SMB customers are seeking IT partners that have mastered business analytics, unified communication & collaboration, business process management, mobility and infrastructure alignment, according to AMI Partners. Moreover, US-based SMB customers will spend $50 billion on cloud services in the next two years, AMI estimates. Among the 72,000 channel partners in the U.S. who focus on the SMB segment, AMI says only 20% are currently proficient in two or more of the high-value competencies (HVCs). Translation: It’s time for MSPs to polish and adjust their skill sets.
AMI analysis indicates HVC partners drive three times the market opportunity compared to other SMB partners, and the margins they derive from these key solutions are about 25% higher than other partners. In addition to the five competencies listed above, AMI also says HVC partners are distinguished by their mastery of cloud technology and services. HVC partners are much more likely to be committed to the cloud, and are also three times as likely to already be experiencing success in the cloud from a business and financial perspective.
The other key factor which AMI says sets HVC partners apart is their choice of SMB clients. HVC partners tend to work with SMBs in high-value industries, including financial services and healthcare. The breadth of product offerings, coupled with vertical specialization, allows these partners to cater to a more sophisticated SMB clientele, helping them drive operational efficiencies, enhance productivity and reduce IT complexity.
Competency is What You Make Of It
When it comes to cloud technology and services, there really is no excuse for a modern MSP to be anything less than fully competent. Cloud computing is rapidly spreading from large enterprises to smaller ones, and in all likelihood the cloud will become the de facto IT architecture in a matter of years.
That said, competency in other areas is really what MSPs choose to make of it. While AMI has some convincing data about the importance of being competent in certain business areas and serving certain types of SMB clients, these specifics are less important. The lesson MSPs should take here is that it is critical to master certain areas and certain business verticals in order to maximize your success. Being a “jack of all trades” may widen your client list, but you will also find it very shallow. Your more successful peers will be swimming in narrower, deeper waters.
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Posted In: Managed Services | Platforms | SMB Technology | Software as a Service and Hardware as a Service
Tags: AMI Research | Analytics | Business Analytics | business process management | Cloud computing | Cloud Services | infrastructure alignment | infrastructure management | Managed Services | mobility | SaaS | Small Business Technology Spending | SMB Technology Spending | technology research | unified communications
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Are HVC’s relevant to most SMB’s, Dan? I wonder.
The AMI study cites “SMB customers are seeking IT partners that have mastered business analytics, unified communication & collaboration, business process management, mobility and infrastructure alignment”
Well I can tell you that few clients of most MSP’s can define any one of those terms. Those are enterprise-level terms that few VAR’s ever hear as relevant to an SMB’s conversation. Especially in the under 50 users market.
The cloud itself, is a complex system that few but the largest enterprises truly understand. Many SMB’s don’t even realize they are in the cloud!
So I’m pretty sure the HVC model isn’t for everyone, which is why only the top 2o% are proficient in 2 of the 5 competencies. Just not relevant to the marketplace.
It might be relevant for tech-intensive financial and Healthcare industry verticles, with their high-compliance requirements, but for most MSP’s – who need to straddle several verticals – the HVC model may not be feasable.
Especially in relation to the resources required to master sophisticated verticals where the higher margins are, in this economic environment.
Let’s just say the HVC model is probably not for everyone, though it sounds nice.
Larry,
Thanks for reading and raising some good points. Even if you don’t focus on the five high-value competencies there is another way to look at the conversation:
1. Business Analytics: You can start with the real basics — Google Analytics to see who’s visiting the customer’s site and why.
2. Unified Communications: Agreed, many small businesses have never heard of unified communications. But they all need phone systems and many need collaboration software. So, VoIP and shared meeting software could = good first step.
3. Business Process Management: Sometimes involves complex software. But what about some basic business management software to help SMBs remain responsive to customers?
4. Mobility: Maybe the SMB can’t afford a full-blown mobile device management strategy, but the MSP can still offer basic vendor management to help the customer trim smartphone and wireless costs.
5. Infrastructure Management: The bread and butter of most early MSPs… keep those servers, desktops and network devices humming along.
My key point: You don’t have to take the AMI list literally; there are ways the list can be refined to serve even smaller businesses.
-jp
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