Datalyst's Dan Mathieu Reveals Vendor Vexations

It’s a big gripe among managed services providers (MSPs) these days. As they work to provide the best services and products to their customers, lurking right around the corner is the challenge of having to prove the added value they bring to provide the service, compared to the bigger, global companies offering it direct.

A lot of MSPs are struggling with new and existing vendor relationships. Providers spend their time, money and energy getting trained on the vendor’s products and services and meeting all of their requirements for the partnership. In return, there may not be a dedicated account rep for proper communication, and a lack of sales leads. But the most frustrating aspect?

“When the vendor bypasses the partner and goes directly to the client to further up-sell their products and services, this confuses clients, as we are always on top of communications, sales and the renewals we offer them,” says Dan Mathieu, CEO of MSP 501 winner, Datalyst. “We are having more issues with product and service vendors attempting to do what we do best and cutting us out and going direct to the clients.”

Everything now has gone the way of the monthly service — the monthly recurring revenue model (MRR). Naturally, vendors/manufacturers are finding it lucrative to get the MRR rather than the partners.

“We are now just in their way,” says Mathieu.

Datalyst’s Dan Mathieu

Looking ahead for MSPs and IT service providers, it will be a challenge to convince current and potential clients of the added value of us providing the service, compared to the bigger guys handing it to them directly on a silver platter.

As an example, we take a look at cloud vendors. A recent survey found that of the top tech behemoths – Amazon Web Services, Google, Hewlett Packard, IBM and Microsoft – providers and partners said that they most often lose deals to Google. The survey showed that Google is anticipated to be the cloud market leader by 2021.

The MSPs surveyed called Microsoft out as the second biggest threat in terms of losing deals, but results showed that they expect Amazon to become the true force to be reckoned with in the next five years.

In the face of these odds, Mathieu urges MSPs to constantly be looking ahead, and to provide value-added services in order to maintain what they are doing; if not, there will be more MSPs going out of business in the near future if they fail to recognize those changes.

Another area that MSPs can help themselves is with effective forecasting, and not falling prey to each new shiny new bell and whistle.

“We have been wrong every year trying to guess or forecast where technology may or may not be for our clients and the industry in general,” shares Mathieu. “Technology just changes too darn quickly, so it’s easy to fall into the trap of assuming that any new product or service that comes along is the latest and greatest, and that everyone will adopt. That is definitely not always the case.”

Instead, Mathieu urges, focus on listening to what your client needs for their business for the next three to five years, and refer them to what you know works — something that has worked in the past, is working now and is anticipated to work in the future.

“Once you’ve determined that a technology was a failure and has outlived its usefulness, scrap it. Stick. With. What. Works.”

There are a lot of changes on the horizon that MSPs – anyone – have no control over. The best advice, according to Mathieu, seems to be to maintain your value-added services, and to hold on tight to solutions you know work beyond a shadow of a doubt. That builds up a level of service and trust that is hard to beat.