Datto Exec: 5G Won't Blow Market Away

Managed service providers (MSPs) have historically built their businesses by providing a solid IT foundation that keeps their clients’ lights on.

Sure, there have been some leaps forward here and there over the last several decades, but there’s never been anything to equal the rapid pace of change and customer demand we see in today’s channel. New “revolutionary” technologies emerge faster than partners can keep track of, much less learn to manage and incorporate into their offerings. And it doesn’t help that in many ways, the main appeal of consumer tech is that it feeds users’ needs for the latest and greatest features. New flashy technology is practically available in the iTunes store as soon as we all hear about it.

So when customers bring that same expectation into their business IT, many partners feel the pressure to provide the snazzy features they demand, especially because there’s always a vendor ready to offer a product or service around the latest tech trend. There are certain areas this plays out in more than others, such as security or unified communications. But MSPs can only do so much. When they start focusing more and more on features, what happens to the foundation?

Datto’s John Tippett

John Tippett, vice president of Datto Networking, cautions partners not to lose sight of the fundamentals, even if they aren’t necessarily as sexy to talk about. At the upcoming Channel Partners Conference & Expo, April 17-20 in Las Vegas, Tippett will explain to partner attendees that there is big opportunity in some of the unsung heroes of IT, specifically managed Wi-Fi. “New Technology Advances and How to Grow Your Business with Wi-Fi,” part of the MSP/CSP conference track, will examine the trends surrounding the one thing that every client – no matter the size or vertical – demands: constant, fast, reliable connectivity.

We sat down with Tippett to get a sneak peek at the insights he’ll share.

The following transcript has been edited for length and clarity.

CP/CF: How does the managed Wi-Fi opportunity reflect the convergence between the telco and IT channels?

JT: I see managed Wi-Fi as one of those obscure technologies that actually brings the two channels closer together. We’ve seen this with other industries. Back in the day, no MSP touched voice. There were specific telecom providers and their partners that did nothing but sell voice solutions. Then you saw that migrate and converge into VoIP, and then carriers picked up MSP partners.

Wi-Fi is that bubble that hasn’t been popped yet. You’ve got the carriers that historically stayed away from it that are now making their way in and saying their carrier solution now extends further, past the edge device into the network, and includes wireless connectivity. You’re seeing it in specific niches like retail and hospitality where the carriers are getting hit. On the flip side, MSPs have historically looked at it as a commodity-type play where they sold it because businesses needed to be connected.

The middle ground is the future, where it’s a differentiator. It’s a service. Businesses consuming this technology are less concerned with the bells and whistles. No one is saying, “I would like a wireless HD wave 2 access point.” They’re more concerned with, “I need customers to be connected,” or …

… “When I have customers connected, I need to know what they’re doing.” Everybody is looking to solve that.

It’s going to be interesting with the convergence where there’s no clear winner yet. There [are] opportunities for MSPs, but they still need the carriers, because Wi-Fi can’t take you anywhere if it doesn’t get back on an internet connection, right? You have the carriers bringing the internet connection, but they don’t have the local touch, or the local customization, that the MSPs do. So there’s vast opportunity for that model to evolve and find smoother ways for everyone to work together. Are there canned solutions where the carriers will come up with things and bring in resellers to solve that problem, or will there be better integration between the tools? That’s where the conversation needs to go, and open our ears that these are no longer silos. Wi-Fi is in between both providers, and the fastest way to success is for everyone to find a way to coexist and work together.

CP/CF: How does the rapidly increasing demand for enterprise solutions from the SMB and midmarket help drive this convergence trend?

JT: The SMB market is becoming more and more valuable. We’re seeing it even in our partners. Small businesses used to look at Wi-Fi as a convenience that you could get through a computer, you could get somewhere with wire, you could pull out a mobile device and go straight to a 4G network. That’s not the case anymore. Consumers that are coming in are bringing devices and literally expecting that seamless Wi-Fi connectivity.

CP/CF: You mentioned hospitality and retail earlier. How does the challenge you’re describing play out in certain verticals?

JT: We’re seeing firsthand stories where hotels or businesses lose opportunity because their Wi-Fi is either inefficient, unavailable or doesn’t work. We had a specific partner where a conference was scheduled and then canceled and moved across the street because the Wi-Fi connectivity in the facility wasn’t robust enough to handle their attendees. Those are the types of stories that are coming up more where there’s an expectation that’s not just to connect, but it needs to work, needs to be fast, needs to be efficient. You see conferences all the time where they say, “Here’s the Wi-Fi password,” and people can’t get anywhere, and it sets the tone for the entire conference.

That’s true now even in a restaurant. People bring their children in – for better or worse – and you see them sit down with children, hand them a device, and say, “Here, watch your show.” Those consumers aren’t going to come there if they have buffering video or they can’t get online and play games. It’s just become an expectation, and that’s driving businesses to say, “We need to do it that way and see it as a competitive advantage and a differentiator in the market.” But they don’t know how, so they’re turning that energy to their MSP partners and, in some cases, their carriers, saying, “Solve this for me. This is the pain point; what’s the solution?”

CP/CF: There are so many things changing so rapidly in IT that alter the way partners do business and structure their go-to-market offerings. Specifically when it comes to emerging technology like 5G, what is on the horizon that’s going to prompt the next big sea change with this opportunity?

JT: I hear a chuckle when we talk about how …

… 5G is going to revolutionize the industry, and I think that’s the general sentiment unless you’re a carrier. Everyone remembers 4G, and 3G. Here we go again. Each time, it’s going to just blow everything away. The Apple iPhone became the Apple iPhone 3G: It’s amazing! Such a faster connection! Then we all buy it and it’s a little bit better, I guess. Then it’s going to be 4G and who has the biggest network and the best coverage.

The reality of it is all of these things impact the market, and therefore none of them impact the market. You’ve got 5G technology coming, but you’ve also got Wi-Fi technology expanding …You see carriers like Google coming along and breaking the price barrier and offering fiber for $100. None of this independently crushes the industry. It’s just the nature of the IT work that we do. These things keep coming and keep changing, and what we have to do is understand the impact and that it will change things, but it brings a whole new set of challenges. You still have the same questions we have today.

Take the 5G example. 5G will let devices connect, but then by definition they’re not part of the local environment anymore. So access to local resources, for example, is a challenge. 5G connecting with carriers, it’s a challenge to be able to figure out location information. Some of the Wi-Fi enhancements show you where people are dwelling and how their location in the building might influence the content that they see. With 5G, that’s a whole new challenge. We don’t have any of that figured out yet. I don’t see it so much that 5G is going to come in and break Wi-Fi. If anything, it’s going to fuel the general concept that we need to be mobile, which is a combination of 5G and local Wi-Fi, and who knows what next technology is going to come out. You see all this SD-WAN and carriers moving the gateway out away from on-premises and out of the cloud, and that’s not yet been perfected either. But all of these things are going to change and evolve and keep moving, and the commonality is opportunity. The carriers and MSPs and folks that connect that change back to solving pain for business are the ones that are going to excel, not the actual technology itself. They’re all just catalysts to make more things possible …

5G will accelerate this in a way. The carriers market 5G and what it can do, and it’s just going to continue to raise expectations of the consumer, however unreasonable those expectations may be. That’s where opportunity lies. You’re seeing it across all kinds of technology, where the home and the consumer space [are] now outrunning business at the expense, often, of security and process — but it changes expectations. That’s where there’s going to be a bigger impact, combined with the fact that it’s just enabling bigger, faster throughput. But I don’t think the technology itself will come in and blow the market away. We’ll all just slowly migrate that way.