Tech Industry Missteps Could Spell Trouble for Channel Practitioners

The tech industry’s path to a more perfect, digitally transformed world turns out to have included more shortcuts and missteps than previously anticipated.

From social media outrages to search-engine shortfalls to end customer blunders, big tech’s reputation has taken a serious hit in 2018. Will the channel suffer along with broader industry as a result? It’s a question more experts and practitioners are starting to ask. Some, in fact, have been mulling the potential for the better part of a year.

Take CompTIA. In its IT Industry Outlook 2018 study published in January, the organization recognized the tech industry’s reputation for being an agent of positive change was deteriorating thanks to mounting concerns over consumer protection, regulatory compliance and fair trade.

“Because of the scale and scope of benefits provided, the tech industry generally gets the benefit of the doubt, overlooking the occasional product flops, the folly of the dot.com era, or the usual frustrations that come with early stage products. However, signs point to changing expectations and a different environment unfolding,” the Chicago-based CompTIA concluded.

In the year since, questions surrounding security, privacy and screen time have only intensified. So, too, have concerns over market disruption and power imbalances.

CompTIA’s Seth Robinson

“Digital technology has gone from being seen as a progressive business tool to a disruptive societal force,” says Seth Robinson, senior director of technology research and analysis at CompTIA.

While he adds that the hysteria is outsized, the turnabout is nonetheless startling.

“Just a mere few years ago, ‘digital transformation’ was seen as a positive agent of change. It was going to democratize information, reduce geographical barriers and connect forward-thinking people the world over. Now the promise is challenged,” he says. “And it need not be.”

Longtime channel veteran and former MS Dave Sobel, senior director of MSP evangelism at SolarWinds, recognizes the challenges but believes broader tech-industry woes could prove to be a good thing for the channel, so long as channel practitioners don’t get lumped in with “Big Tech’s” bad actors.

Channel companies are still seen as protectors of customer data and overseers of network infrastructures, Sobel says, not opportunists looking to monetize consumer data or advocate for relaxed privacy standards. What’s more, Sobel adds, channel companies have not been blamed for the kinds of security lapses that have occurred at Target, Equifax and Yahoo.

While these companies have been derided as fools, schemers or worse, channel companies have not been painted with the same brush; in fact, Sobel says, the increased scrutiny of and apprehension about digital-technology providers creates an opportunity for solution providers to have conversations about data protection, security and business ethics with their customers, Sobel says.

“Any industry feels pushback as it matures, and the questions being asked [today] are healthy,” says Sobel. “As business advisers, being asked [tough] questions is an opportunity to help customers understand and mitigate their risk.”

Janet Schijns, executive vice president and chief services and solutions officer at Office Depot, agrees, but believes solution providers should take the issue very seriously. The opportunity for the channel, she says, is to position itself “as a holistic provider of technology services rather than a purveyor of goods in the hall.”

“Where I think the channel has a challenge is that …

… they have in many instances acted as ‘sellers.’ And those sellers typically aren’t seen as being engaged in protecting their customers, but rather either trying to grow at the best case or just get money from [customers] at the worst case,” says Schijns, a 2018 Channel Partners Influencer award winner.

A better way? Offer managed services that position your company in a different light.

Office Depot’s Janet Schijns

“When you have – and I’ll use our solution as an example – a virtual CIO that comes out and checks what you have and looks at your needs and sees your abilities and says, ‘Hey, you’re not protecting your customers’ data enough, you’re not protecting your associates, you’ve got risks here [and so on].’ Then the channel gets seen as the ‘solutioner’ — the person who protects them from whoever on the tech side is exploiting these customers. Should they ignore it and continue to just try to sell more and more technology, [solution providers] will be lumped in with the exploiters.

NetGain Technologies, a Lexington, Kentucky, provider of managed services to small and midsize businesses, is one of many MSPs hoping to avoid that pratfall; in fact, many of NetGain’s customers rely on it to serve as the virtual CIO that Schijns describes. NetGain helps with cybersecurity, data integrity and business strategy, among other things. Regardless of what its customers think of social-media giants, data-mining companies or disruptive tech upstarts, they view NetGain as a source of good, says Jason Jacobson, company CEO.

Ransomware, Jacobson adds, is a big reason why.

“A few years ago, when we met with our top clients, they were saying, ‘I don’t want my data in the cloud because I don’t think it is secure’ or ‘I don’t want to put my data into Microsoft because I am worried who might have access to it,’” says Jacobson.

Then security breaches began to mount. Since the rise of ransomware and other forms of malware, customers have changed their views. Most realize that sooner or later one or more of their employees will click on something they shouldn’t or neglect to upgrade something that they should. As their thinking has evolved, customers have warmed to the idea that putting things in public and hybrid clouds is a sound idea, and relying on an independent third-party channel provider to help them is an even better one.

But this notion, like it or not, is under more scrutiny today given the excesses of big tech companies. This is especially true as partners recommend and implement more advanced technologies such as AI and IoT innovations, which raise new and often unanswered questions regarding security, regulatory compliance, employment and more.

Tim Curran, the retiring CEO of the Global Technology Distribution Council (GTDC), says channel companies should start to formulate answers to tough questions from customers, especially when it comes to data security, customer privacy and regulatory promise. They may even wonder if it makes sense to promote their own companies on social media and in other forums. But they still appear to heroes to most of the companies they serve.

As for other tech providers, he has mixed feelings.

“I still think social-media companies and others provide enormous value to the market,” Curran says. Many, he adds, have been unfairly treated. But being a little bit more upfront with users on data usage and tracking, he adds, “would have been a better business move.”