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The IT channel is poised for monumental change, and a lot of the existing players, whether they are traditional IT partners or others, need to prepare for what’s to come. With advances such as the Internet of Things, artificial intelligence (AI) and SD-WAN looming, many channel players are still struggling with how to monetize the cloud and how to deal with the “Who Moved my Cheese” element that is happening in the industry today.

Even the MSPs you’d think are best positioned to adopt cloud models still fear the cloud. It is the main issue that keeps them up at night, according to trade association CompTIA’s Fifth Annual Trends in Managed Services report. As long as they fear the cloud, it’s hard to pivot to it and take advantage of its service and profit opportunities.

Otherwise, the current channel risks becoming irrelevant as IoT, automation and AI opportunities start to pop up. As technology becomes more dependent on software systems, the need for hardware deployment, maintenance and upgrades diminishes, which means traditional channel players must adapt to new service-based business models.

Existential Threat

You might say the IT channel faces an existential threat. VARs that have built businesses and careers on break/fix work and MSPs that have mastered remote monitoring and management need to figure out how to parlay their expertise and skills to selling and maintaining cloud services (some of which they don’t operate or control).

As on the data communications and voice side of the equation, there will be a need for upfront implementations, but, after that, the software takes over and the engagement with customers becomes almost exclusively a software play. No wonder CompTIA Chairman Todd Thibodeaux said in a recent interview that new entrants into the channel “are much more like telecom agents.” This is a pretty profound revelation.

Unlike IT channel companies, whose founders usually have a technical background, Thibodeaux said, “they're not purely technical people. They might come in with a little bit more of a business mindset.”

The change so many of us have been talking about for so many years (and me for 15 now!)--that the channel eventually will become a services-centric enterprise--is now finally here. The need to focus less on technology and more on how to support business requirements and goals isn’t an abstraction; it’s reality, and it’s what telecom agents have done for many years. Physical infrastructure is moving to the cloud as businesses divest themselves of most of their internal hardware and infrastructure, so their needs naturally are changing.

The question, then, becomes how traditional IT partners can change to address those needs. Some are bound to make the transition successfully to a role that is bound to resemble a telecom agent. Those that cannot make the transition are bound to face some serious struggles as IoT implementations, digital transformation and automation create a whole new IT and communications reality.

As Thibodeaux said, 15 years from now service providers may have to maintain robotic systems, IoT and smart power grids. “They'll certainly be a lot different than those who maintain servers and desktops and notebooks and stuff today.”

Hybrid Models

Luckily for IT channel players, the barbarians aren’t at the gates yet. We don’t fully know how the new “channel partner” will take shape, though we know it will be much more focused on services and customer business outcomes. Maybe it will be a hybrid of VARsMSPs and telecom agents. Or perhaps the model will come from elsewhere, possibly outside of the IT industry.

In a previous blog, I wrote about the emergence of new types of partners--the “influencers” who work in ancillary industries and are in a position to throw business your way. It’s possible the new channel model will have elements of these influencer businesses as they become more and more technology-dependent.

Consider what’s going on at car dealers now: There’s so much technology in automobiles that salesmen can’t even explain all the features to buyers. Instead, dealers are hiring technology-savvy employees to sit down with buyers and teach them the features. These “technical tutors” don’t build or install systems in the car; rather, they focus on the needs of customers and transfer knowledge to the most value out of their purchases from a system that was already built into the car automatically.

And that’s what the channel must do--focus on customer needs and value. Great strides have been made with the advent of managed services, but more work is needed in this area. As new technology gains traction, start assessing your capabilities and readiness to take on new challenges. If you’re not ready to pivot, the change that is already starting could be overwhelming.

 

Craig Schlagbaum is Vice President of Indirect Channels at Comcast Business.

 

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