MSPAlliance VAR Protection Program

Dell and Ingram Micro both stated this week that demand for information technology was on the decline (you can read the full article here). Let's take a moment and examine this statement.

Both companies are obviously expressing some concerns about the future to their shareholders. Much of this can be explained by the recent financial occurrences on Wall Street. However, it would be incorrect, in my opinion, to say that weakening business consumer demand for IT products (like those sold by Dell and Ingram Micro) is an accurate assessment of IT services (like those delivered by IT service providers, aka MSPs). In fact, most MSPs are reporting no appreciable decline in IT services being sold to their clients. True, larger projects involving hardware and consulting fees may be on hold for the next quarter or two, but this is not representative of the entire revenue stream for many MSPs.

Therefore, in order to help do its part in this economic crisis, the MSPAlliance is announcing a VAR protection program to help alleviate the pressures these companies have been facing for the past decade. The MSPAlliance will help all VARs eliminate their dependence on shrinking product margins by educating them on a new way of earning revenue. This ground breaking program includes helping VARs add IT services revenues (primarily delivered by the VAR), thereby improving margins and strengthening relationships with clients.

In short, the heart of the MSPAlliance VAR Protection Program rests in its ability to transform VARs into MSPs.

Tough times for VARs, but what about MSPs?

I thought this topic was important enough to write about given everything going on in the financial markets. An article today proclaimed tough times ahead for VARs as businesses are cutting back on IT spending. Now, here comes the bad news. If any of you reading this are still pushing product as your sole source of revenue, this is the day we've been warning you about.

Remember all those times when people used to say, the days of being a pure play VAR were over and that you need to think about adding services to your revenue mixture? Well, that day has come. The one silver lining in all the bad financial news is that IT services spending appears to be static. Sure, projects and big tickets items might be put on hold but companies cannot afford to cut back on their IT services budgets. Let's face it, most companies cannot stand to see their IT performance decrease at all. If anything, they need their performance levels to increase even if their budgets are decreasing.

So all you MSPs out there reading this, be thankful you aren't a VAR anymore.

The Channel, an Afterthought

In the last few weeks it seems like I have read several news stories about major vendors announcing products with little to no mention of the channel. Some might think nothing of these occurrences but I tend to think a lot of them.

So, here is my question for all of you who live and work in the IT channel. When a vendor launches a major product that clearly can be sold (and likely will be sold) through the channel and does not make mention of the channel does this upset you? I'm not trying to play armchair psychiatrist here, just trying to get a feeling for how the IT channel views itself.

The role of MSP and vendor is a difficult one and I imagine much discussion has (and should still) taken place on this subject. But I don't seem to hear anything coming from the IT channel (save for a few loud yet isolated voices. Does the IT channel view itself as powerless? Does the channel believe that the status quo will never change and that change is impossible so why try?

I'd really like to hear your thoughts.

The Trusted Advisor

I have been seeing the phrase "trusted advisor" creep into the everyday parlance of the IT channel for a while now. Up to now, it has not really been an issue for me but there are some things I'd like to address (and hopefully hear from you MSPs out there) on the record.

The concept of a "trusted IT advisor" is one I wholeheartedly agree with. There is nothing I would like to see more than the reality of a Managed Services Provider serving as the trusted advisor on all matters IT. However, I believe there are too many people out there throwing around the term "trusted advisor" and I'm worried that it will quickly lose its meaning if we don't address this soon.

Most of the references I see to "trusted advisor" are made in the context of marketing or sales talk. Hire me because as a trusted advisor I can do the following... This type of talk is designed to make the client feel warm and fuzzy and totally at ease with the idea of giving over control of their IT to the IT service provider.

Again, I have no problem with the concept of handing over control of IT management to a third party. In fact, I have a third party has been handling my organization's IT management for a number of years now. But it would be a mistake to assume that every IT service provider is a trusted advisor. Allow me to clarify. A person/company may in fact be trustworthy but that does not always mean that a new client will trust them immediately. Trust is earned and almost never given immediately. Trust is something that grows between people and organizations. To throw around the word as if it was synonymous with low pricing or half off sales is a bit naive and insulting.

Many professions have worked hard to improve the trustworthiness of their members in the eyes of clients. Professional creeds, codes of conduct, rules of membership, all can be effective mechanisms for enforcing membership behavior as well as marketing the overall professionalism of the membership to the outside world. This is precisely why the MSPAlliance has The Managed Service Provider’s Code of Ethics & Conduct and a Consumer's Bill of Rights to announce to everyone just what to expect from a MSPAlliance member. While the characteristics discussed in these documents are essential qualifications for any MSP doing business it is important for all business consumers to engage with a MSP knowing that trust must be built. The foundation for doing business can and should exist given an MSP's adoption of these ideals (as each and every MSP joining the MSPAlliance must do) but this foundation is only the beginning of the relationship.

So, the next time you encounter someone who says they are a "trusted IT advisor" ask them on what basis they make that claim. Make sure it isn't just another marketing soundbite.

More Green for Google

No, not money, although it probably will translate into that as well. This story about Google's attempt to create a new type of data center powered by ocean waves is just one more example of the fast growing movement towards green IT we are seeing in the IT world.

The green IT movement, such as it is today, may be primarily a marketing spin by companies, but the time is fast approaching where the intersection between marketing and utility will meet. Some of you MSPs may think that green IT is a concept useful only to larger companies. To be honest, I think green IT has more to do with you and your clients than the bigger companies. Sure, big companies have big carbon footprints. But when you examine the totality of the SMB market, there is more waste and inefficiency there than in the mid market or large enterprise sector.

In the next few months you'll be seeing a lot more about green IT from the MSPAlliance. Stay tuned!