Datacenter.jpgWhen I first started my MSP back in the early 2000’s the “guys” that were really progressive were renting data center space, installing servers, managing the “back end” and providing “hosted solutions” to their customers before the marketing term “cloud” even picked up traction.

Back then, not many were willing to go down this road on their own as a massive investment in time, capital, and ongoing labor was needed to make that happen and many were still concentrated on on-prem solutions.

Fast forward to 2016 and the market is completely different. The cloud wars are going on between Amazon, Microsoft, Google, etc and there is this divide in the market.

The “Old Guys”

You have the guys who started their IT/MSP shop back when I did in the 2000’s still clinging to owning, managing, depreciating things on their own. Some of those people are unwilling to see the changes that are happening and just going along. Some of those guys see that it is extremely hard to see ROI now that lesser expensive and more robust solutions are out there which they can’t compete with on their own and migrating out of the old model as fast as they possibly can.

The “In Between Guys”

You have the guys that started their IT / MSP’s at the mid to late 2000’s. These people say they have done some stuff in a local Data Center and thrown some servers up and say it’s not that “hard” and that they should keep on scaling this way. These guys are still running from the old playbook and don’t seem to see the market shift. At as small level things may work but at scale the time, expertise, and money needed to do more, get bigger is not in their view. They understand cloud is out there but afraid that not being able to touch things means they can’t make it work.

The “Bleeding Edge Guys”

Then you have guys who have started their IT / MSP’s within the last 5-8 years or guys who have looked at the market and understand that they need to keep moving along with it to stay competitive. These are the people that understand that change in inevitable and if you understand the options and use them to you advantage you can keep margins, become more aggressive, and be constantly viewed as people who are on top of what’s going on and the go to people to work with. It is not uncommon to see new players from this group called “born in the cloud MSP’s”.

The Point

So what does this all mean? Well, the whole point of being in business is to make money right? Nobody is here to work for free. Technology is going to continue changing and the “race to the bottom” will never stop or as some call it “The Commoditization of IT.” The only way to look at this and stay sane is understand the market for what it is and use the tools, vendors, and platforms around you to be better.

Example

When Microsoft started offering what ultimately becomes Office365 and proving Exchange Online for $4.00 per mailbox per month many IT / MSP’s said how can I make money doing this. There is no way I can compete with an on-prem exchange server at that price. Exactly, be smart and simply bundle Email-as-a-Service into your offering and dump those on-prem email servers that are a TOTAL time waster. Don’t go and put exchange servers in a data center and then try and be Microsoft. It makes no sense as the scale needing to make the numbers work will never be there.

The same can be said for Unified Communications or Voice. It makes no sense to take a customer who you installed an on-prem solution for and put a box in a data center and think you can compete at scale with all of the cloud pbx offerings out there. The numbers will never work at scale. SCALE is always something that people struggle to understand, plan for, and deal with once it hits them. Here at BVoIP we hear it ALL THE TIME from all over the world, literally. "Why should we work with you when we can do it on our own?"8 out of 10 of the guys who tell us that come back within 10-12 months and want to talk again. Was it worth it? Did it make sense to go learn the hard way? 

 Moral of the Story

It does NOT make sense to build it, manage it, depreciate it, keep it working all on your own. Be smart about where your time is best spent. Don’t get sucked into the idea that just because you can’t touch it that it doesn’t work. Use the market to your advantage and spend your time find the best mix of technology, vendors, platforms, offerings that you can consolidate and bundle for your customers. Be the strategic manager who can guide your customer’s through the options rather than being so consumed with the system that you miss the boat all together.

PS

Can you tell I love to use quotations?