Change is inevitable, especially in the IT channel. Over the past decade, the products, services and landscape has transformed, and an increasing number of companies outside the tech sector are now running head-to-head with the solution provider community. Those new competitors may come from adjacent industries or channels using cloud and vertical relationships to expand their presence.
Who are they? How can channel firms build more formidable defenses to counter these new threats? Those questions were addressed in the CompTIA Annual Member Meeting Power Talk session: Who are Your New Competitors? Moderated by Carolyn April, Senior Director of Industry Analysis at CompTIA, the panel of industry “change agents” shared several advantages and disadvantages of operating an environment that has gotten increasingly more competitive.
April highlighted several of the threats facing the channel. “Digital marketing agencies are flourishing, and that trend is expected to continue. Non-IT companies such as accounting firms, legal and medical professionals may have their own channels. The competitive field is really diversifying and, though everybody continues to talk about it, providers need to spend more time thinking about how they’ll compete.”
“Channels and markets are changing, we need to evolve and be chameleons,” emphasized panelist Matthew Hahn, Vice President of Technology of Network Services for SWK Technologies. “We’re see convergence from the voice and digital imaging space and others coming into IT. The upside is we can partner to provide new opportunities to our customers. Providers like us also have to morph to keep up and work with others when we can and it makes sense.”
Nate Olsen, Managing Director of Business Development for Insperity concurs and expands on that point. “One of the things we talk about is finding local professionals who can help us improve close rates. In fact, we close 14 times more business when we go out with a trusted partner like that. But you have to design a sales compensation plan so no one gets hit, regardless of whether they close the deal o all on their own or with partners.”
Stagnated ideas and rigid processes often get in the way, and allow new competitors to sneak in. A shift in philosophy may be the first step to protecting existing accounts and securing new clients. “In days gone by, we were wedded to tech,” said T.C. Doyle, Senior Content Director at Penton Technology Group. “Today you have to flip it. Providers must have the ability to swerve out of a particular lane to respond to their customers’ more specific needs.” He shared the example of successful provider who focuses on a rather unique niche; hair stylists in the Los Angeles area. The opportunity is huge, with more than 3000 of those businesses in the region, even though the solutions are fairly standardized. “His lane is catering to beauty shops and, though, most issues are tech related, many are not — and he’s making a killing.”
Rochelle Coleman, Director of Partner Strategy & Marketing for Concerto Cloud Services emphasized the need for channel firms to understand their role and limitations with clients and prospects. “Some companies come to us with no partner, no MSP and no cloud solution provider. You have to look at the value chain and see where you fit since customers are savvy, and know when you’re playing outside of your lane.’
Another door opener for new competitors is the lack of attention and concern for technology consumers. “User experience matters more today than ever before,” emphasized Marc Monday, Vice President of Global Business Development at Concur. “The reality is end users are key influencers today. The most successful partners uncover customer pain points and help them figure it out.”
So how do solution providers address potential threats? The consensus of the panel was a proactive approach is best; uncovering current and potential competitors and seeing how and where potential partnerships could be developed. “The channel needs to get closer to outside professionals and develop local relationships that can grow their service opportunities,” added Doyle.
The panel shared a tremendous number of tips, ideas and solutions to help IT services firms hold off unwanted competition (those not interested in collaborating):
- “Providers are better off being proactive and creating programs that work well for all involved,” said Hahn. “Play nice in the sandbox and identify those who won’t…and do your best to steer clear of them.”
- “Partnering is more the psychographic than demographic,” suggested Olsen. “Are they customer focused? Where will you expand and what’s the plan? We refer with accountants, law firms and MSPs. To be that true trusted adviser, you have to breathe the same ‘rarified air’ as others in that community.”
- Of course, the technology is still an important part of the equation. “It starts with interoperability, as everything has to work together,” said Monday. “The future is creating more connections and getting everyone more involved in the discussions. But it will likely get more, not less complex for providers and their customers.”
- Coleman highlighted what all those changes really mean. “Expect more convergence and acquisitions, and less channel. Digital, security, compliance and disaster recovery will play a bigger role and those who can partner or offer it on their own will be better positioned to compete in the future.”
