If you are reselling technology your business may be headed for trouble. Don’t expect an economic recovery without taking steps to change your approach to the market…find out why in this video. In this video I speak candidly to small and mid-sized resellers about market trends and what factors play into future growth and stability. It’s a sobering message.
Archives For Trends
First, don’t miss today’s podcast at http://dstelzl.podbean.com/ – critical information on justification you need to provide before your projects can be approved. This applies well to the topic of managed services and how you should go about creating the ongoing justification needed to maintain long term managed agreements. A couple of key points made in yesterday’s teleseminar that deserve repeating:
- Managed services is a necessary part of building your company going forward. Without it, further commoditization of your product set only produces less margin, and service billing rates for most companies have not increased much over the past 20 years. We were paying $150 in 1988 for network engineers in the southeast; the same fees we’re charging right now in many cases.
- Valuation numbers for resellers depend on recurring revenue contracts. Ten years ago you might have sold you company for a multiple of revenue – today you might consider a small multiple of EBIT in most cases. Most acquisitions today are fire sales. Only recurring contracts or narrow highly specialized offerings can reverse this trend.
- Educational based marketing is the number one way to sell this type of program. Most clients are not aware of the risks they are operating with today. Without education, you’ll never come to agreement over the value you’re providing.
In addition we covered how to build it, how to price, what products to use, who should sell it, how to sell it, and how to maintain it and grow it. If you missed this program – make sure you catch the next one. You can’t succeed in this economy without changing your game to compete.
My business planning podcast will post on Friday – regardless of whether you listen to it or not, you do need a plan. You are sure to be inundated over the next two to three months with economic woes and tips to keep your business running. Some will be worth reading; others will just spur more whining. As I come across meaningful input I will be sure to pass it along. Here are some considerations for 2009 – along with a link to eWeek’s Channel Insider – Factors for Profitability in 2009. It’s worth a quick skim – mostly bullet points as follows:
– Mergers and Acquisitions; this is a time to pick up new clients as unhealthy companies fold. Make sure you’re healthy, invested in marketing and branding, and are keeping you sales efforts well tuned and focused.
– Managed Services; I’ve been preaching this for over five years now. If you don’t have it your company may be in trouble. If you are still approaching this as a monitoring or ROI sale, the same is true.
– Cloud computing; this will be interesting. I think Microsoft is in trouble with Vista…do you have a strategy that includes SAAS, HAAS, and other Cloud Computing concepts. You may want to build some partnerships here that will allow you to play in the new world of thin client computing.
– Virtualization; this isn’t new but you’d better understand the value proposition and how to get it sold in a weak economy. The last thing you need is a big ROI study on your hands.
– Server and Storage Consolidation; this is obvious – are you in the storage game yet?
– Compliance; what was once a hard sale may be required now. Make sure you at least have a partner that can do this.
– Security; this should be no surprise.
– Database Consolidation; expect some consolidation as new releases come out and better management of data is required.
– License management; here is an area of waste if there ever was one. Partner with companies like SoftwareOne and get some benefits out of software mismanagement.
– Video conferencing; and other technologies that help people stay home. Sales people need to learn how to sell without leaving the office. Did Cisco see this coming when they bought Webex? Smart move on their part!