Welcome To The Rise Of The Strategic Service Provider Business

Never underestimate the power of the channel to listen to customers and then make big bold business model/technology shifts to address customer pain points.

That is just what is happening with the rise of the strategic service provider — a foundational shift focused on business-outcome-based strategic services that The Channel Company detailed as part of a channel research project that began two years ago.

Fast forward and it is clear that the strategic service provider model, which is driving huge gains for partners in recurring revenue cloud services, is driving a massive channel transformation. Strategic service providers, in fact, have $1 million more in annual revenue and nearly double the percentage of cloud and managed services sales than traditional solution providers.

One of the best cases of the channel transformation: Entisys360 — No. 227 on the 2016 CRN Solution Provider 500 — which recently unveiled a new cloud service that for the first time provides midmarket customers with a multi-cloud workspace aimed at driving business outcomes. The Entisys360 Workspace Cloud is a fully managed subscription-based service that securely delivers midmarket applications for customers in private, public, hybrid and in multicloud IT environments.

The service, which was under development for more than a year at a cost of more than $1 million, puts Entisys360 in the front seat as the trusted adviser driving cloud-first digital transformation. "We have moved from selling midmarket customers infrastructure and professional services to becoming a true strategic service provider," said Entisys360 CEO Mike Strohl. "The name of the game is no longer about technology, it is about business outcomes. This platform allows us to bring those business outcomes to midmarket customers."

Entisys360 is not alone. NWN, No. 68 on the 2016 CRN SP 500, which has a fast-growing VoIP-as-a-cloud-service business, recently expanded its as-a-service business offensive with a device-as-a-service offering. In fact, NWN was recently singled out by HP Inc. for its first channel-led device-as-a-service win.

NWN CEO Skip Tappen told CRN that NWN's device-as-a-service sales pipeline has more than doubled over the past year. "There is a lot of upside," he said. "The real differentiator is the services and how do you take a great product and make it really easy for the customer to consume it. More and more customers don't want to own the product, they just want to consume it—especially millennials. They just want a great product and have it work when they want it."

The strategic service provider shift also is being recognized by one of the best and brightest of all cloud services companies, Google. The Google channel transformation, in fact, is the subject of our cover story this month. Under the leadership of former VMware CEO Diane Greene, who now heads up Google's cloud business, the company is making a no-holds-barred strategic service provider channel charge. That includes a significant channel reset under the new channel chief, Bertrand Yansouni. The strategic service provider model is in full swing. It's time for partners and vendors to move even faster. The future is now.

BACKTALK: Are you making the strategic service provider transformation? Contact Steven Burke at sburke@thechannelco.com.