IT Channel Trends: 3 Areas of Growth for MSPs and VARs

Here at Presh Marketing Solutions, we’re constantly reviewing industry articles, blogs, research reports and white papers, podcasts, and videos all in an effort to remain up to date on the movements of the IT channel. We’ve noticed a few key trends that may affect your MSP or VAR business. Here’s a quick preview of what we’ve learned during the first half of 2018:

• IT buying decisions are being made at the line of business (LOB) level for more than half of technology consulting, hardware, and services buying engagements.
  

• Digital transformation has become a company-wide initiative for progressive firms, and early results show the efforts are profitable.
  

• Artificial Intelligence (AI), IoT, and Blockchain technologies lead the pack in terms of spending on cutting-edge solutions for enterprises.
  

• Security drives technology decision making for many firms, yet they don’t have the internal resources to properly harden networks against breaches.

In all four trends. we’ve found these findings to expand across major verticals with the security play for MSP or VAR solutions being strongest among heavily regulated industries such as healthcare, finance, and law. Resistance to new technology appears to be diminishing among progressive firms and rates of adoption, especially for AI solutions, are popular among CIOs at forward-thinking firms.

Here’s how these trends may have positive effects on your MSP or VAR business:

Line of Business Spending Equals a Greater Need for Consultative Selling

LOB spending is growing at a faster rate than IT spending according to IDC’s “Worldwide Semiannual IT Spending Guide: Line of Business” report. LOB spending will grow by 6.9 percent between 2016 and 2021, whereas IT spending will grow by 3.3 percent during the same period.

Sales Opportunity for MSPs and VARs: The rapid growth in spending power isn’t equal to strategic understanding of which solution a department truly needs to grow the business. Departments desperately need guidance on where it’s best to spend their budgets so they can meet their goals. That’s where you come in. But this new development will require management and a strong understanding of the inner workings of an organization. Here’s why:

• IT Suffers from a Skills Shortage: Though individual departments in organizations can call on their internal IT teams for resources and support, it’s sometimes limited due to the well-publicized talent shortage, especially in security-related services. Line-of-business sales engagements may begin with a simple evaluation of a department’s existing technology setup.
  
• IT Still Has Veto Power: You’ll need to manage LOB relationships in relation to ones you already have with IT leadership in organizations. Though LOB spending is growing, IT truly rules the roost for a firm’s technology and could put a stop to deals in play if you don’t manage the internal workings of an organization correctly.

Your role in situations like these may be to bridge the skills gap where IT wants to provide strategic IT support to departments, but internal resources are spread too thin.

One more stat to keep in mind: The global market for IT spending will reach $1.67 trillion by the end of 2018, says IDC. Just about half (49.5 percent) of that spending will emanate from LOB engagements. This requires IT solutions providers to navigate relationships and political structures within their customers’ organizations to ensure LOB solutions are successful.

Digital Transformation Receives Top-Level Support, Driving Growth in IT Spending

As with any organizational change, exponential growth in change comes from the top executives. It’s no different in the case of digital transformation with 47 percent of CEOs stating they’re receiving pressure from their board of directors to digitize business operations, according to findings from research firm Gartner.

Sales Opportunity for MSPs and VARs: Rolling out digital innovation often falls at the feet of the CIOs of the organizations you’re currently working with (or targeting). Assisting firms in developing clarity around digital transformation may tale:

1. Making the pool smaller. Keep in mind digital transformation is a broad term and can mean different things to different firms. The opportunity for you as an IT solutions provider is the chance to guide an organization’s efforts to define digital transformation on their own terms.
   
2. Focusing on customization. No firm wants to be caught in a cookie-cutter-type technological movement that dictates what technology they should use and how they should transform their organization. Consider approaching the sales conversation with the concept of customization to firm eager to appease shareholders and provide results but cautious about just how to produce those results using the right technology.

The silver lining is digital transformation is so necessary and has been ignored for so long by many organizations that even the simplest digital initiative can produce small wins upon which a firm can build a track record of success for innovation. In Gartner’s recent survey, 56 percent of CEOs stated their efforts in digitization have increased profits.

How Adding SECaaS Grows MSP Businesses

One of the major growth areas for technology solutions is security. We mentioned this in a previous post and it bears mentioning again because the opportunity is so clear for IT solutions providers. The market size for managed security services will hit 47.65 billion by 2023 at a compound annual growth rate of 14.7 percent, says research firm Market and Markets.

Sales Opportunity for MSP: A key point to remember when offering this service is firms are essentially looking to transfer risk, especially CIOs who are often charged with security networks. The key sales positioning is you’re allowing firms to transfer the risk of a security breach to experts, that’s you. Many MSPs wonder if it’s worth the investment to provide SOC for clients. With stories of breaches peppering the news daily, the media is doing the job of risk awareness for you. Consider offering education to your existing customers and leads about how other firms are addressing security challenges.

Establish your firm as the go-to resource for all things security by providing thought leadership though:

• Well-written blog articles providing case studies and use cases of new security-related technology
  
  Many MSPs continue the “scare” narrative perpetuated in the media when it comes to security risk awareness. While that’s important, one way to differentiate your brand is to extend the conversation into solutions. This empowers your customers and leads, allowing them to make an educated decision about their security needs.

   

• Compelling videos with short bites of useful information about security solutions
  
  Video marketing gets stellar results through digital platforms such as LinkedIn, Facebook, and, of course, YouTube. Consider integrating an informative video about security solutions into your marketing to offer your audience another way to consume information about the challenges they face with security and how to address them.

   

• Clear infographics detailing the latest issues in data security, along with options for addressing those issues   
  
  Infographics, when done well, offer a quick snapshot of the landscape of a topic, along with an action the viewer can take to address the challenge the infographic describes. An infographic filled with statistics about cybersecurity threats specific to the verticals you serve would be a good way to begin your efforts in establishing your firm as a thought leader and top resource for security solutions.

If these marketing options sound a tall order, you’d be right. You’ll need assistance in turning these ideas into reality. That way you can focus on growing your customer base and serving your existing clients. Let’s discuss ways your firm can leverage the shifts in the IT channel to your advantage through a thoughtful and effective digital marketing strategy.