Strategist, OnShore Security

I think it's really in that value proposition of vendor management. With Target and Equifax and a lot of these things that have happened recently, we've got to manage those vendors for our clients -- we can't let them be self-managed. I think that is a big challenge. And clients don't want to hear that they are paying you now to manage what they think is the new way to save money, and now they need you more than ever.

JoAnn Pfeiffer, Senior Account Manager, Eastern Data Technology

For the hardware channel, the margins are razor-thin. Anything from a tax standpoint could be very beneficial, so we're hopeful for any kind of tax cuts that could come out.

Bradley Brodkin, CEO, HighVail

This movement towards IaaS. For those of us in the hardware business, whether security, network, pure server, storage, we're still selling a lot of hardware, still building a lot of private clouds. But there is this real hybrid movement. That's why I'm making bets on companies that are innovating in infrastructure.

Brian Young, Director, Sales, Trivalent Group

Nontraditional channel approaches, seeing how that shapes. From companies like Amazon, that has been predatory on a lot of fronts. When you're faced with your own potential extinction, [I'm] going to push back a little and see how I'm going to avoid that. It's not about the cloud, or subscription sales, but these nontraditional companies that are playing with the channel model in a way that makes us nervous. You can include Google in that.

Michael Haley, President, Edge Solutions

We all have to transform our business models. It is all about people -- bringing sharp and bright people to work together collaboratively as a team.

It is always all about attracting great people and creating an environment where they wake up saying, 'Thank God it is Monday!'

Everyone is transforming their business. We are not stuck with old business models. At eight years old, we are still a relatively young company.

Frank Blanco, VP, Purchasing, Howard Technology Solutions

I think the biggest challenge is transforming your sales force. It is all about getting customers to understand what cloud solutions are and pulling them all together in a managed portfolio so our salespeople can go out and talk about the benefits to customers.