The Customer Will Decide: A Dawning Realization About the Pending Collision of Managed Service Providers and Independent Dealers If you are a fan of nature shows, like I am, you may recall a common archetypal story of civilization pushing up against the wilderness. When this happens, animals traditionally distant from civilization, such as coyotes and bears, meander into a town. Perhaps it is proximity that opens the door of opportunity, curiosity that compels them, or hunger that drives them. However, it might just be all of these elements, much like the landscape you and I are witnessing to in today’s market place. Today’s landscape is ripe with changes with which many of us must grapple. A storm of change is on the horizon, even beyond the roar of the Managed Print Services revolution, itself hitting a crescendo of awareness. In uncertain times, reactions can vary widely. While the stereotypical response seems to be that of a traditional fight or flight reaction – offense or defense – are things ever that simple? I would suggest not, as I would not suggest a wild animal’s venture into civilization to be singularly influenced. Competitors outside of your own market are at work - hungrily looking for recurring revenue streams, gobbling customers of the unaware or simply being chosen by customers because a particular relationship exists or advantage is perceived. In short, markets not previously in competition are colliding in ways that create extreme amounts of friction, which require innovative responses to combat the eventual commoditization for all. Fresh from the field, helping my customers work through an evolution of one type or another, I find an interesting landscape continues to develop – stopping for no one. Perhaps most interesting is the phenomenon that change is more customer-driven than ever, perhaps driven most noticeably by ready-access to information used to compare one product or service against many others. While providers certainly have their stake in setting the agenda, customer advocacy continues to drive markets together by uncomfortable means. Entrenched businesses took an extremely defensive position during the recent economic downturn, citing revenue and profit concerns. However, many web and social media marketing mavens I interact with experienced explosive growth, out-pacing traditional marketing initiatives. The connection for you to pay attention to is not that web and social media marketing is a panacea to your ills. Instead, look to why these tools are seeing such explosive growth. The technology is cheaper to use, generally offers more of an ability to reach customers on their terms and can be extremely targeted to specific demographics. Those who adopted the use of these types of tools not only maintained a firm marketing presence, but were able to slice budgets as well. These all sound like very similar hallmarks of Managed Print Services, right? After my recent attendance at the CompTIA Breakaway event, it is clear Managed Services Providers (MSPs) are keenly interested in Managed Print Services (MPS). Yet MSPs are generally grappling with how, or even why, they would incorporate something like an MPS strategy into their offerings of infrastructure and communication. I can share with you the reason the early adopters have not only adopted MPS, but embraced it, is because it is simply one more offering to surround their customers with a services-focused umbrella – essentially becoming a one-stop-shop for their customers. In other words, before they might not have paid attention to your copiers and printers. However, they now see another opportunity to play defense by going on the offense – especially with MPS programs such as PagePack, PRINTSolv or CARBON SiX offering partner programs geared to handle all the tedious details an MSP could care less about. Market trends continue to drive previously coexisting organizations into competitive landscapes such as economics, the proliferation of Software as a Service (SaaS), and the trends of small businesses’ ability to effectively leverage outsourcing to help them focus on their core competencies while reducing things traditionally thought of as overhead – such as IT and output costs. The enterprise space will continue to be crowded and competitive, requiring robust expertise at your disposal to even have a hope. As such, many enterprise players are retooling to target the small-to-medium business (SMB) space and provide offerings equivalent to what an enterprise user might be accustomed to without the enterprise user price tag. In his book, The Wal-Mart Effect, Charles Fishman shows how Wal-Mart uses scale and sheer market presence to offset lower margin transactions. Providers in the new economy must clearly define their brand, using scale to complement lower-margin transactions or delivering upon boutique-style, high-value relationships that remain relatively cost-competitive. To combat the sheer size of larger players, who traditionally are slower to move, organizations like OnForce have orchestrated a marketplace for technology-focused professionals and companies in need of job-based professionals to interact and conduct business. While this is not terrifically unique, what may be a key differentiator is the ability for customers to filter and screen the types of providers they choose while professionals can create trusted networks of colleagues so as to federate their approach to market and not lose opportunities due to unavailability. Software as a Service (SaaS), or “the cloud,” as it is often referred, has picked up steam. While not the de facto standard, cloud-based services are being leveraged by SMBs more and more to combat the need to sink extraordinary amounts of capital into on-premise equipment. What this means to an output provider is that they must be prepared to have an answer to this business model. Traditional, all-inclusive, cost-per-impression contracts have the overtone of this costing model, but still leave a bevy of choices in the hands of customers. If costs were equivalent to what a customer pays now, and a provider could add additional relief in management, it becomes a fairly easy transaction to navigate – although I would stop short of calling it a no-brainer. My suggestion to those who find themselves seeking new opportunity, as well as the ability to protect their own base of customers, is to be creative and seek out unlikely allies. As you look around, ask yourself if you live in a world where competition may have closed your eyes to unlikely collaborators. See a world full of opportunities to federate a band of smaller allies in order to overcome an enemy once thought untouchable – be it a larger competitor, market vertical or service offering. The uncertainty of change brings an eclipse of risk and fear to most, but the dawning realization that opportunity lives within your grasp can be yours, if you choose to open your eyes and ears to execute a plan your customer may be asking for. As a senior consultant with the Photizo Group, Ken Stewart comes from and works directly with channel providers in the managed services space, developing educational tools and resources to promote lasting business transformation. Ken also owns and operates an industry-niche blog, ChangeForge, focusing upon the collision between the constantly changing worlds of business and technology in an information-centric world. He is also a board member on the Managed Print Services Association, and writes a weekly column on www.MPSInsights.com every Tuesday.