- Lessons Learned, Episode 32
Success is always a combination of preparation, education, skill, luck, and timing. And your can throw into that mix finding the right partners at the right time.
In the year 2000, I was prepared, moving my consulting business forward, trained, and skilled on the tech. And I enjoyed the lucky coincidence that Microsoft was about to spend ten years loving the SMB market. By 2010, the love had faded and Microsoft was moving away from loving this market and their onetime "Partners." Here's my perspective as an IT consultant.
The "Office" World 2000-2009
Having survived the Y2K rollover, many offices had discovered that investing in technology was a good thing. Everyone was convinced that "this Internet thing" was here to stay. The 1990's introduced so-called personal computers everywhere. And many offices didn't have computers, didn't have networks, and didn't have servers.
The only real options for small office servers were Novell Netware and Microsoft Windows. Novell was in a slow decline, and Microsoft had pumped a lot of money into a strategy that would see them own the SMB market very quickly.
If you were in business at the time, the short-term future was pretty clear. Computers were going into all the offices, they were all going to get networked together, and they were all going to get connected to the Internet.
The "IT Professional" World 2000-2009
If you were in IT consulting at the time, the streets were paved with gold and the streams were flowing with milk and honey.
If you had experience with Novell and networking, you were set. Your only real choice was whether to drink the Microsoft Kool-Aid slowly or quickly. If you were a Microsoft consultant, you needed to learn networking and then dig into the new server offerings.
I can honestly say that the one single, most important training I ever received as an IT consultant was the week-long TCP/IP networking course. Oddly enough, this course did not apply to any specific Microsoft exam. But the knowledge I gained in this course helped me cruise through many exams over the years.
I think I took that course around 2000 or 2001. At that time, I had about eighteen years experience working with a huge variety of networks, protocols, servers, and computer operating systems. I think all that practical experience and self-education helped me understand the material better and faster.
Mastering TCP/IP and all the details of networking hardware and software was critical to my success. And that course was a true turning point for me personally and professionally.
At that time, technicians were learning how to build and work with servers. Everyone was learning networking and how to get things connected to and through the Internet.
Lesson Learned: If you're going to touch IT infrastructure, learn TCP/IP. There have been changes in the last twenty years, but the core training that I received back then is still 99.99% relevant today and made learning everything much easier. If you're in this business, learn TCP/IP at a deep level and it will serve you well.
The "Microsoft" World 2000-2009
Microsoft's big, big picture was simple: Get every business in the world to believe they needed to connect all their computers; make that easier with a server; and do it all with Microsoft licenses. The details of the plan were then divided into enterprise clients, mid-market, and SMB - small and medium business.
On the enterprise side of things, there are a limited number of companies like HP or Intel that could buy 100,000 user licenses at a time. So a whole lot of money went into the small and mid-market offices. This included three components that were clearly visible from my tiny window:
1) Design products and bundles for the SMB market
2) Design marketing programs for the SMB market
3) Engage Microsoft Partner resellers to act as a trained sales force to deliver all that marketing and sell all those servers, desktops, and office licenses.
Microsoft accumulated a mountain of data telling them that small business was the foundation for their future. Virtually every business in the world has 25 or fewer employees. Then and now, that number exceeds 90% of all businesses.
A business with 1,000 employees might buy a lot of servers. But a thousand businesses connecting to the Internet every week were going to buy a lot more servers!
So, Microsoft committed money and people to develop SMB-focused products like Small Business Server and licensing that allowed partners to make a lot of money. They trained up partners, invested in communities where they could meet, and provided them with training and programs that helped they find businesses that needed "Microsoft Solutions."
My Business World 2000-2009
As we rolled through Y2K, I was seeing and selling more Microsoft servers, and had some exposure to the new Windows 2000 Small Business Server. It was decent but not amazing at the time. My attention was on the 2000 server generally, and getting trained up on Active Directory.
We spent several years fixing up mess-up or abandoned server installations. By abandoned, I mean that consultants would sell a server, set it up, and then walk away. They made no attempt to document or do regular ongoing maintenance. That maintenance had become the mainstay of my business, and I was happy to have the tools and remote resources that came with the 2000 servers.
As Microsoft introduced and rolled out SBS 2003, we jumped in with both feet. My company was growing and would add one or two people per year until 2008. SBS was the perfect "first server" operating system. And Microsoft was really embracing and supporting the SMB consultants that sold their software to the world.
We got heavily involved with Harry Brelsford's SMB Nation and the SBS user groups worldwide. We became a Microsoft Certified Partner shop, even reaching Gold for a short while. We embraced the training and marketing programs that Microsoft provided. I sat on several product advisory panels/councils and met other partners all over the world.
SBS 2003 was like a license to print money for us. We had a system for selling it, a system for migrating clients to it, and a system for maintaining it. Recurring revenue was the natural result of all of that.
By 2008, it became clear, to those who paid attention, that SBS would not be around forever. I thought the 2008 version would be their last, and was quite surprised to see that 2011 was released at all. But by then we had begun moving everyone to hosted ("cloud") services. That was so obviously the future, we did not see a reason to wait.
Just as SBS and Microsoft's Small Business Specialist programs served us well in the first part of the decade, cloud services became our bread and butter for 2007-2009.
As the global economy collapsed, starting in October 2008, almost all of our clients were on hosted services. But not Microsoft. Not Azure. Not Sharepoint. Why? Three reasons: Profitability, flexibility, and friendliness to the SMB market.
Microsoft didn't love us any more. They now saw that they could cut us out of the middle and take all those clients for themselves. Once again, I think this was obvious to those who paid attention. But too many people were still in love with the Microsoft that used to be.
More and more, Microsoft used the term "disintermediation." In other words, getting rid of the middleman. I was the middleman! The entire SMB IT consulting world was the middleman.
Microsoft marketing tried to pretend this wasn't happening as the SBS development team was gobbled up inside other departments and the pricing was focused completely on larger and larger partners serving much larger clients.
The love was gone.
I don't know a source for the quote, but I've heard it said: "Most things end badly. Otherwise, they wouldn't end at all." The Microsoft relationship just faded away. They didn't love us anymore. We didn't love them.
In 2010, we took the Microsoft logos off our business cards. By 2011, we stopped maintaining our Certified Partner status.
Lesson Learned: When you find a vendor who wants to embrace you, embrace them back. Learn what they want you to learn, let them educate you, and pay them back by selling their stuff. BUT always be aware that they have to make decisions that are good for THEIR business, not yours. Don't love them more than they love you.
This is particularly true of giant corporate partners. There might be a new CEO or new business plan tomorrow. The love can disappear in one calendar quarter. And someday it will.
Sub lessons:
1) Don't let vendors tell you what your business model should be. It will certainly serve them; it might not serve you in the long run.
2) You can't be more loyal to a vendor than they are to you.
All comments welcome.
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Episode 32
This Episode is part of the ongoing Lessons Learned series. For all the information, and an index of Lessons Learned episodes, go to the Lessons Learned Page. https://blog.smallbizthoughts.com/p/lessons-learned-blog-series.html
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