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Network Solutions Provider’s Walker: Midsize Enterprises ‘More Open To Next-Gen’ Tech

Joseph F. Kovar

‘Because of their staffing issues, clients are going to be more open to things like zero trust faster than we’re seeing in the enterprise. They’re going to be more open to staff augmentation on the cybersecurity side, and they’re going to be looking at XDR faster,’ says Phillip Walker, customer advocate CEO at Network Solutions Provider.

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A Solution Provider’s View Of The Midsize Enterprise Market

Midsize enterprise businesses occupy a unique part of the IT market. During his keynote at this week’s Midsize Enterprise Summit in Las Vegas, Mike Cisek, an analyst from Gartner, said midsize enterprises typically have an IT budget of under $20 million and 10 to 30 full-time equivalent IT employees serving a total employee base averaging about 1,766 people.

Those companies face several serious IT challenges, first and foremost among them being security, Cisek said. Yet they typically lack a dedicated Network Operations Center or Security Operations Center. Over half lack a full-time CISO and can count on only 5 percent to 10 percent of their IT budgets being devoted to security tools and services, he said. “Economies of scale do not apply,” he said.

Midsize enterprises need help navigating their issues, the kind of help that can be found by IT solution providers, said Phillip Walker, customer advocate CEO of Manhattan Beach, Calif.-based Network Solutions Provider.

[Related: 7 Major Cybersecurity Risks For Midsize Organizations: Gartner]

Walker, speaking with CRN during the Midsize Enterprise Summit, said companies that rely on channel partners for support are more likely to succeed in reaching their IT priorities than if they work directly with vendors.

“When I go sit down with a customer, I don’t have an agenda,” he said. “Instead, it’s, ‘Where are you at? What do you need? How can I deliver it?’” When you call a vendor, that vendor will say, ‘Don’t talk to anybody else. Only talk to us.” But once you purchase that product, and you now own that product as a company, how do you now get that to grow into your solution? How do you get that piece in without a channel?”

IT solution providers are evolving as midsize enterprise business requirements evolve, Walker said. For instance, he said, his company is working closer than ever to the edge of customers’ IT infrastructures because that is where their own customers are moving.

“And as we get to the edge, people are starting to realize, ‘Hey, I need your team, and your expertise. And I need more of a strategic plan and a road map on how to get from siloed infrastructure to a cloud infrastructure to hyperconverged to zero trust,’” he said. “Who’s going navigate that? That’s what we do best.”

Walker gives CRN an up-close look at the importance of the channel to the midsize enterprise business market.

So when you look at midsize enterprise business customers, what are you seeing? What are they telling you their top priorities are?

It’s a very unique market because as big as the companies are, they don’t have huge IT teams. So we’ve grown with them in a co-managed environment, whether it’s on the MSP side or on the cybersecurity side, and we find that they’re more open to next-gen technologies than the enterprise. So they’re more open to innovation and to some of the smaller and more unique partners that we work with.

When you say ‘more open to next-gen technologies,’ what types of technology are you referring to here?

Because of their staffing issues, clients are going to be more open to things like zero trust faster than we’re seeing in the enterprise. They’re going to be more open to staff augmentation on the cybersecurity side, and they’re going to be looking at XDR [extended detection and response] faster than some of the other people. For us, 60 percent of our customer base is in this market space. We understand their needs: easy to implement, sensitive to IT budgets, the ability to scale up current staff, and then giving them a tech stack that is unique to them, that fits them because we understand where they’re at. And implementations are difficult. So we’ve always looked at ourselves as vendor-agnostic and technology-agnostic. So where is the client at? What is its talent stack? Let’s grow that from a feature standpoint, take care of all the things that they haven’t had time for, create a baseline, and then fill the gaps with what they need.

As a solution provider in the midsize enterprise business, do you have to evangelize the latest technologies and services? Or are customers coming with knowledge of what they want?

There’s a lot of evangelization and case studies, showing proofs of concept, and engaging in really good bake-offs. Because it’s hard to move somebody where they’ve never been. Right now, the threat landscape for a customer changes every three to six months. How can you keep up with that if you don’t have the tools because the tools that you bought six months ago took four months to deploy and so don’t necessarily translate into your threat vector. So we have to find the new threat vector six months away. Those are the things that we do as a solution provider that helped accelerate that. Because we can come in and say, ‘Hey, this is where you’re at today. I see where you’re going tomorrow.’ And we can provide those next steps and put in solutions at scale that can grow with them.

So you think this is something that only channel partners can do?

One value we add is we can handle the vendor selection. So if there are 15 different solutions out there, which one fits that company? We can do the product recommendations for the company. So we can work as a partner with the CIO, and be part of that hive mind. They can see what’s on the market, you see what’s on the market. You understand it. You know where they’re at.

When I go sit down with a customer, I don’t have an agenda. Instead, it’s, ‘Where are you at? What do you need? How can I deliver it?’ When you call a vendor, that vendor will say, ‘Don’t talk to anybody else. Only talk to us.’ But once you purchase that product, and you now own that product as a company, how do you now get that to grow into your solution? How do you get that piece in without a channel?

So essentially, the channel provides enablement for all the technology pieces. Without the channel, the vendors couldn’t grow and do what they needed to do. Now, if you’re selling a solution to a midsize enterprise, after the sale is done, who’s going to support it? Who’s going to fix it? Who’s going to implement it? Who’s going to manage it? Who’s going to scale it out? Most of the midsize enterprises don’t have big IT departments. And if they do, they’re busy doing migrations and doing 900 other things. This new thing comes, and they have to stop what they’re doing to take it on. The channel eases that time to market. So I look at value, and our biggest value is here in the midmarket IT space.

In the SMB space, there is no value added. We say, ‘This what you should do.’ The CEO says, ‘OK, you guys are the experts.’ And we do the work because we’re the guys on the line. When we’re co-managing a relationship, we become their supply chain management, their strategic advisers. We become that piece because no one has time to read 19 Gartner reports. No one has that time. But if you read four and I read four, then now we can work this thing out.

You’re going to see more and more vendors start to embrace the channel. Maybe before they could survive without it. But now they’re starting to realize they need our knowledge. There are so many new programs from HPE GreenLake to Dell Apex to Cisco Plus. They’re all great and wonderful. But how can a company roll that out? How many person hours will that take to roll out? And IT has to deal with DevOps, cybersecurity infrastructure, work from home, cloud, multi-cloud, Microsoft. It goes on and on and on. At what point is it too much? You need a solution provider to come in and help with all that stuff. Because otherwise, you may buy a cybersecurity product and it may sit on your shelf for six months because you can’t roll it out.

Are services a big part of your midsize enterprise business? Or is there still more of a focus on more traditional products?

It’s a hybrid. It’s more strategic services, sometimes stemming from the COVID experience. Not necessarily the what, but the how and the why. I think we got more into policies, procedures, strategic planning, than we did in the past. Now you’re in a situation where every company has written policies. As we’re helping companies do different things, it becomes, ‘OK, we can see a clearer picture of where you’re trying to go, where you’re servicing your clients.’ So we’re always giving our partners the best, and our customers the best, so they can support their customers. When we’re supporting a bank, they’re supporting their external users. So how do we enable that? So we’re starting to get closer and closer to the edge because that’s where they’re moving. And as we get to the edge, people are starting to realize, ‘Hey, I need your team, and your expertise. And I need more of a strategic plan and a road map on how to get from siloed infrastructure to a cloud infrastructure to hyperconverged to zero trust.’ Who’s going navigate that? That’s what we do best.

Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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