The approach may help us all transition to a hybrid business model
The best athletes in the world go back to training camp every year and focus heavily on the basics and fundamentals they’ve rehearsed and executed since they were kids. Once the basics have been perfected, the repetition begins to ensure any new concepts and plays become second nature and the muscle memory required to operate at the highest level is engrained – the athlete is ready to progress.
Although I’m a sports junky and follow all of the major sports, even soccer, I’ll focus on our national pastime – baseball.
Baseball is a good corollary as the game has been under pressure and is struggling to stay relevant as people’s attention spans shrink and the demographic is changing – baby boomers to millennials want the game to meet their needs not historical idiosyncrasies.
The Yankee’s | Twins wildcard game this week was great, but five (5) hours, come on…
The leaders in baseball and all other major sports are not sitting idly by, rather they are taking proactive steps, to adapt to the new realities of a changing consumer and marketplace.
ome examples include trying to speed up the pace of the game, shortening the overall length of the games, expanding into new markets, creating social media communities and streaming games to mobile devices.
Again, the underlying fundamentals of the game have not changed. Pitching, fielding and hitting are all still part of the game. In fact, the athletes competing in today’s sport are superior to those who competed five (5) years ago. But the game has changed and the managers and players have had to adapt to new rules and realities laid upon them by “the market”.
The franchises who’ve always run good businesses have continued to leverage their strengths and evolve what they bring to market to ensure they’re still profitable and relevant. Sound familiar?
Are the same Realities Hitting the IT Marketplace?
Those who compete in the value-added reseller (VAR), IT solution provider (ITSP) and managed service provider (MSP) space have solid franchises, however, the realities of a changing marketplace has caused many to struggle with what to do as their revenue continues to shift from transactional-based to subscription-based monthly recurring revenue.
Seeing the need for change, acknowledging you need to act and then forming the proper approach to seize the opportunity is quite another - change is just plain hard!
The good news is many channel partners have awakened to the need to adjust their legacy business models and move to a hybrid business model that allows them to provide solutions that customers can acquire and consume monthly.
Just as in baseball, IT providers moving to a hybrid business model need to make sure their business fundamentals are solid and that they’re fielding the right team across all positions.
Like Major League Baseball (@MLB) taking the lead in helping the franchisees see the need for change, so too will the information technology vendors, distributors and trade associations lead the way in helping VAR’, ITSP’ and MSP’ cross the chasm and create new hybrid business models.
Ultimately, the outcome needs to be businesses that can deliver the solutions customers desire – no matter how they want to consume them. All this provided by an organization who is as comfortable (internally and externally) delivering the solution as a one-time transaction or as a subscription-based contract.
Some Thought Leaders making a Difference
There are many vendors, distributors and trade associations in the marketplace moving their solutions or programs to monthly subscription-based offerings and models. There are a few I’d like to briefly point to as they’re truly making a difference and helping partners pivot their businesses with actionable programs and great solutions that are practical and impactful.
If you’re in the data availability space you’re certainly aware of Veeam Software (@veeam) and their innovative and market leading Availability Suite. However, you may not be aware of the work Veeam is doing to help channel partners adapt their businesses to the cloud and monthly subscription-based economy.
Their solution stack, which includes Cloud Connect and disaster recovery as a service (DRaaS), provides an exceptional approach to extend and expand net-new revenue opportunities within new and existing partner clientele.
The Westcon Group (@WestconComstor) has partnered with TelAgility (@TelAgility) to provide a unified communications as a service (UCaaS) solution powered by Avaya’s (@Avaya) IP Office. The group is extremely focused on helping partners move to a hybrid business model so they can exploit the opportunity being provided in the UCaaS space.
By the way, partners are seeing slightly north of 40% gross margins delivering this service utilizing a consumption-based model.
mimecast (@Mimecast) the cloud company that is making e-mail safer for business has built their entire business around the cloud. Although they do not have a large channel community as of this writing, they are looking to expand and drive sales worldwide and a solid channel will be necessary to keep growing at the pace they’ve been accustomed to since going public.
They’re already cloud centric and have an integrated e-mail security suite that is second to none. If you’re contemplating entering this space look at mimecast as they’re driving solid results in the cloud.
Lastly, let’s look at CompTIA (@CompTIA) who is the world's leading tech association, thought leader and spurs their members to act by providing key information, training and certification for their members.
Thier Cloud Community resources are solid and provide a ton of useful information. Any channel partner looking to exploit the cloud opportunity and monthly recurring revenue models should look at what CompTIA has to offer.
Look at any industry under pressure from external factors and chances are you’ll see some solid lessons you can apply on how to adapt your business to the forces and headwinds you’re dealing with in your business today.
Begin by assessing, analyzing, planning and beginning the journey to the cloud and beyond – the opportunity is now and it will take most of us twelve (12) months to create the instinctive muscle memory to become the digital athletes capable of dealing with monthly recurring revenue as easily as you do today with transactional revenue. Creating this monthly recurring muscle memory will serve you well in the coming years.
In closing, sorry to belabor the baseball analogy, but what the heck - we sit on the doorstep of the divisional playoffs and the World Series is right around the corner.
So, it seems only fair to use baseball as our poster child. My hat is off to Major League Baseball (MLB). Go Sox!
Stay Calm and Cloud On…