Datalink Moves To Become Strategic Service Provider

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Datalink is scaling its consulting and managed services practices to help clients solve business problems and turn cloud into an asset rather than a threat.

"If we're only going to sell technology, we're going to see a steady pressure downward on our overall business," said Paul Lidsky, CEO of the Eden Prairie, Minn.-based storage partner, No. 43 on the CRN 2015 Solution Provider 500. "But we have been able to turn that [cloud] into a business opportunity because of our consulting arm."

Datalink is one of many solution providers pursuing the shift from project-based, on-premise technology procurement to consulting to reach business outcomes with an emphasis on cloud and managed services -- which CRN has branded the strategic service provider model. This is the fourth major adjustment in channel business models recorded by CRN in its 33 years of existence. 

[Related: The New Channel Model: Rise Of The Strategic Service Provider]

Lidsky told attendees at the Raymond James Technology Investors Conference on Wednesday that the transformation has meant becoming involved in the entire IT life cycle by forming much deeper ties with chief information officers, so Datalink can participate from the very beginning in planning a solution for a particular challenge.

"Most CIOs will tell you they have far more complexity [in the data center] than they have people to deal with it, which allows us the opportunity to be the provider of that intellect," Lidsky said at the conference, held at the New York Marriott East Side. "Once we're involved with that CIO, we're involved in everything that goes on in the business from that day forward, and you end up in a 360-degree relationship that never ends."

Lidsky said Datalink is investing heavily in its advanced services business, which includes a customer support organization, a managed services practice that remotely supports private clouds and IT infrastructure through two network operations centers, and a $28 million consulting business.

The consulting arm is expected to nearly double in revenue in 2016 given the high levels of investment and customer interest, according to the company. Datalink today derives 4.5 percent of its $630.2 million of annual revenue from consulting.

“The momentum is picking up because the brand is picking up,” Lidsky said “Two years ago, people would not have thought of us as a consulting business.”

Datalink’s consulting services span both data center and cloud ecosystems, Lidsky said, with an emphasis on helping clients decide what workloads belong best in a public cloud, private cloud or proprietary data center. The company can then actually build and orchestrate that combination of cloud services, Lidsky said.

It is increasingly rare for inquiries to Datalink to come from customers that know what they need from a technology perspective. Nowadays, Lidsky said, the typical client comes to Datalink asking for help with achieving a particular business outcome.

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