Wednesday, July 30, 2008

HTG Thoughts

I first met Arlin Sorensen at the second-ever SMB Nation conference.

He was doing a presentation on leadership. E-Myth, goal-setting. All that good stuff.

At the time I remember being very impressed with his operation and his attitudes.

Then he started a series of mastermind groups call HTG (Heartland Technology Groups). See Arlin's Blog.

And he asked me to join. And other people asked me to join. Many people just assumed I was a member.

Anyway, Arlin and I have done business over the years. He was the second-ever SBSer of the Year. I was the third. (Bob Hood was the first.)

Arlin and I have appeared together "on stage" several times. We've sold books together. We include each other in various activities and see each other in three or four different cities a year.

But I was not an HTG member.

HTG requires commitment. Commitment to building my business. Commitment to other people in the group. Commitment of time. And a bit of money (a few hundred bucks).

My businesses have grown dramatically over the last few years. I couldn't see myself committing to a program that was likely to make the growth even faster. I've seen more than one business burn out and crash from rapid growth.

Anyway, we finally put in a slow-growth plan.

And I applied to HTG and was accepted.

Our group -- HTG 13 -- met for the first time this week.

My fears were correct. This is going to result in more growth, more direction, more focus. Accountability from someone besides myself.

- - - - -


Everyone has a different approach to getting through the day, the week, the month, the year, and life generally.

Some people lose themselves and their values in search of the almighty dollar. Not Arlin.

Arlin -- and HTG -- puts emphasis on having a plan and executing it. Life plan. Leadership plan. Business plan. Execution. Execution. Execution.

But underlying all of this is a real commitment to community. Arlin builds communities. The HTG members build and live in communities. They participate in communities. They contribute to communities.

For me, there's a lot of consistency here. My Relax Focus Succeed(R) work relies very heavily on planning and goal-setting. And, obviously, I'm addicted to the community. In addition to making friends, I enjoy helping people. And, at the end of the day, it all comes back.

My biggest challenge is focus. That's why I emphasize it so much in the book.

Planning is good. And execution is good. Both of these things are visible events you can show to other people.

But somewhere between them comes focus. Here's what I believe:

You will have success in whatever you put your focus on.

Having a business plan is great. But if it sits on a shelf in a binder, and you can't even remember one goal for the year, then it's useless. Focus means you need to put your attention on that thing. Focus means you need to say no to activities that drag you away from your plan.

You need to say no to business opportunities that make a little money now, so you can focus your attention on the big plan that will make more money in the long run.

You need to focus on building friendships and not just business relationships. When all the money's gone (or you're so wealthy that it's irrelevant), friends will be the most valuable thing you have. After all, when you have a bad day, you don't email the bank. You email a friend.

So as I take home my assignments and begin the HTG journey, my personal challenge will be focus. I need to give this new community the attention it deserves.

I'm looking forward to it.

Saturday, July 26, 2008

Vendor Loyalty Goes Both Ways

If you're like us, you have a standard set of products and services you offer. This is your "line card" of products.

Our standard products look something like this:

- HP hardware (servers, workstations)
- Microsoft O.S. (SBS, Server 2008, Vista)
- Symantec Backup Exec
- Trend Anti-Virus
- Diskeeper defrag
- Windows Defender
- Microsoft Office
- QuickBooks

We have a longer list of products as we move to network, wan, printers, etc. And if the client is already using something, and they're happy with it, we support that (Peach Tree, Goldmine, etc.).

In the big picture, we keep costs down and maintenance quality support by having a standard line card for our business.

But business is business. We are not wedded to any of these products "til death do us part." True, we're pretty heavily invested in some. I can see a world without Microsoft operating systems, but I don't plan to go there. Quoting something other than HP would require a good explanation to our clients, but we'd all get over it. If we switched to WordPerfect instead of MS office, no one would know the difference.

Vendors are lucky that inertia is such a powerful force. We are more likely to keep doing the same thing than we are to make changes.

I believe loyalty is one of the fundamental human traits. We find ourselves becoming loyal simply because we continue to do business with someone. We have favorite vendors, favorite distributors, and favorite products.

Are these always the best? No. They are simply our habits evolving into loyalty.

From time to time, you need to splash some cold water on your face and look at what's really going on with your vendors.

I revealed my score card for Microsoft a few days ago. We have similar analyses for other vendors (although far less detailed because we are less intertwined with them).

In choosing vendors, one of the most important criteria is quality. That is why we sell HP and Diskeeper.

But, for many products, there's a "bar" above which a product must be. And if several products are above the bar, then we have more choices -- and less loyalty. A great example here is small office switches. 3com, Linksys, D-Link. If I'm managing the traffic for 20 people and they're all within 100 feet of the equipment room, pretty much anything will do.

Now, if I have 500 people spread out across three floors, I'm not going to build a network based on a series of $80 switches.

But for that 20-person network, there are many choices.

Anti-Virus is another commodity where there's a bar. Luckily, today, every major brand is above the bar. McAfee, Symantec, Trend. All of them can be centrally managed, centrally deployed, and do a great job of stopping the bad guys.

So when we make vendor choices in such an environment, other factors become more important.

One of the key factors is vendor loyalty -- to us.

Does the vendor provide service, support, training, NFRs, spiffs, and loyalty? Are they committed to the channel, or will they compete directly with me?

About a year ago we reviewed all the major products on our line card. At that time we decided to move away from Symantec for three primary reasons.

1) Their products have become nearly impossible to make a profit on. Un-installation takes an act of Congress. Upgrades require complete removal of the old product. So the whole operation is labor intensive. And hard to justify.

2) They have resisted meaningful NFR programs and free training forever. True, they recently came around on this. But a day late. And we have no sense that they're committed to continuing vendor-friendly programs.

3) They consistently -- and aggressively -- try to sell our clients when it's time for renewals.

#3's the killer.

If you compete with me for my clients, why should I give you my money?

Why should we be loyal to a vendor who is not loyal to us?


Not a good excuse.

Symantec recently made clear that they will officially have zero loyalty to the channel. See

If you are "in the middle," you're not currently under attack. But the largest 900 accounts will be handed over to inside sales reps.

And all license renewals for small and medium-sized businesses will be moved from channel partners to Symantec's direct sales team.

We dodged a bullet. We're officially a Trend house at this point. As renewals flush through the system, we just move them over to a competitive upgrade from Trend.

- - - - -

Whether it's Symantec, Microsoft, HP, or anyone else . . . Vendors will do whatever they want. If we add $100,000 in sales for any of these products, we're still just about the smallest fish they ever deal with. They're not going to chase us to determine what their future strategy looks like.

But there are companies with a fundamental commitment to the channel. They may not be loyal to my little consulting firm, but they're committed to using the channel to maintain price, market share, and partner loyalty.

In the consumer market, you can appeal to "the masses" with a little flash and good sales price.

But in the business world, clients rely very heavily on the advice of their consultants -- internal and external. If the consultant recommends Cisco, they buy Cisco. If the consultant recommends Trend, they buy Trend.

If I started quoting WordPerfect on Monday, my clients would start buying it.

Vendors are always tempted to go with direct sales because of the higher margin. We need to get used to the fact that some direct sales will be part of most vendor strategies from now on. This is particularly true of products that are sold to both the business and consumer markets.

But, in the big picture, there are vendors loyal to the channel and vendors who are not loyal to the channel.

Dell has demonstrated twice that they are not loyal to the channel. Their third attempt may be different.

Symantec has moved away from the channel. If everyone starts selling something else, they may be back.

Microsoft is moving away from the channel. As a stock holder, I am very disappointed in this. As a reseller I am disappointed in this.

- - - - -

Emotions need to be set aside here. This is business. You need to make business decisions about the long term business strategy you'll pursue, and who your business partners are.

Vendors will do what they will do. You need to do what you need to do.

Be loyal to vendors who are loyal to the channel.

When you need to change products, make the move and be done with it.

The world keeps spinning.

Thursday, July 24, 2008

Grading the Microsoft Relationship

If you look back at my posts for 2008, you'll see there's quite a bit on vendor relationships. The biggest vendor relationship we have is with Microsoft.

And it's a complicated one.

Recently, I looked at one recent development from MS. See

- Microsoft's Emergency Room Reform Policy
- Dear Microsoft: What Does Partner Relationship Mean To You?
- Microsoft Sticks to Call-Back Only

I tried to look beyond immediate issue and onto the relationship. Here's the deal: Vendors are fickle and will do whatever they decide at any given time. Sometimes that's good for you; sometimes that's bad for you. This includes Microsoft.

If you build a great business, you are impervious to anything that your vendors or competitors do.

The Microsoft relationship is very complex. There are great programs (such as SBSC), but no program is perfect. There are other programs that have problems, the vendors know what they are, and can't seem to make progress in getting them fixed.

Your Microsoft relationship doesn't have to be (and can't be) all or nothing.

Microsoft is different from other vendors because their company touches our company in many more places.

With 90% of our vendors, there's very little touch at all. There might be some co-marketing campaigns. Training. Buying/Selling. Spiff. NFR. Done.

Microsoft: Holy Smokes! Here are my proposed grades for Microsoft. Your mileage may vary.

(in some kind of alpha order)

  • Blogging. Outbound. Grade = A. Generally great, based on number of blogs and overall content.

  • Blogging. Inbound. Microsoft does a good job of tracking the blogosphere and responding to it. When there's a buzz, Buzzmetrics picks up on it. Whether the response is appropriate is another animal. Overall Grade = B.

  • Certification. Used to be Solid A. But now there are so many programs and chopped up, overlapping specialities. 98% of clients have never cared. Now even certified Pros don't care. Confusing. Unfocused. Not clear why we need to continue pursuing all these. There needs to be a certification program. It needs not be what we have now. Current Grade = C.

  • Certified Partner. Comes and goes. Greatly devalued by the "registered" partner program. Decimated by the SBSC program. Grade = C. Due to the fact that MSDN and TechNet are included, I could be talked into a B. But those are "gimme's" and not what the program is supposedly focused on.
    • Gold Certified Partner. Keep walking. Nothing to see here. No grade.

  • Channel Friendly Vendor. Microsoft has had a growing direct-to-user segment. It started in the home and is spreading to the business world. Traditionally, I'd say MS gets an A-/B+ on Channel Friendliness. But the Software-plus-Service program and the Office Live program are a clear Grade F in terms of Channel Friendliness. I'm reminded of the best line in The Maltese Falcon: "When you're slapped, you'll take it and like it." Overall grade is now a B. If things go as Microsoft plans, grade will be C next year and D the year after.

  • Licensing: For the most part, licensing isn't that difficult. Right now Microsoft needs to figure out rational licensing for virtual machines. OVS is great. Needs a bit of fine-tuning, but it is the future. Desktop O.S. needs to allow new machines. Office needs to be much cheaper. Overall, it's a good program. Microsoft needs to do better evangelizing about the fact that it's not that difficult to understand. Other than that, Grade = A.

  • License sales tracking. Microsoft is essentially incapable of tracking who sold which licenses. Rather than keying this information to a unique identifier like Partner ID (think relational database), they tie it to your company name. For example:
    kP Enterprises
    KP Enterprises
    KP Enterprises Business Consutling

    and so forth. There are a million ways to get this wrong. There are also 100,000 partners who have never received credit for the licenses they've sold.

    Having said that, people who focus on licenses as their main or only business eventually get this fixed. For them it's probably an A.

    For most partner, Grade = F.

  • Marketing. Complicated.
    • Marketing materials are normally over-produced and off track. But they are spectacular fodder for building your own stuff. Overall Grade is A, based on quantity and quality.

    • Same with powerpoint slides.

    • Connections / Microsoft Across America. Great idea. Unfortunately, the Connections events are not separated from TS2 and MSDN events. As a result, Microsoft has completely lost the ability to get decision-making end-users into the room. Connections: grade for usefulness to partners = D. Used to be A.

      As for "the Bus" / Microsoft Across America, this is a phenomenal resource that falls into the category of "You get out of it what you put into it." If you have a plan, and you work the plan, this is a very impressive benefit to partnership. If you use it properly, Grade = A.

    • Go-to-Market campaigns. Amazing. I wish we had the bandwidth to do more of these. Truly great programs. Well designed and well executed. Combine education, sales component, marketing, an offer, and a reward. Need a lesson in marketing? Do this! Grade = A.

  • MSDN. Great, amazing program. Worth every penny -- no matter what level you buy in at. Certified Partners: If you just throw these DVDs on the shelf, you are throwing away money. STOP IT. Use this amazing resource now. Grade = A+.

  • MVP Program. This is an interesting one. The first MVP I ever met told me how he "flips" NFR copies of software for his clients. The second one I met was getting free books from Microsoft for his user group and selling them to the general public. Since then I've met dozens of MVPs who are approximately the greatest group of partners one could ask for. I'd list names, but you've heard them all and I'd miss someone. Overall, this program seems like an A, but there are a few lay-abouts who just need to go. I'll say grade = A.

  • OEM / System Builder. We still belong because of the odd machine we end up putting together. But, to be honest, we don't "build" machines except to buy HP equipment and load it up with the occasional OEM system. This is a good program, but for the small system builder, it would be nice if Microsoft offered a desktop operating system via Licensing. The OEM Office program is nice, but rationally priced Licensing could make that irrelevant as well. For the small VAR: Grade = A, but I wish the whole program were replaced by a better licensing program.

  • PAL - I am embarrassed to say, I don't know what these letters stand for. But I know what a PAL is: The PAL program recognizes and thanks outstanding SBSC partners for their work in the community and their willingness to help other partners. I'm not sure why these people aren't all MVPs except that there are too many community minded people in the SMB space, so you can't flood the MVP program. Anyway, we haven't seen much after the announcement, but I expect great things from this program and these people. The list of PALs is amazing and spectacular. A truly great group of people. Grade for now is A. Let's see what develops.

  • PAM - Partner Account Managers. Some are good; some are great. A handful are so-so. The program as a whole keeps shifting. For non-Gold partners the PAM and T-PAM and C-PAM (tele-PAM and Community PAM) programs are good at filtering out a few things you can focus on for success. They are not your hand-holding guide to personal success. As long as you keep that in perspective, the grade is A or A-, depending on your PAM.

  • "Partner" program overall. This one is difficult. Where you stand depends on where you sit.

    If you're at the bottom of Vlad's Food Chain, the Partner program is 100% spectacular. You get amazing resources for almost nothing. No effort, a tiny bit of money, no skill, no experience, no relationship, no commitment, etc.

    If you get yourself certified and join the SBSC, you also get an even more amazing amount of return. Again, without putting out an amazing amount in money or effort.

    When you really make a commitment, shell out the big money, jump through the hoops, make the sales, hire the people, get the training, and join the Certified Partner program, the balance tilts. You can look at the SBSC program and legitimately ask what you're getting for your money.

    As for Gold? You're told that you're the most important company on earth. That encouragement, a couple of extra internal use licenses, and the gold lapel pin consist of your entire "benefit" for being Gold Certified. I see people spelling out the benefits, but I haven't talked to a single Gold Partner in the last three years who doesn't think the Certified, Registered, and SBSC programs are devaluing the Gold Program.

    I know Microsoft is trying to figure out how to restructure this. The current program is probably graded as follows: Registered = A+ / SBSC = A / Certified = B / Gold = B-.

  • Partner Program Research Panel. I've only been in this a year. Not sure where this info goes. I guess Grade = A. It's interesting to speculate about what is being planned based on the questions being asked.

  • People. Overall, the most valuable asset at Microsoft is their people. With very few exceptions, I find Microsoft employees to be honest, hard working, dedicated, committed, friendly, smart, talented, and helpful. Sounds like gushing, I know. But think about the people you've met. I can name exactly four people I've dealt with in the last thirteen years who are jerks, losers, morons, or just plain a-holes. One of these disappeared very quickly after a bizarre public display of arrogance and stupidity. Very unusual.

    But the other 1,000 Microsoft employees I've worked with are spectacular. I've met people at almost all levels of the organization, in countries all over the globe. They're all nice, talented people. This does not happen by accident. You get honesty, dedication, motivation, and all the rest because of a great hiring process, proper motivation, and a culture of excellence. I have friends at Microsoft who are some of the nicest people I've ever met.

    One of the criteria our company has for clients is that we only work with nice people. So it's good to have this with vendors as well. Solid A+.

  • Products. They push products. What can you say? They have the occasional "Bob" or "Me" product. Some products have no real use in the real world and simply fade away. But that's what you need to do in order to build the best, most consistently high quality software on earth. Solid A+.

  • Product Delivery. I believe Microsoft's move to delivering their products online is the beginning of the end of their dominance on the desktop. They have fallen into their competition's trap. As for Channel distribution and licensing, see Channel and Licensing grades. As for direct-to-my-client distribution, I'm giving them an Grade F. First, they're not doing a good job with it. Second, they shouldn't be doing it. And, third, from the perspective of a partner, this program is not in my best interest.

  • Product Pricing. As a purchaser of Microsoft products, I consider SBS underpriced (sbs2008 is more in line), Server is priced right, Windows desktop is overpriced, and office is hugely overpriced. Overall, I'd say Grade = B+. Most products are pretty well priced.

  • SBSC is spectacular. Grade A three years in a row. I could go into detail, but it's A for this, A for that, A for the other thing, etc.

  • SBSC advisory panel. Great feedback mechanism. Needs to meet more frequently. Presenters need to either follow up or don't offer to follow up. Grade A-.

  • Support is complicated.
    • Online and DVD support includes MSDN (see separate grade), TechNet (see separate grade), Knowledge Base, blogging (see separate grade), and general "help" files. Overall, Microsoft has the most thoroughly documented, thoroughly supported software that has ever existed. In addition to the Microsoft official support sites, there are thousands (tens of thousands) of unofficial sites that support this stuff. Plus the PAL and MVP programs. and more. Grade A+.

    • Phone support. Oops. I mean, "Enter your problem online and wait for us to call you" support. No grade at this time. We'll have to see how it works out. My guess is: Great for people who do hosting; great for people who support large enterprises; disaster for small businesses and the technicians who support them.

    • Phone support / PSS through July 2008. This one's got three components. First, everyone knows that the US-based support for each product is amazing and spectacular. A+ by all accounts.

      Second, getting to that support has been spotty at best. We stopped using the horrible first-line support for SBS because the people we talked to were untrained, unprofessional, unwilling to take direction, and it cost us more money that it will ever be worth to have them "help" us. A support structure built around "partners" figure out a way to get escalated ASAP is a total failure. Solid F. F for effort. F for performance. F for not caring about partners.

      Third, there's the issue of privacy. The person in charge of this program is not aware of the privacy policies he is supposed to be enforcing. If he doesn't even know what they are, or where to find them, then he can't be doing much to enforce them. We had a completely unacceptable breach of privacy. It was not met with any concern remotely related to privacy. 100% of the concern was over avoiding a lawsuit. Failure at it's worst. F for effort. F for not enforcing policies. F for not caring about the partner or the relationship.

      So, even though the top-level support is A+, the fact that you have zero expectation of privacy and you have to go through seven rings of hell to get to a competent technician, PSS gets a big fat F.

      We'll see if the Don't Call Us, We'll Call You support is an improvement.

  • TechNet. Perhaps my favorite resource. I'm very sad that I can't beat my technicians over the head and make them use the CDs instead of the online piece of crap search engine. If you use the CDs/DVDs, this resource is spectacular and amazing. If you use the online search tool, you will grow old and die (or go to In either case, you won't get the rich, useful, amazing resources available on the DVDs. DVD version: Grade = A+. Online version: Drop the class and move to Google before you get an D for the semester.

  • Training. Free training, and the $100 and $200 training offerings have always been spectacular. Amazing track record. In 12 years I've never attended a Microsoft training that was less than Great. Solid A for in-class training. Solid A for Partner University. Solid A for self-paced training. Solid A for books.

    The week-long training-center training is very good, but not quite so spectacular. I know why it's priced as it's priced. And I know why it's run as it's run. But overall, I have to give it a B+ for value.

  • TS2. There's a lot more to TS2 than the shows at the movie theater or the hotel. Overall, this program is great because it is extremely well focused. Training for techies about the stuff techies need to know. NOT delivered by hired gun/drones, but by techies! Delivered by people who love to show you their new phone, or their 16GB Micro SD chip. Techno-heaven for Techies. Pure and simple. Grade A all the way.

  • Vendor overall. This grade is based 90% on the basic functions of providing good products, getting through them the channel, and getting them installed. Solid A.

    But life's not that simple, is it?

Side note: And Microsoft has a lot to teach us about focusing on the almighty dollar. They do all this in a never-ending effort to make more money. And they do.


Believe it or not, I may have missed something.

How do you grade Microsoft?

Hooking that iPhone 2.0 to SBS?

Tim Carney dropped me a line the other day with some great tips on getting that new iPhone connected to the SBS Server.

    In the wake of iPhone 2.0, many executives are wanting their iPhones connected to their Exchange Servers. You may have previously enabled IMAP, but we all know Exchange-ActiveSync is the right way to go (plus this enables Windows Mobile devices without the need for a Good Server). In order to support Windows Mobile devices (and the iPhone version 2) on a Microsoft Small Business Server 2003 running Exchange 2003, several things need to be done. The following instructions I generated after spending too much time researching this issue and I hope you find them as useful as I do. The standard legal stuff applies, these directions are provided without warranty, follow at your own peril.

So, I says, "What can I find this outside of my personal mailbox?"

And he says

Love Tim. He says he's willing to give phone support to anyone hooking up the MacPhone. But I decided not to publish his cell phone here. You'll have to contact him through his blog.

He also recommended Susan's blog (of course) and Eriq Neale's post on Exchange and iPhone:

Eric Neale's Blog on configuring iPhone v2 for Exchange

And, what mobility discussion would be complete without Mr. Happy Fun Boy, Chris Rue's FunCave?

The message should be clear by now: Don't call me! Ask one of these folks.

Erin in our office has ordered the 16GB iPhone 2.0. When it arrives, Josh (who hates non-Microsoft phones) will have to configure it. Life ain't fair.

Monday, July 21, 2008

Dave Sobel's Amazing Referral Program

Have you met Dave Sobel? I first wrote about him over at

Dave "is" EvolveTech in the Virginia/DC area.

Dave is smart, witty, fun, a good gambler, and a good drinker.

And a good businessman, and a good technician.

One of the most profitable hours of my life is when I pinned Dave down in Anaheim and made him tell me all of his secrets. Dave has won some very-deserved attention from Microsoft for his marketing ideas.

And then I caught up with Dave in Vegas, trying to get to a blackjack table. So while the casino plied him with liquor, I got more information about how he does things.

Oh. Did I mention that Dave is the new co-host of the SBS Show with Vlad Mazek? Let's be honest, Susanne Dansey is better looking -- but it's radio, so Dave does fine.

Last public siting: Dave was the moderator for a panel of "superstars" at the ICCA conference in June. Seems like a year ago, but it was just over a month ago.

Last private siting: Dave coordinated a private van tour of the monuments at night because all the full-size buses were full. (Thanks, Dave. It was 99 degrees with 99% humidity. But we had an air conditioned van.)

Bottom Line:

Dave Sobel is a heckuva nice guy. Great businessman. etc.

If you get the chance to spend time with Dave, do it.

- - - - -

So, what's new with Dave?

Three things.

Thing One: Virtualization.

Even before Microsoft released Hyper-V, Dave started a series of blog post on Virtualization. The basics. Getting Started. Practical considerations.

The future is here. and if you want to learn the details from someone who uses this technology every day, read Dave's blog. Free, of course: Check Out Dave's Blog.

{ Side Note. Dave: What's up with the blog? For $20/month I can hook you up with a nice service where you type domain/blog and you're connected. Anyway . . . }

If you need a quick update on "everything virtual" then read this blog!

Thing Two: Referrals

Dave has the coolest, gutsiest, smartest referral program I've ever seen. We're in the process of implementing this in our own business. Dave's referral program is geared specifically to recurring revenue and managed services. Here's the cool thing: Why hire a sales person when you can turn your clients into a sales staff?

Dave has just released a white paper on his referral program. Available exclusively at

Here's a tickle: Consider giving a "referral fee" equivalent to a month's managed services!!! It's bold. But cheaper than a sales person. There's no workers' comp. And you don't have to buy a new desk.

Find all the really great details by reading Dave's white paper.

Thing Three: Virtualization Seminar

Dave and I are putting on a seminar on September 4th, 2008 in Chicago. We are working with Amy and the good folks over at MSPSN and the MSP Revolution Conference. The seminar is totally FREE, but you gotta register.

The topic is:

Designing, Implementing, and Making Money with Virtual Environments
Come learn from two partners who run their own businesses with virtual environments and have each sold hundreds of thousands of dollars worth of virtual systems. You'll learn:

- The basics (hardware, software, the virtual environment)
- Designing a virtual environment
- Tools you'll need
- Right-sizing the hardware and setting expectations
- Implementing a virtual project -- profitably!
- Managing the virtual environment
- Licensing scenarios
- Building the future: hosted machines, instant backups, fast implementations, and more

Anyway . . .

Dave Sobel is a great guy. Connect with him at every opportunity. Check out his blogs. Check him out when he hosts the SBS Show. Check him out when he makes presentations at conferences. Buy his white paper. Join us in Chicago.

. . .

And encourage him to write a BOOK on that virtualization stuff!

Sunday, July 20, 2008

The HP Way, the KPE Way, and Your Way

Anon, a frequent commentator on my blog, made a remark about our hiring practice the other day:

    So essentially you operate on a FIFO basis. 'Fit in or **** off.'

I would never phrase it so harshly (don't want to offend the kinder, gentler Vlad). But, at some level, YES, our employees are expected to do things our way.

One of the surest roads to failure for any organization is to let every employee operate and solve problems in whatever way they see fit.

Yes, you need to encourage people to think and act with appropriate initiative, but that comes after they learn how things are done. At the point of hiring process, we need to find someone who will first learn our methods.

Starbucks is different from Costa. Costa is different from the Mom and Pop coffee shop around the corner.

Michael Gerber's E-Myth preaches the gospel of standardization. When you run an operation where the lowest paid employee opens the doors in the morning and closes up at night, then you've made some real progress. In many small businesses, the owner is the most expensive employee in the company -- and doesn't get a paycheck. And, unfortunately, that most expensive employee opens the doors in the morning and locks the door at night.

Your company has a culture -- both a professional and a personal culture.

You're either stuffy or low-key, relaxed or formal. Professional or amateur.

And there are two ways to develop that culture. You can decide what you want and work at it, or you can "let it happen." But if you're not working at it, it might happen a lot differently than you had hoped.

If you haven't heard of "The HP Way," please read The HP Way: How Bill Hewlett and I Built Our Company by David Packard.

"The HP Way" is a simple little phrase that describes a series of cultural approaches that made HP successful (before Carly Fiorina came along). These included a commitment to balancing personal and professional development, and the famous "management by walking around."

- - - - -

Picking new employees is expensive. It takes time. And this cannot be outsourced to India or the handed off to the lowest-paid employee. Which means it takes time from managers, generally the highest paid people in a small organization. So the process needs to be taken seriously.

You need to find people who can fit with your culture, and the culture you try to build.

And you need people who fit your requirements.

I'm sorry I can't hire everyone, but we need the best. And, yes, that means "my way or the highway." If people don't fit in, they need to go away.

Sorry, reality here.

Friday, July 18, 2008

OVS Priced to Kick Butt Right Now

As I've mentioned before, Software Assurance is often a ripoff.
Or, as Susan Says, sometimes it doesn't make sense.

But what can you do when a product is about to be revved?

It is at least a bad practice, and perhaps incompetent or immoral to sell an OEM version of SBS 2003 right now without some kind of software assurance. The same is true of an open license without SA. After all, we know the juicy new bits are in RC1 and the real thing will ship on Nov. 12.

You are unlikely to put in a new SBS install now and then do a whole major migration to SBS 2008 in four months. But 2008 will outlive any server you sell today. So it makes sense to make sure the client has the product available as cheaply as possible.

The new product will include a serious increase in price.

Beginning November 12th, we recommend you do not sell SBS with SA because your client will never benefit from it. You can start selling SA again when you're pretty sure a new version is less than a year away.

But until then, we think it's a must!

- - - - -

But what about plain vanilla SA (two years worth of upgrades) vs. Open Value Subscription (annual payments and three years worth of upgrades)?

Let's look at pricing differences.

Theoretical client has 25 users.

Open Business with SA
SBS Premium (w/5 CALs)
Costs client about $1500.

20 user CALs for SBS Prem with SA
Costs client about $2800

Total $4,300

- - - - -

Open Value Subscription
SBS Premium (w/5 CALS) - one year
Costs client about $525

20 user CALs for SBS Prem - one year
Costs client about $630

Sub total = $1,155
X 3 years
Total = $3,465

- - - - -


That's "more or less" $1,000 savings with Open Value Subscription.

It demonstrates, on one hand, that the pricing for software is absolutely arbitrary and unrelated to reality.

It demonstrates, on the other hand, that you should be quoting OVS on every job between now and November 11th.

Network Documentation -- Going, Going, Gone

Afterthought: This book is now completely gone and is being sold only as an e-book until we can revise the print version.

- - - - -
Lana has left for the day. The next shipments will go out Monday at 7:30 AM.

And in the tally for the week, I note . . .

We have less than twenty copies of the Network Documentation Workbook left on the shelf.

We will not be reprinting this book.

So, unless someone finds a box that is being used to hold up a table, the end is in site.

Check it out at

This book has been a huge success for us. In fact, it's the book that "started it all." Demand remains steady enough that they will all be gone in a few weeks.

So, why am I being so cruel to an old friend who has taken me so far?

It's your fault.

And Vlad's. And Erick's. And Arlin's. And Matt's and Susan's and Robbie's. And Jeff's. And Eric L's. It's the fault of the SBS Group Leaders, SMBTN, and everyone at MSPSN. And Vijay, and Chris, and Mark.

And many others.

Here's the deal.

The community of SMB Consultants and Small Business Specialists has dramatically raised the bar of professionalism within our profession.

Part of me says "Thank You" to that great crowd of people who drew attention to this little book and the role it can play in helping consultants take a step up in what they do.

But part of me says "I can't just reprint that book. The industry needed that book. But now the standards are higher."

When it gets reprinted, it needs a major face lift. It needs to be expanded. Not just "modern" technologies like VOIP, but a deeper level of documentation as well.

I have not sold millions of copies. There are millions of consultants who are doing zero documentation. So maybe I haven't really had any affect with this book.

But, for now, it will go out of print.

I am writing a couple of other books right now. There's actually an "editorial calendar" that needs to be followed. Creating a revised edition of the Network Documentation Workbook is on my list of things to do, but it will need to wait awhile.

If there's enough demand, we'll look into an e-book version.

For now, we have about 20 copies and counting.

Thank you, everyone, for the grand adventure.

Thursday, July 17, 2008

Job Posting Irritations

My philosophy about job postings is (like everything else) well documented online:

- Guidelines to Make Sure I Throw Away Your Resume As Quickly As Possible


- Hiring the Best Employee

But every time I post an ad for a new position, I am inundated with irritating people.

I can easily handle people who say "I don't have any of the qualifications, but it sure sounds like a swell job."


The really irritating people are the ones who don't want to apply for the job, but fill my mailbox with commentaries on me, my hiring practices, the wages I offer, why I'm evil, and how they've know $100/hr MCSE's who screwed up an SBS install.

There's also an easy answer to this:

If you don't like my hiring practices,
don't apply for the job.

If you don't like the wage being offered,
don't apply for the job.

If you you think I'm evil,
don't apply for the job.

If you just want to tell stories about incompetent technicians, buy me a beer, but
don't apply for the job.

The most irrirating one is the schmuck who tells me to stop "clogging up the boards" with a job that only pays $50,000 a year.

Schmuck: I paid for that advertisement. If I want to use it to reprint the lyrics to "God Save the Queen," that's my right.

If you just don't like the ad, please don't apply for the job.

- - - - -

I'm posting this here because I don't want to dignify any of these morons with an individual response.

Who checks the job boards every day and posts commentaries on the job postings they don't like? Answer: An unemployed, under-certified (or over-certified and under-experienced), under-skilled loser who spends the rest of his day watching Jerry Springer reruns.

Please just turn the television back on, crack open another Bud Light, and

don't apply for the job.

RSS Feeds, SMB Conference Calls, etc.

I've gotten a couple of inquiries regarding RSS feeds.

If you're interested in an RSS feed for the SMB Conference Call, you'll find it here:

We have just added three new SMB Conference Calls to the page:

  1. From July 2nd: Larry Kesslin on "Mastering a culture of Accountability"

  2. From July 9th: Amy Luby on The State of Managed Services and the MSP Revolution

  3. From July 16th: Matt Makowicz reporting on WPC. Plus a discussion of Marketing Managed Services

If I may say so, these are some pretty good conversations. For example, in yesterday's call with Matt Makowicz, we presented two very different responses to Microsoft's "Software plus Services." Matt's one of those people who are always good to talk to. Here's a good opportunity.

- - - - -

As for feeds on this blog . . . Blogger doesn't do RSS. I guess they will have to some day. Beta vs. VHS.

In the meantime, they provide an ATOM feed. See

Via Feedburner, many people have luck with this feed:
-- Although, I've been told that the dates don't work properly in Outlook 2007's RSS reader. Uninstall it. :-)

- - - - -

We are all busy, and I understand that you can't keep up with everything all the time.

I'm honored that you would spend some time with these pages.

Perhaps bookmarking these feeds will make it a little easier for you too check in once in awhile.

I hope to see you again soon!

Wednesday, July 16, 2008

Acquiring the Royal We

I had lunch a couple weeks ago with someone I had worked with many, many years ago. It reminded me of the man we both contracted with at the time, Michael.

Michael was trying very hard to position his business to be purchased, merged, or to go public. In other words, he was transitioning from the building stage to the exit strategy.

In the middle of this, Michael practiced the things one would do with a publicly traded company. Among other things, he learned to think beyond the business as himself. I saw this at the time, but I didn't really understand the depths of what it meant.

One day we went to lunch, and Michael told me that he was working on saying "we" instead of "I."

I can tell you, it is very difficult to build a business. And after many years of being the one who created it all, it is difficult to make the transition to thinking of the company as more than "me." After all, after all these years, you get to thinking

- I built this company

- I did it

- I decided when to cut left or right

- I got us here

- It's my company

- and so forth

It takes some effort to begin thinking in terms of "we" instead of me.

In fact, you might start by very consciously trying to remember to use the Royal We. But this becomes easier for several reasons.

First, in the sales cycle, you will find yourself talking about your company as being larger than just one or two folks. "We have eight people. We like to do a complete survey of the architecture first. We always document what we do." And so forth.

Second, you'll consciously draw your staff into the decision making process. "We need to come up with a procedure for this. We need to get this patch on all the workstations."

Third, as other people do more of the work, you beging thinking in terms beyond what you will do. At some point, for example, you won't be scheduling technicians. After you get in trouble by promising someone on a certain day, you remember not to do that again. So you'll say "We can schedule that. I'll make sure the Service Manager know that it's high priority."

Gradually, as your business grows, you realize that a) there are things you no longer do, and b) you're never going to do those things again.

At this magical moment, "we" becomes a lot more natural.

Now you gradually find that you instinctively say "we" instead of "I."

In fact, your thinking is reversed. Now you say thing like "We need to develop a policy . . ." when it's not WE. You're still the boss/owner. Maybe you and a manager need to develop a policy. But "we" the company does not.

When you're small but growing -- particularly in that 1-2 employee range, it is a very good habit to consciously try to say We instead of I. As you grow, this will become much more natural.

Something to think about.

Sunday, July 13, 2008

What Works For Me May Not Work For You

I travel around the country, and sometimes to other countries, talking to people about SMB Consulting, Managed Services, and finding success in the profession of technical consulting. I'm always amazed at how advice is perceived.

For example, in the whole blog post series on Managed Services in a Month, I spell out step-by-step what you can do. People email me and tell me their success stories. When I look at what they're doing, it's nothing like what I recommended!

So why are they thanking me? I guess I kicked them in the butt and got them thinking about it. And they did some things I recommended. And they changed others. And they ignored some. etc.

The point is: what works for me may not work for you. But seeing an open, in-depth view of how do things may help you hold a mirror to what your company is doing. And it may motivate you for change.

And if you have success, I'd appreciate it if you take out your credit card and wander over to and buy something. :-)

So last Monday, Vlad drops me an email and recommends that I move my regular Monday SMB Email to . . . any day but Monday.

    Important safety tip for life: There are certain people in your life whose advice you should listen to, even if you don't want to. For me, one of these people is Vlad Mazek. That doesn't mean I always do what he says, but I take it seriously.

His argument is that Monday sucks for everyone because they're overwhelmed with email and newsletters from the weekend. Fridays suck because everyone's half gone anyway and cleaning up their desk so they can scoot for the weekend. that leave Tues, Wed, and Thu.

Basically, Vlad aims for Tuesdays during the holiday season and Thursdays during the non-holiday season. And he prefers afternoons, to catch people as they're either winding down for the day or stuck in traffic.

- - - - -

So I start poking around. First, my own stats. My average open rate is in the range of 27 - 32%. I know, from talking to other legitimate email marketers (opt-in, easy-out), that this is a good rate. My peak open rate was 61.9%, which happened on a Monday in January.

Here's a good, recent article about open rates: What Kind of Open Rates Are People Getting? (AWeber). Legitimate newsletters were receiving an average open rate of 12 - 14.5% in April. Those sent in the range of 2-3 PM had a significantly higher open rate (19%).

I normally get 27 - 30% on Monday and then the numbers float up through the week. So people are saving the newsletter and opening it as they go through the week.

It turns out that there's a small difference in open rates between different days of the week, with Thursday coming out the winner over all (but Tuesday winning some months). The author of that piece, Justin Premick, also gives a word of caution.

    "Please, don’t drastically change your sending times/days just because you see that the average last month, or any month, happened to be higher on a different day or time.

    Yes, you might eventually be able to shift your sending schedule, or split test some broadcasts, but if you up and move everything, you may throw off subscribers who are used to hearing from you at the usual time."

Just as a comparison, spammers have their own community and benchmarks. For example, this is from
    eRoi found that Friday was the best day for sending email, in terms of open and click-through rates (21.0 and 4.0 percent, respectively), during the fourth quarter. Tuesday had the second-highest open rate (20.8 percent), and Thursday had the second-highest click-through rate (3.7 percent), followed closely by Tuesday (also 3.7 percent).

- - - - -

The bottom line for me: I'm having good success with my current schedule and I'll stick to that. But the world keeps turning, change happens, and I'll revisit this whole issue from time to time.

Thanks, Vlad, for adding a recurring task to my to-do list. Like I don't have enough on my plate already!

What are friends for?

Saturday, July 12, 2008

Recommended Reading - Biz Buzz

Recommended Reading - Biz Buzz

Awhile back I asked for recommendations to add to the Resources for SMB Consultants over at SMB Books.

Thank you for your feedback! I'm open for more. So if you have requests related to technology (home server, SBS, EBS), business, or SMB Consulting generally, please send them to me.

In particular, I want to thank Zaun Bhana from Leap Consulting in Australia. Zaun gave me a very thorough list of recommendations (and I quote):

    Seth Godin (Anything in his library is worthwhile)
    Jim Collins (Good to Great)
    Michael Gerber (EMyth Series)
    David Allen (Getting Things Done)
    Jack Stack (The Great Game of Business)
    Verne Harnish (Mastering the Rockefeller Habits)
    Mark Hurst (Bit Literacy)
    Randy Schwantz (How to Get Your Competition Fired)
    Fred Reichheld (The Ultimate Question)
    David H Maister (Managing the Professional Service Firm)
    Rick Freedman (The IT Consulting series)
    Ford Harding (Rain Making)
    John C Maxwell (Leaders series)
    John Jantsch (Duct Tape Marketing)
    Marcus Buckingham (First Break all the Rules)
    Andrew Sobel (Making Rain)
    Nicholas Carr (The Big Switch & Does IT Matter)
    Chris Anderson (Long Tail)
    Michael Port (Book Yourself Solid & Beyond Booked Solid)
    Keith Eades (Solution Selling series)

The good news for me is that I haven't read all of these! That means I get to add them to my personal reading list. Thanks, Zaun.

- - - - -

This list is longer, but very much in line with all of the other suggestions I received. It is very business focused.

Did you notice something about this list? It doesn't include Unleashing SBS, Unleashing Home Server, or any other "technical" books. That's cool for two reasons.

First, the feedback from my request has been almost entirely business-related rather than technology-related. This means my focus is working.

Second, it means I don't need to try to compete on the technical library front. That's a tougher place to differentiate yourself.

We still plan to carry Unleashing SBS 2008 the minute it is released, but we're not going to try to be the definitive source for technology guides.

We will continue to be the single best source for resources for the SMB Consultant!

- - - - -

I can't do it all at once, and I do want to get a sense that there's a consensus on the value of the books we add.

So, with the help from all of those who sent in requests, we have selected a few titles. The following products are now available on

Getting Things Done
David Allen

Good to Great
Jim Collins

The Dip
Seth Godin

The Idea Virus
Seth Godin

Guerrilla Marketing Handbook
Jay Conrad Levinson

The Wedge
Randy Schwantz

Again, my goal is to create a real resource for SMB Consultants. These products are more "generic," and join the 50+ items that are specifically focused on the SMB space. They also join the handful of other products, like The E-Myth, that every business owner should read, no matter what business you're in!

As always, thank you for your support.

Friday, July 11, 2008

Regulating Our Industry

See the story in our burg.

The Story

We have a state agency called the CA Bureau of Electronic and Appliance Repair. They regulate businesses who make house calls to repair Electronics and Appliances.

Most people think BEAR only regulates people who fix refrigerators and microwaves. But they also regulate any business that makes house calls to repair computers.

So they had a "sting" operation.

They called techno-goobers to come to a house to replace a CD-ROM.

If the technician was not properly licensed, they nabbed him as soon as he opened the case.

Our industry needs to be a lot more professional than it is.

At our Sacramento SBS User group on Tuesday, we talked about this. The consensus was:
Should you worry about this? No.
Should you get the registration? Yes, if you go to people's homes.

A side argument could be made about whether a $165 registration with zero requirements is just another stupid government program to take your money and burn it. But here's the absolute truth of the situation:

Anyone who is willing to accept a phone call from a complete stranger and drive across town to replace a CD-ROM needs to be regulated!

I pray that no one who reads this blog is in a position where they have to do that to earn a living. Get a job waving a sign at passing traffic:

You'll earn $120/day and you don't have to worry about the nerd police.

- - - - -

Here's what the BEAR requires.

- Customer must be given a written estimate

- Customer must authorize the repair.

- The estimate must be in writing

- The written estimate must be prepared before any work is performed

- The estimate must include all costs for parts, labor, and the initial service call, including all transportation and travel charges

- A repairman can revise an estimate by getting the customer's authorization for the additional repair and charge

- In addition, the bureau also regulates what must be included in an estimate, and how it can be revised

- And the they regulate claim checks, receipts, and all the information that must be recorded.

- - - - -

If there's a hierarchy of professionalism, this agency exists to regulate the bottom of that hierarchy.

But what about the rest of us? Who regulates us?

At some level, the community creates norms, talks them up, and "regulates their own."

Some membership organizations require their members to follow a code of conduct. The premier group here is ICCA -- see The ICCA Code of Ethics.

From time time, folks like Susan or the good folks on the managed services group recommend a little more regulation, a little more standardization, or a little more formalization of our industry.

Unfortunately, I don't know if any of that will help.

It helps that the likes of Cisco, SonicWall, and Microsoft have certification programs. But we as an industry need more than that.

We need to regulate each other and agree on some standards.

The biggest weakness in this pursuit is actually the successful (larger) companies. They realize that you don't get big by screwing one customer after another. You get big by systematically building quality and standards into you everyday procedures.

Client complaints are addressed in an organized fashion.

You rely on quality equipment, quality software, and quality partners.

You have a culture of focusing on doing the right thing.

So, what's the bottom line?

On one hand, the BEAR is a waste of resources. On the other hand, they provide some service and an attempt at regulating the bottom feeders in our business.

In the long run, for those of us who really do computer and network consulting as a business and a profession, they're irrelevant. What's relevant is our commitment to this profession as a profession.

So don't fear the knock on your door.

SMB Nation Reservations, Rooms, Airfare

Memo to the Community:

Amy B made an excellent point on the Ride Share/Room Share Yahoo group -- -- that it's a good idea to get your reservations early.

Three key points:

1) The close-by hotel (Marriott) WILL fill up. SMB Nation says the first bank of rooms is filled and they have opened a second. Some day there will be a flood of reservations and you'll find yourself at an overflow hotel.

2) It looks like the airlines are going to be notching their prices higher every week through "death by a thousand surcharges."

You'll pay $25 price increase, $25 fuel surcharge, $25 per bag, $25 per bag over weight. Somebody announced yesterday that they're removing the TVs in order to save fuel.


The point is, your airfare will never be cheaper than it is today.

3) Pre-day events are October 3, 2008. So you'll want to arrive either that morning (for Karl, Erick, Matt) or the night before (for Robin's all-day event).

More info at the SMB Preday web site.

Oh, and don't forget to register for the conference itself!

- - - - -

Amy B is looking for a female to share a room with one of her employees and is looking to make the reservation soon.

So, before you relax for your Summer Vacation, take a little time and make sure you have your air fare, hotel, and preday events all lined up.

The good news is that you'll have all that pesky stuff behind you.

- - - - -

Ride and Room Share:

Preday and Higher-Level Training:

SMB Nation:

See you there!

Wednesday, July 09, 2008

Warranties Matter a Lot

Last week, in my post on pricing, Feetsdr asked about the fascination with three year warranties.

Generally speaking, here's what we do on warranties:

1) We try very hard not to sell anything with less than a three year warranty (this applies most particularly to computers and servers).

2) For minor things we will accept a 1 year warranty, but we sell an extended warranty to cover it.

Why the fascination with warranties, and three years?

First, we expect a computer or server to last three years. At any point during that time, if something goes wrong, we want to pick up the phone, call the manufacturer, and make them fix it for free.

In this way, systems are covered by the manufacturer for the lifetime of the equipment.

Second, we sell HP Equipment because a three year warranty means a real three years. In other words, the hardware is intended to actually last that long. And 99.999% of the time it does.

There are two kinds of Three Year Warranties

First, there's the warranty you will never use.

I've been working with HP for more than fifteen years. In that time, I've experienced two bad hard drives and one bad power supply -- in thousands of computers. They are virtually flawless.

Warranties this good allow us to assume that the hardware will simply not fail. That, in turn, allows us to cover the warranty-related labor on all hardware -- because we assume there won't be any.

Second, there's the warranty you will probably use.

There's another brand we come across. A name you'd recognize. Their warranty service is excellent. We know this because we end up calling them a fair amount. Over the life of a server, I'd say the average is more than once a year. For laptops, it might be two or three times a year. Desktops? OMG. I've seen a shipment with 30% bad motherboards.

We don't sell that stuff. If we did, we'd have to charge for the labor to deal with tech support.

Warranties that you use cost you more money than warranties that you never use!

Here's how it works for us:

Option A: You buy the equipment from us. We sell HP. Therefore, we cover all warranty-related work. That consists of calling HP and asking them to live up to their warranty.

Option B: You buy equipment from someone other than us. We may or may not know what you've ordered. As a rule, it's the wrong thing, it's cheap, and it doesn't have a real warranty.

We then get to charge you for returning the junk, calling warranty support, switching out hard drives (Very often, such warranties are not Next Business Day on site. They are "ship it and do it yourself."), etc.

In other words, by saving up to $100 on day of purchase, you spend an hour here and an hour there over the life of the machine. In addition, you get to enjoy downtime.

We use the generic term "business class machine" to describe what we sell. That means:
- Three year (next business day, on site) warranty.
- Not shipped with a bunch of useless programs that need to be uninstalled.
- Built solid, with quality parts.
- Fast enough, powerful enough, and with enough memory to last three years.

These simple rules eliminate
- Crap that sells for $399
- Junk you buy from Best Buy, Walmart, etc.
- Low-end Dell junk
- Even low-end HP

You get the point, I hope. Quality equipment saves you money. It saves the client money. And, most importantly, the technology becomes just part of the background. Clients don't pay attention to it because nothing goes wrong. You don't pay attention to it becuase nothing goes wrong.

You can have that. Times five hundred machines.

Life is good.

Microsoft Sticks to Call-Back Only, Continues Free Server Down


Brevity is the soul of wit, and all that.

But there's a difference between being brief and being terse.

Microsoft stopped taking comments on the SBS blog due to the number of comments giving "feedback" on the new policy of callback-only support.

Then, yesterday afternoon, they posted a very short response.

Microsoft allowed seven comments. The next day, they responded to two comments with two sentences:

    This business change includes Business Critical Partner Support yet does not change any of the benefits of that program. Business Critical cases continue to be offered at no charge to our partners, the only change is that we will call you back once you call into 1-800-936-4900 to create the incident.

(see the original post.

And they responded to one other comment:

    "Callback really sucks in a lot of situations. The problem Michael touches on, plus if I am calling then I want to work on the problem now and not when it is convenient for some tech to call me back. If someone calls with a CritSit will they be given a live transfer?"

    with this response:

    A Critical Situation (CritSit) is a Premier offering ( and not a Professional support level offering. This business change is only for Professional SBS level customers, all Professional level SBS incidents will be handled on a call-back basis.



Shut up.

Be happy.

Wait for your callback.

The Good News, as Susan puts it, is that free support has not been eliminated.

So, you know that post about Microsoft's free server down support is like the emergency room on the Internet? Yeah. Forget that. Microsoft will continue to bleed unmeasurable amounts of money.

That's good for you.

But callback still sucks.

- - - - -

First, let's look at the original announcement. Why are we doing this?

  1. To eliminate your hold time on the telephone

  2. To collect the problem description and route the incident to the correct engineer

  3. To prepare you for online incident submission @

The future is one in which you will not talk to a human being until you receive a callback regarding your incident.


Second, what does your average call to Microsoft Support look like? Pick one:

1) Very relaxed and casual. Nothing urgent here. Just wanted to chat about a couple of things.

2) Generally relaxed. I have a problem, but it can wait.

3) Gnawing, annoying, issue. It's been going on for months. Would be nice if you could look at it.

4) I have a problem. It only affects a few people. But it needs some attention.

5) I have a serious problem. The company is losing money and they're all looking at me to fix it.

6) I have a serious problem. OMG. Everything's down. I need help NOW.

7) This is an absolute emergency. Everything's down. Absolutely no one can get anything done until this problem is solved.

Microsoft gets all these calls. But not from the SMB community.

At the small end of the spectrum, SBSC's and others who support SBS Server only call Microsoft's Professional Support in examples 5, 6, and 7.

Picture the last few calls to MS. The client is paying you a goodly sum to sit there, with a phone against your ear, until the business is back in business.

You don't call when Gwen in Finance can't get the animated gif to make the bears dance in her Outlook background.

You don't call when one user can't log on.

You don't call when one person has a corrupted profile.

You call when the company is down because the Exchange store won't mount, or some error keeps the entire server from booting.

Small business consultants call Microsoft Support during critical emergencies.

You don't have an $8,000 contract that lets you skip past the incompetent first-tier technical support.

Your boss isn't paying you to flirt on the phone.

You call Microsoft Support when your client is paying you big bugs to stick your phone to your ear and talk to the "miracle workers" at Microsoft until the business is back in business.

Have you ever created a "server down" incident with Microsoft?

First, you must agree that you will be available 24 hours a day, 7 days a week, non-stop.

Second, you agree that you will be at the computer. You won't leave a 5pm. You won't go home. You will be at that computer 24x7 until the problem is resolved. No potty breaks. No meals.

You will do absolutely nothing except sit by your phone and wait for the gods of Microsoft to contact you.

If you go to the bathroom, the deal's off.

So, how does the new policy work, exactly?

YOU have to sit by your phone completely attentive. You know not the day or the hour. But when The gods at Microsoft call, you will be chastened and ready.

I'm sorry. In the real world, when Microsoft calls back, you and your staff have moved on to something else. You are not sitting around on the clock doing absolutely nothing, waiting for Microsoft to call back.

Second, please do not forget that nothing else is changing.

--> The first-level of technical support will be completely incompetent. Yesterday they couldn't even spell SBS. Today they are Microsofts' first-tier support.

--> So, some completely incompetent tech, who has only one tool in his box, will call you back.

--> You will waste an hour of your life running the Internet Connection Wizard. An hour you will never get back.

--> And, if you live long enough, you will get escalated to Dallas.

--> Which is good

--> Because they're freakin' awesome

--> and the good folks in Dallas will call you back sometime now and 2099.

- - - - -

In the meantime, back in the real world, what are you doing?

Your client is down. You're onsite. Are you casually walking through the office chatting with people? "Hey, I've got some time on my hands. Waiting for Microsoft." No. Not so much.

Are you off the clock?

No. You can't leave. You can't go somewhere else and make money. So, billable or non-billable, your time is allocated to this client.

Think about when you've been called back by MS. Is "the next day" good for you?

- - - - -

Some people think I'm off base here. What about you?

Does this sound like a move in the right direction? Is callback-only support good?

I welcome your comments.

Sunday, July 06, 2008

Dear Microsoft: What Does Partner Relationship Mean To You?

Vlad, Vlad, Vlad.

First: Stop poking me with a stick!


Second: I have a long history of supporting a move to more professionalism in our profession.

Third: Sole Proprietor is not equal to "single point of failure."

In the 21st century, a sole proprietor can have spectacular support behind them. The larger SBS community, the local SBS user groups, Dove Help desk, MSPSN Help Desk, Zenith Help Desk, Eriq Neale help desk, and more.

Who knows? They might even get support from a Microsoft MVP.

Plus, a whole bunch of these Sole Entrepreneurs are extremely qualified technicians.

- - - - -

Overall, I'm a big believer that you run your business as you see fit; I run my business as I see fit; and Microsoft runs their business as they see fit.

But when a vendor (e.g., Microsoft) makes a major change in their channel support (e.g., eliminating free critical business support), then they owe their partners an explanation.

If any readers have not attended an XChange/Everything Channel event, I recommend they do. See this post, this post, this post, and this post.

Mature consultants know this: You align yourself with vendors who make the relationship worthwhile.

Rule One: You align yourself with vendors who make the relationship worthwhile.

Rule Two: You align yourself with vendors who are the most profitable.

Rule Three: Vendor Programs change. If you trust them, and it looks like you're headed in the right direction, you keep the vendor. If it looks like they're abandoning the channel that makes them successful, you find alternatives.

Having said all that,

Microsoft still needs to explain to the huge family of Small Business Specialists what they're doing with the Microsoft Support program.

You admit that the Microsoft Indian support sucks, but make up a story of how this is related to filtering buffoon consultants from the system. Okay, whatever. I believe that, if Microsoft could find technical support in India (or anywhere else) for four cents less per hour, they'd bite.

Microsoft needs to check off a box on their internal audit that says "Provided first level technical support." Yes/No.

There is no requirement that the first level of support for SBS is competent.

or that they've ever seen the product before.

Microsoft's highest level of technical support for SBS is spectacular and amazing.

You get there by one of three methods:

1) Call the support line. Pay your money. Talk to an unskilled, unprofessional, untrained technician. Get pissed off. Piss him off. Escalate the call. And four hours later, get yourself escalated to qualified technical support.

2) Work through back channels because you live in Dallas, golf with superstar team, have an inside contact, etc.

3) Pay $8,000 to get a straight line to competent tech support.

With very very few exceptions, the entry level support for SBS is as horrible as it has ever been. But starting in August, you'll have to pay for it, even with a server down!

Vlad, you have to remember that you are not the average Small Business Consultant. Your tech support needs are different from ours. Most consultants don't have an extra $8,000 to drop on Microsoft so they only talk to competent technicians. This change might not have an effect on your business, or my business, but it will have a serious effect on many sole entrepreneurs.

Let's see, if I support 15 servers, and Zenith charges me $450 per year to support them . . . I'll have more than $1,000 left over, and I'll never have to call Microsoft again.

Microsoft absolutely has the right to charge for tech support.

But when they make a change that dramatically affects their so-called partners, they need to explain what the change means to the relationship.

Channel Partner.

Partner relationship.

Channel Partner Relationship. It should mean something.

If it doesn't, find partners who take it seriously.

Friday, July 04, 2008

Microsoft's Emergency Room Reform Policy

(For links to the key Microsoft Support announcements, see the previous post.)

First, let me be very clear about one thing: Microsoft does not owe anyone free technical support unless there's a problem with their code.

Having said that, Microsoft does owe its channel partners some explanation for a dramatic change in direction and the removal of a long-standing benefit.

It all started "back in the day" with the SBS Two Free Incidents program. If you bought SBS, you used to get two free support calls from Microsoft over the course of the lifetime of a box. While it was intended to be a support program, it became educational. It allowed people who got "stuck" to learn the SBS Way by calling the pro's and getting some guidance.

That was a great program because it educated I.T. consultants on running the wizards and doing things the SBS Way.

But the two free incidents program morphed into the Free Server Down policy. The Free Server Down policy allowed an unlimited number of calls to MS Support, as long as you could convince them that the problem was affecting the whole company. Exchange is down? Obviously, that's an emergency. Boss can't open Outlook? You need some fast talking to get that covered.

But consultants did talk fast, and got a whole lot of "free" support for issues that were not really mission critical.

Microsoft's Free Server Down policy became the emergency room on the Internet. And it was just as abused as the emergency room at a hospital. And it bled money like the emergency room at a hospital. Consultants with runny noses took pride in calling Microsoft and not being charged.

Microsoft had to do something.

But they also owe the community an explanation.

I've been poking around on the support sites and blogs for Microsoft. Waiting to hear back on the critical question: Is this the end of free Server Down support?

At first glance, it looks like it.

- - - - -

At a minimum, shifting to a callback-only model will push a lot of people to other alternatives for technical support.

When the server is having problems -- even non-critical problems -- I want to spend my time working on the fix and not waiting for a callback.

It would also be nice to get some clarity on triage. If I have a low priority problem, and I'm in a queue with 2.7 Million other I.T. consultants, approximately what year will I get a callback? After all the Exchange crises. OK. After all the SQL crises? OK. After all the "EBS is so freakin' complicated" crises? OK.

Please, Microsoft, any fleshing-out of this policy would be greatly appreciated.

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The next question is price:

Is Microsoft's support worth the price?

$99 email support from someone whose native tongue is not my own. I'm thinking . . . no.

$259 phone support. Hmmmm . . . what else can I get for $259?

$515 after hours support. WTF? In a globally connected 24x7 world, when is after hours? 3PM Eastern Time is after hours? Business hours are 14:00 to 2:00 in GMT.

Why does this remind me of phone companies charging long distance when it's no longer relevant?

And who do we get for $259 or $515? Does this mean we'll get straight to the super heros in Dallas? No. You'll get a callback, eventually, from the least qualified technician on earth: Microsoft India. You'll still have to fend off their incompetence as you work your way up the food chain to someone who has actually seen SBS before you placed your call.

The basic plan works like this:

1) You call MS Support. Give them a credit card. Explain your problem.

2) Some kind of triage takes place.

3) SBS. Assigned to a technician we'll call Cousin Larry.

4) Cousin Larry loads a virtual machine with SBS. Now he can honestly say he's seen the product before he talks to you.

5) Cousin Larry is handed Eriq Neale's SBS2003 book to flip through.

6) Eventually, you get a call back. With luck, you're still in the I.T. industry.

- - - - -

We haven't used Microsoft's tech support for SBS in more than a year. The support we got was horrible, and they have a blatant disregard for issues of privacy.

So we've been paying for tech support already. We're just not paying Microsoft.

Side Bar: Spectacular Indian Tech Support

Let me introduce Zenith Infotech.

How Do I Get the Most Out of Zenith Infotech

Zenith vs. Microsoft

Indian Tech Support Kicks Booty

Zenith charges $37.50 per server, per month. That covers all maintenance. "Maintenance" means whatever it takes to move from not working to working.

Oh, and they're competent!

For $259 I can get six months worth of support and have lunch money left over.

For $515 I can get more than a year of support for one server and have breakfast, lunch, and dinner money left over.

- - - - -

Microsoft is intentionally making technical support more expensive.

There are alternatives. But most technicians are going to turn to the manufacturer (MS) for support.

Microsoft does not owe its channel partners free technical support. But when they make major changes in their support system, they should be aware of the effect this will have on their partners. More information would be nice.

Thursday, July 03, 2008

The Last Leg for SBS?

Microsoft annoucement: Two days ago Microsoft announced an earth-shattering change to their SBS support.

Please read the quick notes from Mark Crall and Susan Bradley.

Here's the Microsoft announcement: Free Server Down Tech Support is Over.

Oh, wait. That's not the announcement.

Here's the Microsoft announcement: Don't Call Us, We'll Call You Back. Eventually..

I'm sorry. The real announcement is:
Please schedule all emergencies during business hours. After all, the after 6PM support is $515 for a callback.

First, here are the official Microsoft links:

The annoucement:

Click on Small Business Server.

You have three options.

1) Email support costs $99.
    (Note: Advanced support is not covered under this charge.) Major credit cards accepted.
    You may also use this option if you have one of the following:
    -Software Assurance Agreement
    -Professional Contract
    -TechNet Subscription
    -MSDN Subscription
    -Expression Subscription
    -Microsoft Partner Program (MSPP)

2) Wait for the phone to ring. $259 during daylight hours. Else $515.
    You may also use this option if you have one of the following:
    -Software Assurance Agreement
    -Professional Contract
    -TechNet Subscription
    -MSDN Subscription
    -Expression Subscription
    -MSPP (Microsoft Partner Program)

    Response Time:Will vary based on severity.

3) Submit a support request by phone. Phone wait times will vary between hours and death.
    Unable to submit your support request online?
    Speak with an agent to submit your incident. You will be routed to a support professional or receive a callback from one.
    Have the following information ready when you call:
    Details about your issue
    Your preferred contact method

    Availability: 24 hours
    Cost: $259 during daylight hours. Else $515.

    Response Time: Will vary based on severity. (except if it is business-critical*)

    *Business-critical issues are situations where production or profitability are severely affected because of a problem with the system, network, server, or program that you are calling about.

    A 5-pack Phone Support Contract is available for $1289.00 US. For more information call (800) 936-3500.

    Support Phone Number: (800) 936-4900
    TDD/TTY (800) 892-5234

    You may also use this option if you have one of the following:
    -Software Assurance Agreement
    -Professional Contract
    -TechNet Subscription
    -MSDN Subscription
    -Expression Subscription
    -Microsoft Partner Program (MSPP)

Here's the Microsoft After-Hours Support Policy.

I humbly request that you read some words I wrote more than a year ago regarding The Death of SBS.

This issue is complicated and takes a little thought to straighten out.

At some level, this is bad news for amateur consultants who should be flipping burgers instead of working on computers.

At a different level, this is a complete admission by Microsoft tech support that their first-tier Indian support system is the worst failure since Windows ME.

Small Business Server 2008 hasn't even been released. And it seems clear that it will be the last version you will see.

Please go read those posts.

Then I'll post a few thoughts.

Tuesday, July 01, 2008

Guide to Marketing Managed Services has arrived!

It's here!

Matt Makowicz's newest book -- A Guide to Marketing Managed Services has arrived!

It was due out July 4th. Luckily for you, it's early.

And it's on sale right now.

See the Sale Details.

Combine all the discounts you can get your hands on.

Right now you can buy Matt's new book for only $79.95 at SMB Books. Check it out now.

Or you can combine Matt's new book with Matt's first book (normally $99.95) for only $149.95.


It gets better.

During the sale, any order over $100 earns you a $10 discount.

So you can combine Matt's new book with almost any other book (or CD) and get the $10 discount.

It's like a "create your own bundle" deal.

And don't forget: Orders over $300 get free standard shipping.

- - - - -

Somebody hand me ginzu knives!

Sale ends Friday.

Pricing: Don't Settle for 1%

How do you determine your pricing?

A few months ago, at the XChange event in L.A., I had a discussion with about a dozen friends/strangers on an executive board.

They were asking "How can you charge that much?" and I answered: Because this is America, and I can do whatever I want.

As far as I can figure it out, there are three ways to determine what you will charge for hardware, software, and materials.

First, you can set a standard percentage you need to make in order to make it worth your while to be selling this stuff.

Second, you can look at the MSRP (Manufacturer's Suggested Retail Price)and figure out how to be as close to that as possible.

Third, you can scour the Internet looking for the lowest price in the history of the world -- and match it.

Uhhh . . .

Errrrr . . .


Number Three is stupid. Let's not do that.


When a client asks us for a quote, we do an average of 30 minutes of work to produce a quote. We don't charge for that. But, in reality, the value is about $75 -- half an hour's labor.

So when a client comes back to us and says "We saw this on pricegrabber for seven cents cheaper," our response is:

Go buy from that other source.


The last time we did this was . . . Last week.

Here's the big picture: We're not in the business of selling hardware. We're not in the business of selling software. We're not in the business of selling cables. We sell exactly the right thing that the client needs, at the right time. Any variance from that is . . . not exactly the right thing the client needs at the right time.

For Example, let's say a client needs three thin clients and a windows desktop. We quote them something (HP all the way, with enough juice to last three or four years). The client says "pooh-pooh" and buys someotherpieceofcrap on the internet for $100 less.

When the junk shows up, the thin clients are under-powered, the desktop has no office software, the monitor is cracked, and the whole lot has a 90 day warranty.

We charge the client to RMA the broken junk. Now their savings has been flushed down the toilet.

Lesson: We sell the right thing every time. Everything has a 3-year warranty. If it's not right, we take it back at no additional cost.

Over time, the client learns that it is cheaper to "pay a little more" with KPE because it's cheaper in the long run. Every single time a client has "saved money" with some junk they found on the Internet, they paid more in the long run.

And what if the client wants us to scour the internet looking for junk? We charge our regular rate for that. After all, it will take time that we could be selling to someone else. And, in the end, time is one of the things we sell.


So, if you don't troll the Internet for blue light specials, that leaves two options: Try to match the MSRP or set a standard markup.

MSRP is tough to match, especially when you're small.

I remember when I first set up an account with Ingram. I went to buy a printer. My cost was five dollars below MSRP -- on a $1,200 printer. It was cheaper for me to buy it at Staples. Of course that's why people head down the road of buying this stuff from sources other than the channel.

Even now, many manufacturers set prices so they are 2-3% below MSRP. Occasionally a vendor will brag that you can earn seven percent on their equipment.

But we can't afford to earn 7%. When you sell a good amount of hardware and software, you learn that "stuff happens." A box shows up dented. A client changes their mind. You have to RMA a thing here and a thing there.

There is overhead to selling hardware and software. And if you're not charging your labor rate for this work, you need to make money somehow.

We've discovered over time that we need to make 20-25% on hardware and software to make it worthwhile to be in the business.

If we have a client who orders regularly and doesn't return things, we start rounding down. After all, if they make it easy on us, and eliminate the returns, then we can make money with a smaller percentage.

I've talked to some consultants who mark up everything 50% or even 100%. As a rule, they don't sell a lot of stuff.

If you ask "How can you do that?" the answer is simple. You just do it.

If the client says that it's too much and they can get it cheaper on the Internet, then either they need to go shop on the Internet, or they need to pay you to shop in the Internet. As a rule, if you're not directly involved in the process, they are likely to buy cheap stuff, the wrong stuff, or refurbished stuff.

It doesn't matter how much you sell: you can't beat Best Buy or Walmart on most prices. Don't try.

You need to charge what you need to charge in order to make it worthwhile to be in the business.

And you need to stop caring about whether the client buys from you. If they're going to jerk you around on prices, make you spend time quoting and requoting, and then not pay you for your time, then you should not be selling equipment to them!

It's a simple rule of business: You need to charge enough to make it worth your while.

Interestingly enough, we find that we are cheaper on a lot of the small stuff. For example, we might buy a CAT6 cable for $5 and sell it for $5.99. Fry's will sell the same cable for $20 and Staples will sell it for $30.

We just apply our standard markup.


Two last notes on process: Get a signed quote/purchase order and get prepayment.

Clients are human. They forget things; they get excited about things; they change their minds. If you're in business for very long, you'll have the experience of having a client say "Yes. Absolutely. Get that as fast as possible." and then cancel the request a week later.

We try to have a limit on what clients can order without an official purchase order. For everything else, we quote the product and ask them to fax the signed quote back to us. Once we get the signed quote, we invoice the client.

After they pay the invoice, we order the product. Obviously, the fastest way to get all this done is with a credit card.

It has always confused me that consultants don't get prepaid for hardware and software. Are you the bank? (No, you're not the bank.)

If the client buys online, they'll put in a credit card and wait for the goods. Why should you extend credit to them?

Eventually, even your best clients will have a change of heart, change of mind, or change of circumstances. So, for example, they might change their mind after approving the quote, after you order the equipment, and before they've paid for it. You might have policies about refunds and restocking fees. But the whole thing just went from profitable to unprofitable (or break even).

Prepayment should be the norm. Just do it.