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COLUMN: Why Strategic Service Providers Are Accelerating

The Channel Company’s Executive Chairman Robert Faletra says the strategic service provider is coming into its own in a more visible and pronounced way because the market forces have helped the acceptance of it.

In high-tech we love to talk about how fast things move. But do they? In some ways, yes, but in reality the big changes take time.

For someone like me who has been watching and chronicling the industry since the early1980s, I can rattle off a lot of fast- moving trends that were hyped as rapid accelerators that often took a decade or more. There was the year of the network that took over a decade to take hold.

Perhaps it’s because CRN has always watched, researched and predicted these changes, it always seems longer because we start talking about them long before they take hold.

Cloud computing is a great example. We began debating how it was going to happen in our editorial pages and at our XChange events four or five years before the world even grasped the concept behind it.

As part of the cloud movement, we did some major research back in 2015 and presented much of the findings in 2016 where we began to categorize the solution provider business models in new ways. It was then that we introduced the term “strategic service provider.”

Now here we are five years later and it’s still evolving, and the industry is talking about the speed at which it’s happening.

The speed in the end isn’t important. It takes time for the market to adjust and for business models to change, but we always get there.

The strategic service provider is coming into its own in a more visible and pronounced way because the market forces have helped the acceptance of it.

The partner community was ready for it when we identified it back in 2015, but the end-user community and the vendor/supplier world was not.

Let’s face it, the internal IT departments inside the customer base did not have a lot of incentive to push for the outsourcing of their own jobs.

There were a lot of IT departments that resisted the idea of everything from pushing server farms and data backup into the cloud, knowing that meant fewer jobs internally. It’s human nature to protect your own self interests.

Having the ability to walk over to a user’s desk when a problem occurred was an essential pitch of why it needed to be handled in-house. Being part of internal strategic meetings where IT would need to understand its role to help move the business forward was key.

In addition, the vendor community needed to rework and reconceptualize its programs and how it needed to interact with the evolving sales and service solution provider world.

The vendor community began the transition far earlier than the customer base because there was little reason to attempt to slow its pace. What did slow it down were compensation plans for the sales force that needed to be fixed and advantages to the new model.

But when COVID-19 came along and suddenly nearly every employee in most businesses vanished from the office, suddenly the internal IT department was as remote as an outsourced strategic service provider.

And if much of what was used in terms of productivity applications wasn’t already in the cloud it sure needed to be ASAP.

Cost-cutting by customers became important and outsourcing what wasn’t a core competency become an easy conversation.

So now here we are more than a year after the COVID-19 virus arrived from China and we are seeing an acceleration to the strategic service provider model.

HPE, Dell, Cisco and other major suppliers have their programs and strategy keyed up in such a way to push this forward.

The end-user customer base is ready and accepting that it’s the way forward. If you‘re not on board yet, you better get there fast.

 

 

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