Vendors have an incredible partnering opportunity too!
The small business market is the prime target for MSP’s and IT Vendors who are committed to growth. IDC and Gartner suggest that SMB (less than 1,000) employees account for almost half of the worldwide IT spending. These estimates represent approximately $150B in annual IT revenues in the U.S.
To sell and support the SMB clients, IT Vendors need to rely on the IT Channel as orchestrated by the MSP. In turn, MSP’s need to have the pulse and respect of the SMB owner. The energy flow of the selling and supply chains flow from the end client through the MSP to the IT Vendor. This flow is a complete reversal from the last 35 years of the IT Channel. The Channel has moved from “Vendor Out” to “End Client In.” In other words, what the client’s needs and wants are is much more important than what the vendor community has decided to produce.
Large enterprises place their trust in the vendor and its reputation. Remember the old saying, “No one gets fired when recommending IBM.” Large companies have staffs to identify and evaluate vendor offerings. Decision processes are highly structured and capital planning cycles are five years or more. The point of integration for IT is the customer IT staff.
Small Businesses have the same appetite for technology-inspired innovation and IT-leveraged organizational improvements but approach technology investments very differently. They cannot afford to structure careers for IT professionals. Why should they when cloud-based, SaaS applications are readily available and fast to implement. The only problems are which app and how to integrate?
According to CompTIA’s Small Business research, the two highest uses of technology are for:
- Enhanced Customer Experience – 38% ranked as #1
- Improve worker productivity – 24% ranked as #1
In addition, CompTIA reports that 40% of small businesses think that they are NOT spending enough on technology. And only 43% are regular users of an outside technology provider.
Without the internal staffs, the small business owner must rely on outsiders. As a small business owner once told me, “When making IT decisions, I want to look across the table and see the eyes of another small business owner on my virtual team. With this kind of relationship, I am confident that my IT provider knows both what drives me and scares me every day.”
Selling to Small Business owners has advantages. Small businesses have:
- One decision maker and simple objectives.
- Relatively simple business structures and revenue models.
- Short decision time frames.
At the same time, small business owners expect the MSP to:
- Speak the owner’s language. Understand the business and its success factors.
- Be proactive and strategic.
- Be a source for technology information, an educator.
- Deliver measurable results.
Unfortunately, most MSP’s are spending their customer-facing time on operational infrastructure metrics. Instead, the conversation needs to be about growing the client’s business. When the conversation switches and the investment choices are identified, the owner’s decision making is based upon three factors which are influenced by the Virtual CIO, the MSP:
- Trust (personal and organizational) – the MSP must earn this trust over the span of many transactions. Build your reputation with small steps before tackling the giant leaps.
- Alignment with Business Model – today more and more MSP’s are specializing on one or more verticals to learn and apply applications, especially as these applications related to enhancing the client’s customer experience.
- Collaborative Spirit – the small business owner needs to regard the MSP as an equal, a peer respected for success as well as a strategic service provider.
In summary, small business is a large aggregate opportunity. MSP’s and their core vendors are well positioned to serve the needs of the small business owner. To do so, however, the MSP needs to build a trusted relationship with the owner, deliver on short-term promises, and learn what makes the client’s business tick. In doing the above, MSP’s need to develop nurturing skills and techniques to build this trusted relationship Nurturing takes time, but the investment is worth it.
About The Authors
Robert G. (Bob) O’Malley has over 35 years of experience in the information technology industry. In his career, O’Malley has lead manufacturers, developers, distributors and integrators as CEO, General Manager and in other senior executive positions. Over the last 25 years, O’Malley’s specialty has been in the development of IT-oriented channels of sales, support and distribution.
O’Malley started his technology industry career with IBM as a sales representative advancing to executive positions in sales management, financial management and product management. He also served as CEO of Immersion, Pinacor and SED, and as President of Intermec Technologies and MicroAge.
O’Malley has leadership experience in all components of the IT, POS and AV sales and support channels. He also served on the Board of Directors of CompTIA, the leading IT industry association, where Bob was Chairman of the Board from 2008 to 2010. And in 1998, he was one of the founding Board members of the Global Technology Distribution Council (GTDC). In addition, Bob participated in the InfoComm 100 in 2010 and 2011. Throughout his IT/POS/AV career, he has had experience in integrating acquisitions, managing culture change, creating business model innovations and launching new products.
O’Malley also has global experience in sales, product marketing, operations and supply chain management. In 1992-3 with IBM, he spent two years living in Tokyo, with general management and P&L responsibility for IBM’s Asian PC, printer and desktop software businesses. And with Intermec, Immersion, InFocus and SED, he had worldwide sales, finance and logistics functions reporting to him.
O’Malley currently is a Principal with the Achieve Unite team of channel advisors. He also serves as a Board Advisor to TopLine Strategies. Bob holds a BS degree in aerospace engineering from the University of Minnesota, an MBA from the W.P. Cary School at Arizona State University. He was also an instructor pilot and Captain in the US Air Force. During his IT career, O’Malley has been an active board member for a variety of professional, charitable and civic organizations.
Theresa Caragol is founder and principal consultant of Theresa Caragol Consulting, LLC, and Achieve Unite a strategic advisory firm that provides business acceleration services to global enterprises including partner and channel development, go-to-market planning, M&A channel integration and executive learning forums. She has more than 20 years’ experience in building and managing multi-million dollar indirect channel teams and strategic alliance business and programs from inception to sales success. Prior to founding TCC, Theresa held senior executive roles at Extreme Networks, Ciena and Nortel.
Theresa is passionate about coaching employees and mentoring young people into STEM fields. She is honored to be one of 15 women selected for the First Leadership Foundry in Washington, DC – an organization dedicated to mentoring and recruiting women for positions on corporate boards. Theresa has received numerous IT industry channel accolades recognizing her work including: 2014 CRN Top 50 Most Influential Channel Chiefs, 2013 CRN Top 10 Next Generation Channel Leaders, 2015 Golden Bridge Gold Award for Best Program Leader.
Theresa graduated with honors from Virginia Tech University. She has an MBA from the University of Wisconsin’s Lubar School of Business, and holds an Executive Master’s degree in Leadership from Georgetown University’s McDonough School of Business
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