Three weeks back I was at the Microsoft Worldwide Partner Conference (WPC). My desire to get more educated in the “IT space” started about a year ago when many of our clients started asking about entering the IT space. I did have a $50 million professional service budget in my last assignment at IKON, and had direct P/L responsibility for two of IKON’s last technology company located in Columbia, SC and Upstate NY, but a lot of things change over seven years and I thought I owed it to our clients to get “re-educated.” To accomplish that goal I have attended six large IT events over the last year and I am scheduled to attend Salesforce’s “Dream Force” in San Francisco in September. I’ve attended dozens of seminars and spoken to dozens more vendors at these events and through webinars and follow-up calls.
Here are my most relevant “take aways” from my year of education:
• Saying you’re in “IT” is like saying you live on Earth: Are you an ISV, SI, MS or one of numerous other categories of IT. Do you sell DaaS, IaaS, SaaS, Telco, video, or something completely different?
• These guys are highly technical; that should come as no surprise but they are really good at what they do and they are really good at knowing what they cannot do.
• IT Vendors don’t try to be all things to all people; they are vertically or horizontally focused and with niches inside of that focus. For instance, they integrate Office 365 into small businesses and they are experts at conversion to the cloud offering. That is a really narrow focus but there are companies that fit that narrow niche.
• The IT World is constantly going through massive change: Massive. That provides entry points for new competitors but it also means you have to stay educated to be relevant.
• Managed services in the IT world, no disrespect, is like being a non-authorized copier dealer. You are at the bottom of the barrel in margins and prestige.
• The “Cloud” isn’t about directly saving money—as the general press positions it—but more about speed of delivery. It’s a fairly easy concept to grasp now that I have some education but to make it simple I can be using salesforce.com in my hypothetical 100 person company before I finish this paragraph simply by going to their website and enrolling. Yet if I wanted to install an onsite CRM it might take me a few months to get the server and then install the software. To take it to the extreme I can open an instance on AWS or Rackspace in minutes to test a new application I developed or want to try and it could take a year to justify an ROI to get the equipment for an onsite test. The cloud is all about speed, scalability, and convenience.
• In a short period of time nobody is going to be buying software. At our ITEX show we have vendors selling software; at these IT shows the vendors sell “access.” You don’t buy a document management software to load at a customer’s site you buy licenses to document management software “in the cloud.” I am simply using document management software as an example
• And my biggest take away? When a copier dealer enters any aspect of the IT space they are in for brutal competition. These guys eat their own. Two years ago a VAR would buy capacity from RackSpace, load Office Enterprise and sell licenses to small companies in a SaaS, or what we call today cloud, offering. Now you can buy that service directly from Microsoft or you can buy GoogleDocs.
I was also amazed that I did not run into a single person I knew from the “copier world” at any of these events. My amazement comes from the fact that entering the IT space, whether managed service or IT services, is talked about at every dealer meeting I attend, yet I didn’t see a single copier person at these big IT events. (I am happy that you all depend on SD for your educational needs!)
Other than working with Strategy Development, what would I recommend if you want to get into any aspect of IT?
• Get educated on the space. Doesn’t it make sense that if you are going to try to add an entirely new product or service that you understand the space?
• Choose a product or service that you can sell to your customer base. Since most copier companies have a very horizontal approach, selling to anybody, chose a horizontal offering. By selling to your customer base you will insulate yourself from some of the brutal competition in the market.
• Hire to a new model. You need technically proficient sales professionals who understand business. This sales team is going to be going in and talking to companies about how they can improve their business processes: they aren’t selling bigger, better, faster, same price.
• Look to SaaS providers and outsource wherever possible. If you want to offer managed services you can outsource the NOC and helpdesk. Once you get the economies of scale you can bring the work in house, it it even makes sense at that point.
• Invest in an engineer; in the copier space you sell the device to get the service but if you are entering the IT space as a managed service provider you will want the project work if you are going to earn a fair margin. You need an engineer for the onsite work that the NOC or helpdesk cannot address but you’ll really need this position to sell project work.
• Make certain your engineer has the correct and up-to-date certifications: Start with Microsoft.
• Buckle up—you are entering an established industry that constantly changes and you will absolutely get knocked around as you get yourself up-to-speed.