3 Steps to Managed Services Selling

Michael Smith

Kevin Mulloy

By Michael Smith, Senior Managing Director, and Kevin Mulloy, Principal, Blue Ridge Partners

For channel partners, cloud is a mixed blessing. On one hand, customers are becoming less captive, putting pressure on revenues and margins. At the same time, the market is moving from products to solutions, meaning partners have an opportunity to re-invent their businesses and provide profitable “Day 2” managed services and support. But getting there isn’t easy. To retain traction with customers and continue to offer value to vendors, today’s VARs are grappling with three pivotal questions:

The importance of proactively addressing these questions cannot be understated. At the same time, though, understanding the perspectives and strategy of your vendors is critical for channel partners to remain relevant in a changing channel mix.

What Does the evolving managed services landscape look like? Becoming a player in today’s managed services landscape starts with a detailed understanding of what that landscape looks like. There are four main managed services spaces in which companies can play today:

How do I determine where to focus? While the evolutionary path looks clean and logical on paper, it can be overwhelming to consider moving down the managed-services path. Where should you start, given limited resources? There are four elements to consider when determining the best direction for your company:

How do I execute the move to managed services? Once you decide where to focus, the next step is to create a road map that will get you from where you are today to where you want to be on the managed-services spectrum. Be very clear on the specific steps that must be launched sequentially to get from point A to point B. This isn’t just about service evolution; it also involves an evolution of skill sets, technology, people, process (how do I organize around this?) and, importantly, …

… leadership and culture. Firms must have the right leadership in place to guide the transition to managed services in a coordinated, well-considered way. One of leadership’s most important roles is to create a new culture of service and embed a “Day 2 Support” mindset into the fabric of the company.

As part of the evolution of skill sets, the importance of the sales team cannot be underestimated. Typically, sales reps who are currently selling “boxes” or maintenance and reactive troubleshooting-type services find selling managed services very difficult. It’s not simply a matter of selling a different product; it’s a different type of sale to a different type of buyer and requires a far different skill set.

There are typically seven aspects to helping channel partners re-tool in this new world:

The challenges faced by channel partners today may be opportunities in disguise. To be sure, the evolving managed-services landscape has some landmines to avoid, but as is often the case, the key to success lies in adapting to new models instead of resisting them and a firm understanding of what customers want today instead of last year — and then understanding how to give it to them.

Michael Smith is senior managing director at Blue Ridge Partners. He has significant experience working with key players in the technology value chain, and helps VARs understand the implications of a changing world and drive profitable revenue growth in light of vendor priorities and concerns.

Kevin Mulloy is a principal at Blue Ridge Partners. His 30+ year career has focused on innovation and technology management issues for a wide range of high-tech and industrial clients. Throughout his career, he has led Managed Services and corporate development projects, and has been responsible for several strategic OEM and channel partner initiatives.