"The major value we give clients is the ability to approach a situation in three different ways and help them on that path. We don’t realise how much we know." - Michael van Zoggel, ComputerCorp
GOS: Working for a vendor, the last day of the quarter is the last day of your life.
JS: A lot of us have gone through the same pain a vendor needs to, which is accepting the fact that you are taking monthly fees instead of large upfront fees. We’ve moved from that conventional IT integrator model, where you survived day-to-day on the projects you delivered. And it takes time to build the recurring revenue to balance that out. There’s a bell curve involved in becoming a managed services provider because in that fi rst year, you’re either investing in infrastructure or getting less money off your customers. That’s why it’s hard to change.
DW: It’s going to affect the whole channel. If you move to monthly billing, I have to do 12 invoices instead of one. The admin is 12 times what it was before. As a business owner, you’ve geared your business with commissions to be paid to sales people, there’s financing of what you’re putting on the table and then what you’re putting in for the customer. You can’t do it straight away, it’s too hard, you’d have to shed people and resources.
KH: Managed services have become far more of a focus, and vendors are recognising the people driving these solutions are using a different licensing model, and fi nancial models.
GOS: Every one of you go to market with a managed service that’s different. So if we just listen to one or two partners and drive it that way, the next person is going to come along and want to do it differently. You have to be flexible, nimble and accommodate the managed services portfolio in the channel.
TD: I don’t want to oversimplify things, but in managed services, your revenue is based on your customers paying you monthly. What we do is have our customers pay for our product monthly. It’s not a complex situation.
DW: It’s not complex for you, because that’s how you started. It’s complex for an organisation that hasn’t sold in that way before and who has to flip.
KH: One of the bigger challenges is our software is just one component of the larger MSP offerings in the market. Every one of those vendors has a different licensing structure, and the MSP has to manage all those at the back-end.
RM: I’ve worked for 3-4 vendors who have transitioned from direct to indirect models and the hardest thing to change is the culture. They can change systems at the drop of the hat if the revenue opportunity is there. But if you really want to change the way they do business, it’s not until they transition out an entire sales force that you see something happen.
NC: Is scalability an issue with managed services?
SA: It is an issue, but it’s a lot more scaleable than the break/fi x model: When you put on 10 more customers, you’ll need two more engineers. At least this way you can leverage competencies you’ve put in place and utilise those at a much better ratio.
GM: In the security space, I’m yet to see a platform from any vendor that can be vendor-agnostic. We built our own and today, we still need that. If you sign a client with 2500 devices out there, you’re going to need to do a forklift upgrade in your datacentre because it won’t cope. Whereas if you have a flexible platform to accommodate that growth through virtualisation, it’s a great story.
JS: We use a number of different technologies. It’s not easy, but that’s what we do – it’s complex stuff. You have to put the right technology in, fi t for purpose,to solve a specific problem.
GM: You can do all the planning yourself, but then the fi rst customer you see is going to blow that out of the water because they want something different. If you do not accommodate that with scalability, you have to take that on as a cost.
CB: There are two sides to this question: How do I scale for a new client, and how do we scale existing infrastructure to provide services for existing client growth. That goes back to why our vendors need to be as nimble as us. For example: A client logs onto our website and orders five more users at $300 each and they get Microsoft Office or whatever is it delivered to them, or I hit my capacity when I need more hardware and I log onto Vasco website and order five more tokens and they get delivered out. The flexibility on that side and my side, need to link up somewhere in the middle.
