Speakers at this year’s 2015 SMB Nation Fall Conference, held October 2nd through 4th on the Microsoft campus in Redmond, Wash., all see light at the end of the cloud computing tunnel. They’re just not sure, as the saying goes, whether it’s an onrushing train or not.
According to author, blogger, and longtime MSP Karl Palachuk, the answer is no. Many SMBs are still doing business largely if not entirely on-premises, he said during a conference session on cloud migrations, and channel pros will be making good money for years to come moving them online and collecting margin-rich recurring management fees from them.
“There’s a huge, huge, huge, market out there,” Palachuk stated.
Microsoft, not surprisingly, agrees. Reselling Office 365 can be a lucrative source of one-time planning and onboarding revenues and integrating, maintaining, and enhancing Office 365 deployments with custom apps and workflows is an even bigger opportunity, according to conference speaker Tanuj Bansal, director of Microsoft’s Office 365 Commercial Business.
Harry Brelsford, founder of SMB Nation Inc., the Bainbridge Island, Wash.-based channel membership organization that hosts the SMB Nation conference, sees promise in that business model as well, but doubts it will be enough to compensate for the cloud’s relentless downward pressure on both revenue and profits.
“Cloud just fundamentally resets the economics,” Brelsford said.
That leaves old-school VARs and MSPs with a limited set of options, he explained during an opening day keynote: Sell out to a bigger competitor, switch to a new line of work, or transform their business into a high-volume, high-efficiency cloud service provider that serves a large and continually expanding customer base.
“Go big or go home,” said Brelsford, who counseled channel pros to cut costs ruthlessly by firing unnecessary employees and ditching their well-paid current engineers in favor of cheaper techs with the more limited skill set required to manage cloud-based infrastructures. Getting more targeted about sales and marketing is essential too, Brelsford argued, which is why several sessions at this year’s conference explored the latest technology-driven lead generation, scoring, and management techniques.
“If we can identify the top 30 percent of our leads that we want to nurture and let the other 70 percent go, you can probably get by with two less salespeople,” Brelsford explained.
Several speakers, however, said that channel pros will need to produce more leads, not just better ones, if they want to build a thriving cloud practice. That means accelerating and automating your sales and marketing processes, according to Chris Chase, CEO of Directive, an SMB technology consulting firm in Oneonta, N.Y. “Any organization that’s not doing that or preparing for that is going to fall behind,” said Chase, whose firm also offers a sales and marketing system for IT providers called JoomConnect that helps MSPs automate tasks like tracking website visitors, conducting email campaigns, and collecting referrals.
Brelsford’s company aims to help channel pros generate more sales leads as well through a new Web-based service called BizTechXperts that uses natural language processing technology to automatically direct SMB end users with IT questions to channel partners who have relevant expertise. “This is a big part of SMB Nation strategy going forward,” Brelsford said.
For their part, speakers from Dell Inc. and Ingram Micro Inc., of Round Rock, Texas, and Santa Ana, Calif, respectively, discussed services that cloud service providers can use to serve all of those new clients produced by their sales and marketing machine. Both CloudRunner from Dell and the Ingram Micro Cloud Store are designed to be one-stop-shopping solutions that visitors to a channel pro’s website can use to assemble, provision, and pay for customized cloud solutions on a self-serve basis.
Conference presenter Stephen Holt, meanwhile, showcased an alternative strategy for channel pros less interested in building a cloud-based business—collecting IT gigs via online freelance talent marketplaces like Work Market, OnForce, and FieldSolutions. Holt, an independent IT consultant in Bremerton, Wash., has found such services to be a dependable source of new opportunities. “I put my zip code in and orders start popping up,” he says.
Keeping orders popping, in or out of the cloud, is what Brelsford wants SMB Nation members focusing on now, at least if they hope to have a continued future in the channel.