Network Solutions Provider CEO: ‘Competition Is Getting Tighter’

“Customers don’t want five or six, multiple MSPs in-house,” Network Solutions Provider customer advocate CEO Phil Walker tells CRN. “They want one or two for redundancy that they can rely on.”

The many products and services in the market give MSPs plenty of opportunities to stand out from the pack and increase their revenue.

But heightening competition, a need for more information sharing from vendors, and a lack of job candidates with the right skills has MSP CEOs like Phil Walker making new investments to meet his customer’s needs and keep his company’s growth going.

“We’ve grown in what I consider an oval shape growth because we’re going in many different directions,” Walker told CRN. “Typically, it’s a triangle. It’s one or two products leading the way. And now you’re looking at maybe five to six across the technology stack.”

Walker’s Network Solutions Provider ⁠— a Microsoft partner based in Manhattan Beach, Calif., and member of CRN’s 2021 Tech Elite 250 ⁠— has partnerships with IBM, Microsoft and HP, among other vendors. His company has seen high demand for business intelligence tools, technology platform modernization and cybersecurity.

He spoke with CRN about the current landscape for a MSP and gave advice on how to get by with rising competition on multiple fronts.

What technologies and services are resonating with your customers lately?

We’ve grown in what I consider an oval shape growth because we’re going in many different directions. Typically, it’s a triangle. It’s one or two products leading the way. And now you’re looking at maybe five to six across the technology stack. In terms of technology that customers are demanding, they’re more, ‘Hey, this digital transformation thing is here.’

The ability to do business anywhere — people are getting ready to go back to the office, so you have to remove the Band-Aids that you installed and look at future systems.

It’s that litmus test of, ’I’ve had these solutions in place for awhile now, and they’ve worked. And now, I’ve had something tested and realized that they’re not scalable or I realized today how vulnerable I am versus the past.’ So re-modernizing technology platforms, starting with infrastructure, cloud servers, storage, the core things of every business.

Then getting into productivity tools — email, calendar, sharing information, and then the emergence of what I call, business intelligence. Before it was kind of ignored, a ’nice to have,’ but now it’s centralizing your data, accessing your data, and creating business drivers and action items for this. We’ve seen a lot of companies thrive in that business intelligence space over COVID because they had the data and information to push them forward. You see some companies flounder. And right now, customers are demanding that.

And then the hot topic — cybersecurity. Realizing that antivirus alone doesn’t protect you. How vulnerable you are to email attacks. How vulnerable we are to things out there, and then exposing the gaps, right? You know — when you find that you throw the boat out in the water and you realize that you’ve got a far distance to go and you’ve got leaks.

Vendors, I would say our relationship with has grown excessively from a productivity, operating, Work OS standpoint. Our relationship with HP has grown excessively through Wi-Fi 6, through infrastructure cloud, and things of that nature. Our VMware relationship virtualization has grown. Got to a maturity standpoint. And then at the end of the day, becoming that very good, best-of-breed cybersecurity solution provider.

Before, you were trying to sell it as a separate product. But now it’s one integrated solution in everything that we do and everything we roll out — thinking from a mindset of being security first.

How are you staying on top of all the advancements?

It is not an impossible task. You just have to put your arms around it in a way that fits.

My background is a little bit different, because from an analyst standpoint I’m very good at strategy. My background is strategy, innovation and execution. So it’s really understanding the landscape.

From a vendor standpoint, vetting vendors past technology. Vendor profitability, vendor execution and their support, and vendor empowerment. It’s one thing for them to say that they’re best of breed — but are you going to power me to be best of breed?

Customers — that is getting into serving, having the data, having access to data, paying attention to the analysts that get it and are passing out direct information from your customer base. Not just industry, general information, but really get down to what they’re asking for, and get to the point where we can keep pace with business. It’s not necessarily understanding, but keeping pace with systems and things that your customers are needing in a way where you constantly keep yourself in the fire.

What’s the growth strategy for NSP looking ahead?

We just went through this exercise in March of last year. COVID hit and business went down for a little bit. And I said, ’Well, how do you rebuild an MSP today? Not seven years ago, not eight years ago, not 15 years ago. If we started an MSP business today, what are the things that we would do? Who are the vendors that we need relationships with? What relationships are now obsolete or fading. And from a business growth perspective, is it people, process or systems.

So we look at two things in-house: individual effectiveness — talent — and operational effectiveness. Those are the two things that make up what we consider the DNA of anything that you’re going to roll out and manage from a partnership standpoint.

From an operational standpoint, you’re looking at a complete overhaul. Systems integrations, certifications, talent, skill sets. What does that recruiting path look like? What does the onboarding look like during COVID? And then how do you get people interested in our culture versus the culture of where they came from? And then really looking for behaviors. Not just skills. What are the people naturally able to do without any training?

Looking at those soft skills gave us an ability to give us a new view of an employee and what that looks like but also gave us a profile from vendors.

Some vendors are happy — they’re great. Revenue is great, numbers are great, the stock market says they’re amazing. And then you have vendors who are aggressive, who want market share, who have great technology and want to grow. For us, it’s finding those people that are hungry, that want to be in the market space, and not necessarily just kind of sit back and allow business to come to them.

What advice do you have for other channel partners struggling to hire right now?

We reached out to an independent recruiting firm, and we said that we don’t have a recruiting process in place. We essentially bought a railroad structure for onboarding and then tweaked it to make it our own. Hiring somebody and then having to let them go for a cultural or performance fix cost us more money than investing in the system to help us empower. That is the one thing that we learned.

My advice would be: Invest in systems for onboarding. And if you have low performers, either scale them up or scale them out. But at least give them the opportunity to scale up. And maybe they’re in the wrong job. I know a lot of times we want to hire and buy relationships — this person worked here and they know a ton of people. But how many times over is that person going to be able to flip their relationships?

Past those relationships, are they able to hunt and bring in new business? It’s really getting into the behaviors. It’s really deep diving into what your goals are for the next one or two years. Finding the right people that are willing to help you build it. And then not being afraid. It’s, ’Hey, I have a small company and we kind of do things this way and whether you’re small or big it’s the opportunity.’

What investments would you like to see your vendor partners make that would be helpful for your growth?

It’s very simple — help us to invest in the tools that you’re using. A lot of vendors have access to real resources, data and information. And then they don’t empower us to get the same tools, information and systems in place.

A lot of companies are great at marketing, white papers, case studies, high-data, high-touch stuff to bring in customers. But they don’t necessarily fund those activities for the channel. It’s like, ’Hey, let’s do a newsletter, email blast.’ And in-house, they know that that doesn’t work.

It’s a difference between net new one to two customers a month, or five to seven new customers a month. What is the riddle? The riddle is: How do you help me build $100 million MSP net 10 to 15 new customers a month. What activities can you help me support to help me get to that top of the funnel? When revenue is slow, your funnel is not big enough or your funnel is really long. So I shorten my sales cycle, add some more expertise, build systems there. And then you widen the top of the funnel so you have enough coming in to support the business. Those are the two things that vendors have to understand. The reality is that they have this information. They know this, they live this every day. Everything that they do is followed by those three things. Pass that on to the partners. Allow the partners to get into that same pool as you.

With all these new products and services available, how competitive does the channel partner landscape feel?

No one ever talks about competition. The reality is that people are doing business with somebody. There’s never a chance of me walking into a company, and they don’t have an IT company, they don’t have an IT person, they don’t have an IT system, they don’t have IT solutions. They purchased from somebody. That revenue, if it’s not coming in my door, it’s going into somebody else’s door.

We don’t talk about competition but that’s the reality of it. Being in the markets that we’re in, I see competition at a very high level, especially when you start going after RFPs (requests for proposals), especially when you start getting in that RFI (request for information) world, especially when you don’t have a solid relationship or you have a project relationship and not a vendor relationship, where you are not the in-house guy.

Competition is getting tighter. There’s definitely going to be some shoulders brushing up against each other a little bit more, maybe not so in the past.

Customers don’t want five or six, multiple MSPs in-house. They want one or two for redundancy that they can rely on. I always go back to: There’s an old IBM commercial and a guy goes to the cafeteria, and he’s got 12 people behind him. And you know this guy does this, this guy does this, this guy does this. There’s the other guy sitting at the table by himself. And he’s like, ’Oh, well, do you take them everywhere?’ And it’s like, yes, but this slows down the system so much.

Now you’ve got the security company coming in and they want access to these systems and they need this information. You got the copier guys coming in with the digital transformation of copiers, work from anywhere, print from anywhere, and they want FaceTime and they want to sell machines. You have the OEMs that are reaching out as well. And before it was just maybe a few of us in the room. And now wherever you throw a rock you’re running into an MSP slash VAR slash integrator slash IT broker.