When Vendors Become the Competition

A recent article on Channel Web, “HP Funds New CDW Effort To Target SMB Accounts” states that HP is going to be funding 110 reps at CDW to target customers under 499 employees. While this is not a managed services play it does get you thinking. Dell is making a large direct play in the SMB, Microsoft just announced their SaaS solution, Symantec is looking to streamline their sales by cutting out the middle man (albeit for enterprise accounts). All of these topics have a lot of reseller screaming foul play. There is so much concern with channel conflict, not getting leads from the vendors, commoditization, how can we survive in a SaaS world, etc.

What this really looks like to me is these large vendors are looking for new and better ways to run a profitable business. Rather than complaining and worrying about what their vendors are going to do next, resellers need to be looking for new and better ways to run a profitable business.

I think that we all know that managed services are the way of the future for our industry. If you are just transitioning to this model or are an established MSP I think that you will find you have less and less reliance on vendors. As a Master MSP myself I can tell you that we have very little reliance on vendors, with the exception of my RMM and my PSA providers I really don’t care what any of the vendors are doing.

If you have been relying on a vendor for leads and also trusting that vendor not to target your customers directly then what do you do when both of these dependencies are gone? Again look for new and better ways to run a profitable business. Here are a couple of recommendations for you to ponder.

First off, make sure that you truly are the “Trusted Advisor” to your existing customer base. This will keep these vendors out of your existing customers so you can focus on growing customers.

Second, stop relying on someone else to give you leads. Get out there and get them yourself. Marketing is something that we, as technology people, tend to shy away from. I can tell you that HP, Dell and CDW don’t shy away from it, that is how they got to be where they are today. I am no marketing expert but my experience has been that top of mind awareness is key to acquiring new customers, so get your name out there. Send mailers, make phone calls, attend networking events, hold seminars, build a decent website, etc….

Finally, actually run a profitable business. If you don’t have a CFO, get one, there are a lot of part time CFO’s out there (much like there are a lot of part time CIO’s out there). In a time with increased competition and tighter IT budgets you really need to focus on your profitability. This means cutting costs, managing cash flow, properly forecasting your revenues and focusing on your profitable lines of business.