Some younger readers may not remember it, but there was a time before self-service cloud. In the long, long ago time known as the 1990s, if IT departments wanted to obtain a product or service from a vendor, they had two options: either phone up the vendor directly, or reach out to one of their channel suppliers. For smaller companies, the former was often infeasible due to long shipping times or specialised needs.
Now, however, the rise of online storefronts and cloud tools that can be procured in seconds with nothing but a credit card have made vendor-direct relationships easier and more affordable than ever. IT resellers, MSPs and service providers haven’t gone anywhere though – so in this new world of instant access to vendors’ wares, we’re asking the IT Pro Panel what makes IT partners so enduringly valuable, and what role they play in the modern business landscape.
The perils of procurement
For most IT decision makers, the choice between working with vendors or partners is no longer a simple binary one. Like most things in the IT world, it would seem that the ideal solution is in fact a hybrid approach, as TempCover CTO Marc Pell explains.
“We source hardware directly from vendors ourselves as a result of the size of our workforce making it feasible to negotiate good deals where worthwhile,” he says. “We use a partner to handle the licensing of Microsoft products, whilst handling other licenses ourselves for services relating to IT security. Finally, we're invested in Azure and partner with an MSP to manage and support our platform in the cloud.”
This mix of partner- and vendor-led approaches allows Pell to ensure that he’s getting the best service and cost depending on the project. For example, as hardware procurement requires little hands-on input from the vendor after the initial transaction, a vendor-direct relationship allows TempCover to get the best unit price, while the ongoing management and configuration needs of Azure means that an ongoing MSP partnership works out more efficiently.
“We've a similarly diverse approach,” William Hill CISO Killian Faughnan adds. “Depending on the solution, we'll either engage direct, or via partners. We prefer managing fewer suppliers (and who doesn't) so if possible we'll push through a partner, but on occasion what we're looking for is bespoke, or not mainstream enough to be something a partner has much experience with.”
The downside of this tactic, he notes, is that working with individual partners on bespoke solutions undermines some of the benefits of partner consolidation, such as the deep expertise with specific vendor solutions that partners can draw upon.
This mix-and-match approach works well for those in the private sector, with minimal constraints as to how and where they obtain their equipment. For others with more binding restrictions, however, this strategy is not so viable.
“Being publicly-funded, we have to ensure we comply with EU and Government procurement rules,” explains Peter O’Rourke, director of IT for the University of Suffolk. “This must always be an overriding consideration when planning projects. For large-value and complex procurement, we might run our own tender. However, we try as much as possible to use widely available public sector procurement frameworks.”
“If vendors/partners are not present on relevant procurement frameworks it makes it challenging at best to deal with them. Depending upon how frameworks themselves are constructed you might sometimes be dealing direct with the vendor, but often it's an appointed partner to the framework. Again, it can sometimes be challenging to deal with your partner of choice.”
O’Rourke notes that while many vendors and partners put a huge effort into trying to engage with the higher education market, they often fail to grasp that procurement frameworks make it challenging for institutions like the University of Suffolk to do business with them.
“You can often find companies trying to bring ideas and technologies to the sector but they haven't understood the procurement guidance we need to operate within.”
“I've been on the other side of a number of public sector procurement frameworks in past lives, and I'd have to agree that it can be difficult to get into the right frameworks for the right end-customer,” Faughnan muses.
“On the one hand it means conformity of standards, which are obviously a great help for organisations without the resources to build extensive procurement frameworks themselves, but it also means a high bar to enter the market for vendors, and then equally high barriers for each bid. I'd imagine that more than once a small vendor pitching a low-cost solution has received a pack containing hundreds of pages of standards to comply with.”
“A lot of small companies won't have the resources to bid for some of these contracts, meaning you find yourself with a disproportionate number of larger companies bidding.”
How to pick your partner
Even outside of complex procurement frameworks, the process for choosing a partner can be daunting. Many potential partners will have different skill sets and specialisations, and putting the legwork and due diligence into making the right choice at the start of the relationship can provide huge dividends, as TempCover’s Pell discovered.
“We recently went to market to find an MSP to manage our migration to Azure,” he explains. “What we found were a number of reputable options, all of whom I'm confident were capable of doing a good job of designing, maintaining and supporting our platform on an ongoing basis. The key differentiator for us was that one partner specifically did their research and presented not only a confident offering on the above, but also looked into ways that the platform could add value by utilising services that would add to our offering, beyond the core requirement. This instilled confidence in the building of a real partnership where the role of the MSP is more than purely platform stability, but also one of proactive consultancy with a view to fulfilling customer needs in ways we had not previously considered internally.”
For many CIOs, this is the holy grail of a partner-focused strategy - the prospect of working with a provider who won’t merely support your business, but will proactively help propel it to new heights. Because partners are generally smaller and more specialised than major vendors, they are able to provide a more personalised service to their clients, putting more time and attention into building the perfect solution for their specific business problems.
On the other hand, this doesn’t mean that partners are infallible; the multinational tech firms of the world got to be that large and powerful for a reason, and there’s many lessons that MSPs and the like can take from them. So what can partners learn from vendors?
“How to increase margins?”, jokes Faughnan, before continuing: “A good vendor brings a lot of experience to the table in their chosen field of expertise and isn't shy about helping out. I've found when dealing with vendors that those who understand that their product is their revenue generator and that professional services are an enabler for that are a pleasure to work with. They get that the point is delivering a solution. Some vendors, however, treat professional services in the same way a consultancy does, with every hour accounted for.”
“I'm quite happy paying for it, but it should be there to help me get on-boarded to the annual revenue-generating platform they're supplying me with, not as a distinct incredibly high margin revenue stream.”
“I couldn’t agree more,” adds Pell, “ the pre-sales advice from our Azure MSP is considered, informed and explorative, with a focus and understanding of our business.”
O’Rourke adds: “Until on boarding is successful and complete our internal customers don't perceive any benefit. Just another large bill from IT. Depending upon what you’re procuring, there may not be much margin in it for partners. Professional services then becomes their major revenue driver. This can, sometimes, result in a seemingly distorted set of value drivers. Getting both vendor and partner to.collaborate can often result in a better outcome for all.”
If you're a senior IT decision-maker and you'd like to apply to be part of the IT Pro Panel, please email panel@itpro.co.uk.
