IT and Business Insights for SMB Solution Providers

Finding a Winning Formula with WLAN in the SMB Market

Small companies with complex WLAN needs provide legitimate inroads for MSPs—if they can deliver a sensible service at SMB-friendly prices. By Wayne Newton

Small companies with complex WLAN (wireless local-area network) needs provide legitimate inroads for MSPs—if they can deliver a sensible service at SMB-friendly prices. Anyone who reads Karl Palachuk knows it’s a harrowing but hopeful landscape for the little guy that serves other little guys. Ask around elsewhere in the managed services industry, and you will find a model for growth for servicing SMB WLAN management needs.

Opportunity lies in the underserviced small business that wants to outsource its WLAN management at an affordable price point. This type of company does not want, or need, full-time IT staff, but often runs in to MSPs, even those with so-called SMB-focused offerings, pushing primarily enterprise-scale solutions on the menu. Not all SMBs are created equal, and the companies at the smaller end of that scale (less than 30 employees) are the ones being assigned solutions far outside their needs.

Why would a small medical practice with four or five access points need enterprise hardware?

Enterprise hardware should be reserved for the large MSP that manages 50, 60, sometimes 100 WLAN networks. Enterprise vendors, like Cisco Meraki, are the easiest way for MSPs to make servicing SMBs make sense—namely, it’s a service model that relies on volume due to low margin and high licensing costs.

The SMB customer presents a profitability challenge for MSPs that rely on low-margin enterprise WLAN management tools, unless they deal with a high volume of customers.

Basic SMB wireless needs overshadowed by new IoT needs

Enterprise solutions might not be the best fit for the SMB WLAN, but they dominate the narratives in the WLAN space. That is not to say the emergence of IoT devices isn’t worth covering, but there’s more to the story in small office WLAN. There are SMBs out there that still need to address basic network segmentation needs, including the same BYOD and compliance issues large companies have dealt with for years.

Steady demand for WLAN in the enterprise space due to IoT overshadows SMBs that need access to affordable WLAN management. They should not be treated the same; that ever-growing enterprise market is expected to hit another growth spurt. Research forecasts are calling for 30 percent CAGR in the next five years, with IoT becoming mainstream in North American offices. Enterprise has its own solutions, SMBs need theirs.

The small business sector is also growing rapidly and should not be ignored. Small business offers a big opportunity with more than 28 million companies as prospects, which accounts for 54% of all U.S. sales – and Wi-Fi is now the preferred connectivity method in the office and for mobile access.

Many small companies still struggle with what MSPs see as basic issues - reconciling BYOD, guest Wi-Fi segmentation, online point of sale, and the compliance issues related to managing a relatively small but complex WLAN setup. The enterprise space dealt with this a decade ago.

Companies that designed cloud-managed access points on the leading edge of solving WLAN complexity—Meraki, Aruba, Ruckus—were billion-dollar acquisitions for Cisco, Brocade, Juniper, HP, and Dell EMC. These vendors focused on building enterprise WLAN gear and left small business behind, while others recognized the new opportunity for purpose-built products for the SMB market segment. Products designed to meet specific business requirements of small business that are not over-engineered, providing customers with enterprise functionality and only the features they need – at actual SMB prices.

With the deployment of all the latest technologies and influx of devices in the workplace, channel IT companies need to remember the growth opportunities with modern-day SMBs. Small businesses are under pressure to deploy new or upgrade current infrastructure to support the new 802.11ac Wave 2 standard and need guidance who understands their unique environments.

It is hard being complex but small

Every company wants a secure, reliable wireless network. This is true across all verticals, regardless of the number of seats in a business. MSPs sense demand from SOHO networks and explore ways to deliver because mobility and connectivity are non-negotiable for them - no less than at a firm in a Manhattan skyscraper.

“Organizations that understand what technology does for their business usually invest in an infrastructure that allows them to get the most out of their people,” explains Steve Martocchio, VP of Operations at Cooperative Systems, a Hartford, Conn. full-service IT company. “The better we can be at minimizing and eliminating the one-off, non-standard technologies in our customer environments, the better and more consistent our service delivery can be.”

Small MSPs and hybrid VARs can profit by selling appropriate solutions for their clients

If you’re an established player with 50, 60, or 100-plus clients, using enterprise solutions across your client base might work for you. Consider the alternatives, though, before shelling out top dollar for licensing. There are other, potentially more profitable, ways of servicing client WLAN.

“The very pricey licensing model is getting a bit tired given the competition that's afoot now,” says Lee Badman, a small-shop MSP and prominent industry voice. “With thin margins and a model that doesn't allow for lots of costly site visits, profitability depends on the MSP's understanding of wireless and ability to execute based on each site's requirements.”

Much of it comes down to your chops as a MSP. Badman adds: “I don't personally know of anyone in the US making a real go as an MSP based on re-flashed or white-box Wi-Fi. I'd love to see more of it, personally. But as I said before, it will come down to business acumen as they build brand recognition and a viability story against established market names.”

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