The current economic crisis is a monster – no doubt about that. If you are under the age of 80, this is shaping up to be the worst market downturn of your life. Cautious and prudent fiscal, managerial, and operational policy in our personal and business dealings is critical. But what many companies and managers, in the midst of a crisis like this, may not recognize is this: Downturns are significant opportunities that don’t come along very often.
I am not suggesting that the current economic situation is anything other than an unmitigated disaster–it is. Blame whoever or whatever you want for the mess we are in–government, mortgage brokers, Wall Street, hedge fund managers–everyone had a hand in it. We didn’t ask the hard questions when times were good. Home values were up, stock funds were delivering strong returns, money was cheap, and debt skyrocketed. We turned a blind eye to the fundamental economics that govern markets. Only after those very fundamentals reminded us just how far we had drifted did we stop and look around and ask each other, “how did this happen?”
Now we’re in a mess and the question everyone needs to ask themselves is: What am I going to do about it? How am I going to grow my company? Win new clients? Retain current clients? Make money? Grow revenue and profits? Invest in innovation?
Great Moves In Bad Times
HP’s was born during the Great Depression. Amazon, ridiculed and left for dead in the wreckage of the dot-com bust, rose from the carnage to become the innovative, industry behemoth it is today. IBM, during the downturn of ’79-80, bet big on a thing called the PC. Microsoft, a small software company that successfully weathered the downturn in ’90-91 emerged to become a household name around the world.
What did these companies have in common through tough economic times? Innovation. Vision. Risk-taking. Market awareness. Confidence. Belief in self.
It is critical to the current and future success of our collective businesses and companies to continue to innovate during challenging times. No IT channel companies are better positioned for innovation than MSPs. Indeed, MSPs have been on the bleeding edge for years. Now is the time to capitalize on those innovations and attack your competitors who have not made such investments relentlessly.
Stay Aggressive
Be prudent and manage carefully, but do not abandon the innovation and aggressiveness that is required, not only to persevere through the downturn, but to emerge from it stronger, faster, and further ahead of your competition. Don’t succumb to the temptation to hunker down and wait it out–let your competitors make that fatal mistake. Focus on your value proposition to your clients–reduced costs, high quality, predictable budgeting. The downturn plays to your value as an MSP–companies need what you have to offer.
In the book Outliers, Malcolm Gladwell illustrates that successful people and companies, through years of preparation and dedication, capitalize on that preparation when they find themselves in the right place at the right time. We, as MSPs, have spent the past few years investing, building, and learning. Suddenly we are confronted by a significant challenge, but one that we are well prepared for with a killer value proposition to leverage.
We are in the right place at the right time.
Justin Crotty is Vice President Services North America at Ingram Micro, Inc. He oversees Ingram Micro Seismic. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s 2009 Platinum sponsorship.
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Tags: Ingram Micro Seismic | Justin Crotty | Managed Service Provider | Managed Services | Outliers
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In this economy having the right attitude can be the difference between positive and negative cash flow in a given month. I do think Mr. Crotty is correct to point out that there’s no magic time (good economy, bad economy) to launch/build a great company. I just wish the banks would help a bit more with financing.
Justin what trends are you seeing with Seismic right now? More sign ups? Fewer sign ups? Different types of VARs signing up? Have you seen the economy influence the type of partners that are using Seismic? Sorry for all of the questions but we have a server system here and might go to hosted.
Steve – we are seeing significant growth in both partners and revenues across our managed services portfolio. 158% revenue growth in 2008 and the partner acquisition was very strong. Even more significant is the acceleration since the market meltdown in September – our growth in the 4th quarter last year set records for us. The economy plays well into the managed service value proposition for resellers to position to end clients – reduced cost, predictable budgets, high quality service delivery. Let me know if we can help you.
Justin thank you for your reply to me. I am the #3 person at our company so I will point our founders to the information you’ve shared. Our server system creates more problems than it solves. We’ve worked with both tech data and ingram for our distribution needs and seismic came up twice last month during a conversation we had about scrapping or continuing to enhance our own internal server. I don’t control the budget here but I do influence some of the decisions so we’ll see if I can move the seismic discussion along.