This is the fourth and final post in my series based on case study research done with ADTRAN customer Valley Business Solutions – VBS. They represent a great example of how channel partners are finding ways to reinvent themselves as their world of legacy telephony gives way to both Internet-based and wireless forms of communications.
In my earlier posts, I’ve addressed the business case for becoming an MSP – Managed Services Provider – and how this opens up new opportunities to address the real needs of customers as they too, struggle with today’s technologies. I’ve also addressed specific use cases for managed WiFi, which VBS offers via ADTRAN’s ProCloud platform. Most communications technology vendors now provide similar solutions as mobility increasingly becomes the environment of choice for businesses and their employees.
To bring this series to a close, I’ll summarize the VBS story in terms of three lessons learned. Needless to say, while this reflects well on ADTRAN, my intent is to provide this as an example that any channel partner can follow.
- Rethink the buying process
For legacy-based channel partners, IT has long been the point of contact for both buying and selling. Things are different with managed services, especially if you’re trying to be strategic. It’s one thing to sell managed WiFi to save money or make the network easier to manage, but it’s something else to sell it on the basis of solving pressing business problems.
VBS understands this, and along the way came to learn that it’s not enough to sell this to IT. By elevating the discussion into a strategic business-level solution, IT isn’t the only decision-maker when it comes to buying. More often than not, management starts driving the buying process when they see this strategic value. However, they may not be part of the initial discussions as a matter of course, and if you’re following this path, then you need to be proactive to ensure they become involved. IT’s needs are not always the same as management’s and this is a key area where channels can bring new value.
- Focus on risk mitigation
Businesses understand this, and management tends to frame decisions this way. Technology risk can be a major inhibitor for moving into the Nextgen world, and this is where the move to an MSP has paid off for VBS. When previously selling point products and services, decisions were made around the virtues of specific technologies or vendors. SMBs have their fair share of biases, perceptions, bad blood, etc. in this regard, and much of the sales effort gets tied up explaining or defending a particular recommendation.
By selling managed services instead, the discussion shifts away from these specifics and over to the applications that WiFi will support and how these will address pain points and drive business outcomes. This allows the channel partner to remove a lot of the customer risk from the decision-making, as that burden now shifts to the hosted provider. VBS put their faith in ProCloud to give them that capability, allowing the end customer to focus on addressing their business issues. No longer does the customer need to worry about getting locked-in to a particular vendor or technology, not to mention long-term financial commitment to a Capex investment.
- Understand the new business model
This may seem like the biggest leap of faith, but VBS has come to embrace the tradeoff that comes from moving to a smaller per-customer revenue base, but getting it on a recurring basis. Thinking particularly for SMBs, the Opex business model makes for easier decision-making. With cash flow often being a prime consideration, small but regular payments are more manageable and not dictated by capitalized budgeting planning cycles.
For VBS, this has advantages as well. First, they can pitch managed WiFi any time, since it isn’t tied to an annual budget review. Second, if VBS wants to be aggressive entering a new market or vertical, they can reduce the monthly customer price to win the business. They can earn this back over time, plus the incremental cost to add a new customer to their platform is nominal, so the financial risk is minimal. Finally, the recurring revenue model makes it easier for VBS to manage their growth since they don’t have to make major investments to upgrade capacity to support new business.
While VBS has become an MSP for WiFi, this is just one of many services a channel can offer by following this path. The key is to understand where the growth opportunities are, and wireless is certainly one of them. Equally important is to recognize the risks of sticking with legacy, both in terms of technologies, but also the business model. Nothing is guaranteed, but given how frequently communications technology is changing, your odds of success as a channel partner are greater by focusing on the business needs of your customers rather than the technologies they think they need.