What is your cloud strategy? In this week’s MSPtv episode, we’re joined by Chief Advisor of Clarity Channel Advisors and Navigate 2015 speaker, Jim Lippie. Clarity Channel Advisors helps IT service providers remain relevant when increasingly, large cloud providers are dominating the market and taking revenue opportunities away from MSPs. Learn more about this phenomenon Lippie refers to as the "channel eclipse" and how you should respond. Hint: It's not enough to merely acknowledge the burgeoning cloud market by offering cloud solutions like online backup and Office 365. Reselling alone won't give you a competitive advantage and help you optimize profitability. How then do you proceed? Tune in to learn how to take advantage of the cloud opportunity by formulating effective strategies that ensure your business longevity and success!
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Like what you watched? See also:
- Having Trouble Keeping Up with IT Labor Demands? Cut Costs with the Cloud!
- Attention MSPs, Opportunity Is Knocking. Are You Equipped to Answer?
- 4 Ways Microsoft Is Investing in Data Security & Compliance for Office 365
Scott: Hi, and welcome to another episode of MSPTV. I'm Scott Glidden, and with me here today is Jim Lippie from Clarity Channel Advisors. How are you, Jim?
Jim: Doing great. Thanks, Scott.
Scott: Good. Jim's gonna walk us through some cloud strategies today. I know it's something. It's an issue. It's a topic that many of our MSPs deal with with their clients on a regular basis. In many cases, our MSPs, to some degree, are facing some pretty big challenges from larger providers that are beginning to step into the space. How should they be addressing that, and what opportunities should they be looking for?
Jim: It's a great question, Scott, and something I talk about all the time because at Clarity Channel Advisors, that's what we do. We help service providers develop a successful cloud strategy. So what you're talking about with large providers coming in and taking market share and revenue opportunities from service providers, I actually have a name for that. It's called Channel Eclipse, and it's a phenomenon that's been going on now for a number of years. But it's certainly ramping up and, as certainly software, the service applications are coming in and becoming more popular, Office 365, Hosted Exchange, there are lots of different new solutions that are coming in from new competitors every day that, again, are eating market share and revenue opportunities away from mainly service providers.
So one of the things that I talk to all of our members and clients about is how they can combat that. Really, with the comprehensive cloud solution is how you do it. I ask people, "What's your cloud strategy?" And now, we're selling Office 365 and online backup. Well, that's not really a cloud strategy. You're reselling some solutions, but it's not a strategy. A strategy is where you focus in on controlling the applications that clients use and then building around that. So Desktop as a Service, I believe, is the best way to accomplish just that, hosting the client's applications, and then bundling in manual [SP] services around that.
Scott: Right. And many times, I hear partners say that all IT is local, and in many instances, I think that's the one chip in the game that they have against some of these big service providers. But really, they need to begin this conversation with their clients upfront and first, right? How would you counsel them on how to break that conversation open with their clients and what to stress?
Jim: Yeah. You bring up a really important point because I always say, "If you're not talking to your clients about a cloud solution, then somebody else is." And you do have an advantage as an incumbent to come in and educate organizations, your clients, about what solutions will meet their needs best. I'm a big believer that if you go in and educate the customer about what's out there, how it suits their needs, then you're going to put yourself in a very good position to continue to gain their trust and their business going forward. So I always start from an education perspective. "No pressure, Mr. and Mrs. Client. This is what is out there. This is what we have to offer." Just educate them, and then naturally they will be drawn to you if they like what you have to say.
Scott: Right. Now, I know here at Continuum, we are very focused on, when we have cloud conversations and products that we develop, that security is a big issue with many end users. They are fearful about . . . You hear about all of the hacks that are going on and sites that have been encrypted and stolen. How do they address that? How do they break that barrier with a client?
Jim: Yeah. Well, again, coming back to Desktop as a Service, it solves a lot of problems for customers. It certainly gives the client more flexibility from a device standpoint. It empowers a successful BIOD strategy. It allows the service provider to bundle in manual [SP] services that can be leveraged from Continuum's RMM solution. I personally think Continuum is in a great spot, right now, to empower service providers with their outsource knock and help desk, and bundle that in with a great Desktop as a Service platform. And it's a complete bundle that clients want, and ultimately, if the service provider's doing it right, they're going to actually profit quite a bit from that.
Scott: Right. It takes away a lot of the horsework that has to go on in the background.
Scott: I was looking at your website and noticed that you talk about having a clear path to growth profitability, high evaluation, and sustainability. Talk to me about those points there.
Jim: Yeah. So profitability, at first, is understanding how to price your solution, understanding labor allocations, understanding what your hard costs are, saving money on labor. One of the great things about some of the solutions, Desktop as a Service solutions that are out there today, is that you can grow your business extensively without actually adding more people to your payroll.
Jim: So you get more leverage that way. So again, understanding those cost drivers can create a more profitable offering. Two, certainly, sustainability. So I believe that if you don't have a solid cloud offering, then you're not gonna be successful, and you're not gonna be able to sustain your business for the long haul. And then, certainly, higher evaluation.
The four major buckets of revenue for service providers say, hardware, professional services, manual [SP] services, and cloud services. If you're looking to build value in your business, well, then you need to look at cloud services for that because there's very little value in hardware revenue. Professional services is little bit better, obviously, than the hardware, but it's not a whole lot better. Manual [SP] services, obviously, is strong, but the strongest and is 6.8 times multiple, is cloud services. So if you can build your business around that, you're building a more valuable business.
Scott: Yeah, absolutely. Those are some great points. There's a link to Clarity Channel Advisors' website right here, and I'm sure you'd be happy to take any questions that anybody has.
Scott: Feel free to reach out to Jim. You're going to be presenting at Navigate 2015 for us.
Jim: Yes and looking forward to it.
Scott: Excellent. That's gonna be a lot of fun in Las Vegas in September. And folks, if you haven't signed up and registered, yet, for that, I'd tell you to do so pretty quickly because we're filling up. Great to have you, Jim. If you're ever in the neighborhood again, please stop by, and we'll dig a little deeper into cloud strategies.
Jim: My pleasure, Scott. Thank you.
Scott: Absolutely. Thanks. Thanks, folks, and we'll see you again soon.
Get more nuggets of cloud wisdom from Jim at Navigate 2015, our second annual user conference in September! If you can't wait until then, check out the latest episode of Countdown with Shannon Mayer for a special teaser!
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