National Data Security Bill and its Impact for MSPs

I encourage everyone to read this article as its impact on the MSP community would be significant. The author of this article talks about the possibility of a National Data Security law here in the US and what it would mean to businesses. I have been saying for a long time that federalization (being under the control of the federal government) would have a big impact on MSPs and their clients.

While such a bill would likely be viewed by many businesses as similar to Sarbanes Oxley (i.e., a real pain), federal legislation of this sort would provide a windfall benefit to all MSPs doing business in the United States. Consider this: if all companies in the US had to comply with a federal law stating that they needed to take certain precautions to safeguard sensitive data, how many of them would be ready for such a task? My guess is not many. Most of these companies would not even know how to begin to make their networks and systems secure.

It is still not clear if, or in what form, such a bill would come into existence. However, if it does become law, it would behoove all MSPs to be aware of this bill and start preparing your clients. The worst case scenario is the bill does not become law and you have helped a lot of businesses protect their data. Not a bad thing in my view.

The VAR is Dead Redux

I have written a few blogs surrounding the general theme of "the VAR being dead" and it seems that these little vignette's have caused quite a stir. In actuality, I don't think it is causing very much of anything but there are some people out there who consider themselves aficionados of everything "VAR" and therefore, they feel slighted. I would like to clear the air; I will not print a retraction because I continue to stand by my earlier statements. Instead, I would like to further clarify this topic so that there is no misunderstanding on this issue.

First, the term VAR (or value added reseller) has been in use for quite some time. It has gained popular meaning specifically around those companies who provide break/fix or reactive IT management…time and materials business models. The term MSP (Managed Service Provider) has been around for roughly 15 years; not as long as the term VAR but it is certainly not new.

Second, there are extant companies using the term VAR to describe themselves and what they do. These companies usually do not use the term VAR in public or when describing themselves to clients, but they may still use it when talking to other channel professionals. Technology vendors also still use the term VAR, most often when describing their channel. It tends to be a very generic term and that is why these vendors use it a lot.

Third, it is generally accepted within the IT channel that break/fix or reactive IT management is no longer an accepted practice. When I say accepted practice I mean it is gradually being phased out in lieu of proactive IT management, otherwise known as managed services. While there may be companies (even some who call themselves VARs) who still resell products, there are very few of them who do not derive at least a small percentage of their revenue from a managed service offering.

Now, you may be asking yourself questions: how does Charles know all of this? This is my opinion. It is, I believe, backed up by reality and a healthy dose of logic. I have been in managed services for nearly 10 years. I have talked to more IT companies than I can recount (yes, even VARs!). When I say I have talked to them, I don't mean chatting with someone for 20 minutes at a conference. I mean in depth analysis of these companies, charting their progress over the years, experiencing firsthand their trials and tribulations and successes as they took their first steps as managed service providers.

Many of these companies have been very small. In fact, it is the small VAR trying to change into a MSP for whom I have the most affection. These companies are taking real risks and making changes to their business because they believe it is the right thing to do; not because anyone (least of all me) told them they had to buy some software and change their name to MSP. I respect that kind of dedication and entrepreneurial spirit.

So, I stand by my earlier statement. I believe the VAR is dead. This does not mean that IT companies are no longer needed. This means that break/fix and reactive IT management companies who solely rely on revenues from products they resell must either change their business model or face potential extinction.

Now, if you disagree with what I've written, we can always wait around for another 10 years and see which one of us is correct.

Selling Managed Services - have some faith in yourself

Most small MSPs I talk to frequently lament the state of their sales and marketing efforts, or the lack thereof. I hear a lot of CEOs complain that their sales are flat and they just can't seem to find qualified sales leads.

Now, I tend to speak plainly about these types of issues so pardon my bluntness. The first step is you have to get out of the office. Now, I know what some of you are thinking. "Charlie, you keep telling us MSPs to do more remote work; don't go on-site." What gives? Well, while technicians should spend most of their time at HQ the CEO should not. Caution: I am writing this blog for you small MSPs (you know who you are) whose owners do most of the selling for the company.

Many of you small MSP business owners probably lay awake at night dreading the prospect of making sales calls. Please, let this be the last night you ever feel this way. Consider this. I have absolutely no sales experience at all. I never held a sales position, never was in marketing, and never had to earn a living by commission. So, when I found myself having to sell with the MSP Alliance I was petrified. I thought I would never make it. But, what happened next was a real shock to me. I started talking.

Most good sales people (defined as those people who can communicate an idea without sounding like they are trying to sell you a 1976 Pinto) will educate their prospects during the sales process. Now I know for a fact that you small business owners understand technology. That's what you're good at. Put you in a room with other technicians and you'll feel right at home. So why not try this approach with your existing clients? Try scheduling 1 appointment with an existing client this week and make it your purpose to ask them how everything is going. Don't make it a phone call. Make it an in person meeting and really talk to them. Ask them about future expansion plans, talk to them about how they would like to see their technology do more for their business, inspire them to explore the boundaries of their profession.

You, being a good salesperson, will sit there and listen. Just listen. Take notes. Then, do what you do best. Talk about what you know and love. Talk about technology. Explain to your clients how you can liberate their business with managed services. Engage in an honest discussion about technology and business. Talk about your new offerings. If you walk away without having sold any new services, don't worry. Keep making these on-site meetings with all your clients and pretty soon you'll be selling more products and services than you ever thought possible.

Many of you small MSP business owners suffer from a common ailment known as "no self confidence." Know this. Having talked to so many thousands of you over the years, I have faith in you that you know what you're talking about. The thing is, too many of your clients and prospects don't know what I know. So, go talk to them. Just talk. And have a little faith in yourself.