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29 June 2019

Podcast: the Dog’s not Buying the Food

How do you build long term competitive advantage when products and features can be so easily copied?

This podcast episode looks at how to position your company for long-term success. As value-added resellers in the channel evolve to become cloud service providers, they can no longer stand on the shoulders of IT giants. Brand building and marketing become part of the strategy to be considered by any channel CEO.

The services you build become the torch bearers for your brand, helping you to avoid margin erosion from commoditisation and copycat resellers.

In this era, the service you provide is a reflection of your brand and culture. It’s what makes you distinctive and unique.

Whether you are first or late to market, you must take control of your position in a market segment by having a point of view, or a belief about what’s right and wrong. If you don’t, someone else, your prospects or competitors, will position your business for you.

In this episode Al Mackenzie, the CEO of Predatar, is joined by Mark Sampson of Beliyf to discuss branding and positioning for IT Channel companies.

To follow The Predatar Podcast find it with Spotify  or Apple

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16 June 2019

Podcast: the finance skeptic and the sales king

Re-wiring a business in response to evolving market demands is never going to be an easy feat, even when businesses have the luxury of time and significant cash reserves to draw on.  So, when a business needs to transform at pace because its competition is hot on its heels and it fears missing out, the pressure quickly intensifies.

This is one of the big challenges facing business leaders who are trying to navigate through the rugged terrain of today’s saturated and hyper-competitive IT channel landscape.  Despite best efforts to embark upon this expedition, senior management teams within traditional VAR businesses that are looking to take advantage of the profitable MSP world, are finding it hard to get past first base.

Alistair Mackenzie, CEO of Predatar, discusses with guests Doug Sawers and Mark Sampson, the importance of getting every team member to buy into any channel transformation.

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13 June 2019

Scaling New Heights

In the 3rd and final part in his series, Predatar’s Alistair Mackenzie considers the top four technological challenges businesses are likely to face when they’re looking to scale their recurring revenue model.

With the increasing drive towards service-led, outcome-based delivery and revenue models, the risk of owning and operating technology is shifting from the consumer to the supplier.  Reducing this risk and fast-tracking evolution to scalable, profitable, service-led technology delivery not only requires the right map and guide, as discussed in the 1st and 2nd part of this series, it requires a secret weapon.  Technology that enables businesses to be more competitive and deliver customer delight.

Technology, however, can have its own unique set of challenges – challenges that can hamper MSPs ability to scale quickly and efficiently.  Here are the top four considerations:

Reducing the risk of information security breaches

How do you ensure your customers have access to everything without being able to view another customer’s data?

As an MSP, acting as an agent or intermediary and potentially servicing multiple, different end user customers, a unique set of problems can present themselves – particularly around segmentation.  If you’re a service provider that owns a server for example, and then rents it out to multiple customers, there is a strong chance of cross-pollination.  This is one of the first principles MSPs must consider as part of their technology solution.   Multi-tenancy can reduce the overall cost for each individual customer, but equally there are risks and MSPs must ensure there is robust segmentation.

Fear of missing out

How do you accurately monitor the use of labour, assets and subscriptions without systems and automation?

In the VAR world, you tend to sell upfront for a known quantity of software, hardware or services.  You agree with the customer the solution package, you put a price on it, the customer checks it and you carry out the transaction – simple.

When you’re delivering technology-as-a-service, the usage of a particular asset or resource that you’re providing on behalf of the customer could be changing on a yearly, monthly, weekly, daily or even hourly basis.  Keeping track of this type of usage is almost impossible without robust systems, tools and automation that can provide real time data, as well as historical information if a customer decides to query something.  Or, maybe you have an army of people whose job it is to constantly review, monitor and deliver reports but even then, how scalable is this option?

Avoiding productivity bottlenecks

Managing 200+ customers simultaneously can seem daunting, but this is the reality of many successful MSPs today.  To ensure you remain profitable as you scale, it’s important to recognise what structure you need to avoid productivity bottlenecks.  The only way MSP businesses can achieve the economies of scale is to consider how they can provide technology-as-a-service cheaper than the customer delivering it themselves.  If an MSP has one technical engineer for example, that engineer can be spread across multiple customers.  If you’re having to employ an Engineer for every customer that you onboard, you’re essentially not going to be any cheaper and the economies of scale that you need to attract the customer in the first place will never be realised.

Automated technologies can build operational workflows to help remove the mundane, manual yet essential tasks an MSP must perform on a regular basis such as system checks or network upgrades.  In turn, your team can then focus on other tasks that are centred around delivering the high quality of service and value add that customers are seeking.

Don’t leave customers feeling underwhelmed

Recognising that the customer must be at the heart of everything it does, MSPs are laser focused on customer success and delight.  Failure to deliver excellent customer service will inevitably reduce trust and brand loyalty.  But how can technology help you to improve customer service?

Let’s consider pizzas for a moment.  For anyone who has ordered online through Domino’s, they will tell you that their experience is seamless.  Not only is it quick, Domino’s has used technology to keep its customers completely in the loop of its internal processes – that is, a virtual window into its kitchen and the cooking cycle of their pizza.  This provides complete transparency and instils confidence that Domino’s will deliver.

MSPs who can provide a similar level of transparency will undoubtedly be the ones who thrive and prosper.   The immediacy of data, stats and reports aligned with the agreed KPIs through technology will build trust and confidence with customers.  Over time, utilising the available data and insights across multiple customers, MSPs can also start to predict behavioural patterns and in turn, provide customers with insights and recommendations based on knowledge they may not necessarily have.  This will serve to enhance the long-term customer relationship and place the MSP favourably as a true, trusted advisor.

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13 June 2019

A Bridge too VAR

In the 2nd part of his series, Predatar’s CEO, Alistair Mackenzie takes a closer look at the importance of a strong culture and highlights why Marketing should no longer be viewed as an afterthought.

There’s one thing that a traditional VAR isn’t short of – and that is technical skills.  Ask them about specific vendor technologies and they’ll be able to recite the features and benefits with clockwork precision.  In an MSP world however, this type of knowledge and insight is no longer enough to differentiate.  Service becomes king and everything the MSP business says and does has to be centred around the intended target customer.

Understanding this is key to developing the business plan and unique offering discussed in part 1 of this series.  But, what’s next?  Depending on their individual situation, there are several different paths businesses might take for this type of transformation.  Some businesses may decide to part transform or become 100% MSP, whilst others may decide to spin out a separate business or, if the funds are available, acquire a ready-made business.

Whatever path they take, leaders need to appreciate the invisible force that’s at work – culture.  With any significant business transformation such as this, employees will be keen to understand how it will impact them therefore, as keepers of the culture, CEOs must invest time and effort in internal communications.  Giving employees the opportunity to appreciate how the change matters to them at an individual level will increase the likelihood of them buying in and embracing the future direction of the business.  Otherwise, CEOs risk their strategy being swallowed up by culture.

Happy employees mean happy customers and so, CEOs must give their employees the attention they deserve.  Agree the goal and how the business will act and behave in order to achieve that goal.  Map out how the goal(s) will be communicated and ensure that employees are rewarded for the behaviours that help drive forward the new mission.

Particular consideration needs to be given to the sales team.  If the CEO decides to use the existing sales force, the thorny issue of commission must be addressed within the plan.  The commission paybacks are likely to be very different when operating as an MSP therefore a decision needs to be made as to how the business will compensate the sales team for expected future revenues.  If not addressed, CEOs may face losing their people to a competitor.  My advice – the CEO and Finance Director should look at finding the money to ensure their sales people are suitably incentivised.  Only then will the business guarantee that the team are fully on board and engaged in driving the new vision forward.

Preparing the right skills

It’s worth noting that fundamental changes to the organisational structure should be expected as the structure of a VAR business is very different to that of an MSP.  Product-orientated, the allocation of technical resources within a traditional VAR tends to be front-loaded, i.e. focused on the pre-sale and implementation with customer relationships playing second fiddle to winning the deal.  An MSP business on the other hand is all about service and customer success therefore a high proportion of the upfront resource allocation a business previously had needs to be transferred to its adoption services.  Day 2, post-sale is where the hard work really begins in ensuring that the customer is continuously seeing value from the service the business is delivering.

Businesses then need to identify the people/department/skills needed to be able to deliver ongoing customer success.  Leaders should identify the people that not only have strong technical skills but have an affinity towards good customer service and an understanding of how the technology has an impact on the customer’s business outcomes.  The most obvious and quickest route to market is to skill up your technical team.

Own your Marketing

One of the biggest learning curves for any business transitioning from VAR to MSP is the fact that they can no longer rely standing on the shoulders of their vendor brands in their efforts to be recognised or considered by their customers.  Less about the technology, aspiring MSPs must acknowledge that customers buying into their service will base their decision, not simply on the product, but in the trust and confidence they have in the brand and the team that will deliver a value-added service.

In many cases, PR and Marketing within traditional VAR businesses is non-existent but MSP businesses can ill-afford to ignore the benefits such disciplines can deliver and unless the CEO has time, part of an MSP organisational structure most certainly should include embedding a Marketing Strategist to help the business bring their new technology-as-a-service offering to life.

Look out for the final part of this series where Alistair will outline the ultimate survival guide that will help navigate the rugged terrain of the VAR to MSP expedition.

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13 June 2019

VAR from the Madding Crowd

In the first of a three-part series, Predatar’s CEO, Alistair Mackenzie reflects on the transformation from VAR to MSP, highlighting some of the key milestones and the obvious pitfalls to avoid.

The drive towards more OPEX driven purchases as part of customers’ business transformation strategies is forcing suppliers to rethink their business models to ensure they stay relevant.  Rather than simply providing a host of technologies as part of the traditional reselling business model, customers are demanding greater value and the delivery of specific outcomes, reinforcing the need for suppliers to shift their focus to a managed service offering – either completely or as a complementary part of their existing portfolio.

On your marks, get set – go!

Eager to make the change, channel businesses aren’t short of enthusiasm however, many are finding it hard to get off the starting block or, they’re stalling at the first hurdle.  But why?  It may sound simple but often, it’s because they’re lacking a credible execution plan.  A fundamental first step is appreciating that this type of transformation is akin to starting the business from scratch.  In some respect, it’s harder because of the inertia and traditional habits that have been built over the years of being a VAR business – rewiring those behaviours isn’t easy.

Ten or 20 years ago when the market was buoyant, many business owners may have been in an enviable position where they were able to set up their business without a plan however, today, it’s a very different business landscape – both fast paced and hypercompetitive.  Transforming the business takes energy, effort and planning.  If businesses don’t have a plan, then they’re clearly not serious.

Be real!

But what makes an execution plan credible?  The key is for it to be realistic.  For example, if a business is currently 100% VAR – to say that 50% of the business will be aligned with the MSP model this time next year is probably wishful thinking.  Not unless the business owner has identified some very specific and definitive steps as to how he/she is going to achieve this and answered questions such as:

  • Is that % based on switching all existing customers?
  • Is the business confident that all those existing customers will want to switch?
  • Is it realistic?
  • Does the business have the funds and resources in place to make this happen?
  • Does the business already have a track record?

With time ticking and competition hot on the heels, the more detailed the business plan is, the more likely owners are to make their dream a reality.

Engineering a solution

Part of any robust plan should also outline the type of MSP service the business wants to deliver.  Successful solutions, products or services, start with good design. Businesses need to draw on their strengths and understand what their niche market is and engineer a service to match. This isn’t about building a solution for everyone – it needs to be centred around a service offering that stands out from the crowd, rather than simply being a me-too product in a crowded space, whether that be a vertical focus, cloud specialisation, or something else.  Other fundamental questions that need to be answered are:

  • How do we differentiate our XaaS offer?
  • How do we price our XaaS offer?
  • What do we put in our XaaS offer and what do we leave out?
  • How much of the XaaS offer will be software and how much will be high-value service?
  • If providing high-value services, who and how will they be delivered?

All too often, MSPs try to build services that cater for everyone and they think appealing to the biggest possible market is the route to success.  It’s critical that businesses define their target market and establish a position in a field that is crowded.  Heinz may have ’57 varieties’ but can you name more than 5?

Another fundamental part is defining the go-to-market strategy.  How will the business attract new customers and engage them with the unique offering?  Will the business focus on those existing customers or look at targeting new prospects?  More importantly, what will be the makeup of the sales team – will the business use existing sales people and get them to focus on XaaS or will there be a different, extended team?

If the leadership team decides to use the existing sales force, a fundamental part of the plan must address the thorny issue of commission.  Big upfront deals vs. a recurring revenue model – the commission paybacks can be very different therefore, a decision needs to be made as to how it will compensate the sales team for expected future revenues.  My advice to any business?  Find the money to do just that.  Only then will the business guarantee its sales team are fully bought and engaged with the new business model.

Look out for part 2 of this series where Alistair will take a closer look at the importance of a strong culture and highlights why Marketing should no longer be viewed as an afterthought.

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