Mid-Market or Bust: Upstream Growth May Be the Next Big Thing

FutureTech The first wave of B2B resellers came soon after the arrival of the PC. Those were the pioneering VARs who configured and serviced primitive yet extremely costly systems for their business customers. Some maintained retail operations where they sold the latest computers and provided basic training to help owners and employees get up to speed on these futuristic devices.  

Solution selling was a major transformation for the reseller providers. While hardware and software sales were still a common component, the sales process was more focused on building long-term relationships. Managed and cloud services and recurring revenue were merely subsets of this era.

The one thing that remained constant in those first two iterations was the audience. Small businesses depended on the technical and consultative support of their MSPs, and providers relied on the steady income of those clients to build and strengthen their operations.

The Innovation Tipping Point Approaches
What will providers do? The successful ones are looking and moving upmarket. 

That’s something MSPs and other providers must consider as SaaS/apps and self-provisioning devices gain momentum. In the coming years, firms may find their smaller and formerly dependent customers dropping away ̶ especially those with more basic computing requirements.

The doubters simply need to look around their neighborhood restaurants and retailers. Our local pizza shop is the perfect example. The owners recently opened a small winery in the storefront next door and decided to upgrade their point of sale and surveillance systems. They just went online and ordered POS and plug and play video equipment and was able to set it up without any help from their IT services provider. In fact, the co-owner cited the ease of configuring these systems, apps and online storage, not to mention the manufacturers’ support options, as reasons for ending their five-year business relationship with an MSP.

That doesn’t mean they can forge on alone. The business’ cybersecurity protections need upgrading, especially with the addition of cloud-driven POS and surveillance applications. But the owners no longer wanted their old provider’s “take it or leave it” comprehensive support package and recently signed up with an MSP who will deliver only the services they need.

That’s just one example of how innovation could lessen the SMB’s reliance on organizations. In fact, those small business transformations are becoming a frequent topic of discussion in online business forums and at industry events. Innovation may relegate MSPs and solution providers to the periphery: delivering the more complex or specialized services that organizations can’t procure through the internet.

Define Your Role
The commodity part of every provider’s portfolio is at risk. That means those simple, easy to support services could fall by the wayside as innovation diminishes their value ̶ especially with the more price conscious and low complexity SMB customers. Some MSPs have already gone that route, leveraging peer relationships and distribution partners to support their clients’ hardware and mainstream office solution needs. Expect more of those responsibilities to fall on the businesses themselves as SaaS, apps, plug-and-play systems and other innovations simplify installation and support.       
That’s why providers must evaluate their offerings more frequently today and consider adding services their customer can’t procure and support on their own. SMBs will benefit from specialized services such as cybersecurity, IoT, artificial intelligence, virtual reality, data mining and business intelligence.

Those portfolio options also play well with larger companies. With the shortage of experienced IT professionals and the rising cost of hiring and retraining tech specialists, corporations are warming to the idea of outsourcing services‒ something they would never have considered a decade ago. Advanced solutions experts are an attractive option.       

Virtual CIO services will also gain traction soon if not now. Every business needs a long-term technology plan to support its organizational objectives and meet current and future compliance requirements. It’s the perfect opportunity for IT services providers who understand workflow and policy development, and how to develop infrastructure and solution roadmaps.       

The bad news? All of this is closer than you think. Change is coming fast, and the incoming generation of tech-savvy workers is only going to accelerate the transformation. It’s time for those who haven’t already made the leap forward to get busy.    

Brian Sherman is president of Tech Success Communications. He served previously as the chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com