Newbie Terminology: What Is A "Channel" and Why Do I Care?

Our industry has so much jargon that we sometimes fail to define our terms. Folks new to IT consulting (and some older folks as well) might not be familiar with the term "Channel." In fact, some people use the term so broadly that they refer to the entire IT community as the channel. Here are some thoughts, intended to clarity.

The the broadest sense of the word, a channel is an industry-specific ecosystem that includes all the actors from the manufacturer or developer, through the distributor and consultant, to the end end user. One simple channel is displayed in this diagram.

In the IT channel, manufacturers include all the brand names you know and might resell. These might include hardware , software, and services. Distributors include aggregators (so, for example, both Ingram Micro and Sherweb).

From a broader perspective, the channel includes industry magazines, news web sites, industry analysts, podcasters, bloggers, membership communities, and all the folks who put on various events.

We frequently refer to manufacturers and developers as Vendors. Vendors make the physical and digital stuff we sell, including services. And, of course, there are combinations. Some distributors create services, so they are both the developer and the distributor of their services. And some developers combine their creations with others' creations or services and begin to look like mini-distributors.

From time to time, you might hear the terms channel-only or channel-friendly. Channel-only vendors only sell directly to IT consultants (their resellers) or through distributors. They do not sell to end-user clients. The most channel-conscious vendors will connect end users to their resellers.

Channel-friendly companies might be very friendly to their resellers, or they might be less friendly. As a rule, the companies that call themselves channel-friendly try to sell through the channel. But, all too often, they also sell directly to end users. 

And that brings us to the natural tension in channel relationships: It is very tempting for vendors to sell directly to end users and cut out the "middleman." That's you. In the big picture, there's nothing wrong with this - unless the vendor has promised to only sell through the channel. All vendors have this temptation. Over time, fewer and fewer of them manage to resist the temptation completely.

Many vendors openly sell through the channel and directly. Perhaps the largest companies you deal with on this front are Microsoft, HP, and Cisco. If you're an IT reseller, you probably refer to this as vendors competing with their channel partners (resellers). Recently, I heard this referred to as co-selling. When Microsoft first admitted that they were going to go all-out to compete their "partners," they referred to it as disintermediation (see this blog post).

If you ever need a great example of how companies do a bad job of managing channel partnerships, ask someone about their relationship with Dell. Time and time again, Dell revamps their partner program. They promise to protect you and never sell against you. They let you register prospects, so their inside sales people know to leave them alone.

But . . . they also do nothing to change the incentives of inside sales people. And because those folks make money by poaching your clients, they poach your clients. Sales people will do what they are paid to do. So, beware of the actions of your vendor "partners" in addition to their words.

Microsoft has been very honest about their approach. As they were dismantling their partner network and renaming it to eliminate the word partner, their message was: You won't make any money by reselling our products. But you'll make money selling services related to our products. Shockingly, that didn't work very well. So, now you can make a little money. But you have to sell a lot of licenses to make it worth your while.

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Your Action Steps

If you're new to the concept of channel sales, or the IT channel, you need to decide how much you care. Some people do not include profit from resale into their business model. So, sometimes they make money and sometimes not. Instead, their profit comes 100% from labor - consultation. 

Other companies make a point of working with channel-only vendors whenever possible. This gives them a direct channel for acquiring products and services, and maybe even new clients. And they know that their "partner" will not be competing against them. Note: As I mentioned, pure-play channel-only vendors are becoming harder to find.

Here are a few actions to consider. First, determine how much you care. Will you seek channel-only vendors (or "channel first" or "channel friendly)? Second, evaluate your current suppliers. You may need to have discussions on forums or at conferences to find out how channel friendly your current vendors are. 

Third, learn about the channel commitment of future vendors. Remember, the channel-focused commitment goes both ways. For vendors, the commitment to channel-only sales is a tough decision. They are rewarded when MSPs commit to working as much as possible with channel-only vendors. Building a solution stack made up of exclusively channel-only vendors rewards those vendors who have made the decision to forego direct sales.

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Please let me know if you are new to the channel and would like me to give my two cents on other terminology you've heard. Welcome - and good luck!

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The Unpopular Truth about KPIs, SLAs, and SMB IT - Webinar April 10th

The Unpopular Truth about KPIs, SLAs, and SMB IT

We all love to measure things. And we’re eager to learn the “industry standards” for successful businesses so we can see how we stack up. But we can also get carried away by measuring too much, measuring the wrong things, and implementing changes when we don’t actually understand the implications of what we’re measuring.

Please join me for a free webinar

April 10th
9:00 AM Pacific / Noon Eastern

Register Now:
https://mspwebinar.com/measuring-success/

Way back in January, I promised a focus on creating a "systems" approach to your IT business. In this informative and entertaining webinar, I begin to show you how to implement that approach. Critical to that success is to implement measures that help your business more than they hurt.

Note: I takes a very different approach from most “coaches” who are really just trying to sell something else. I am not selling anything in this webinar.

Here's a hint about my approach: Most KPIs are useless or harmful to your business. I believe you should measure frequently but make changes infrequently. Most importantly, you should not hold employees accountable for most of what you measure! But don't worry - I won't leave you hanging. There are things you should measure. More importantly, there's an overall view of your business that will lead to success.

This will be a different kinds of webinar. It is scheduled for 90 minutes and will go over if there are lots of questions. The first 60 minutes will be the primary presentation. After that, we’ll dig into some very specific examples along with Q&A. Join us – and take the time to improve your business dramatically.

As always, I promise that I will NOT waste your time! My goal is to help you to be as successful as possible. This webinar will lighten your workload, reduce your stress, and give you a better understanding of how your business works.

https://mspwebinar.com/measuring-success/

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Women in Tech 2024: A Failing Report Card

I'm sorry to post this on International Women's Day, but the IT industry has been failing women for . . . well, forever.

As the father of a smart, nerdy, left-brained woman, I have tried to do what I can in my business and profession to improve the environment for women in our industry. But I'm sad to report that our industry has been headed in the wrong direction for decades. Like my daughter, MOST women with aptitude for this industry never give it serious consideration as a career.

Only 27% of women ever consider a career in tech. This compares to 62% of men.* There are two primary reasons for this. The well-documented reason is that women do not advance in tech careers the way men do. The stats on this are overwhelming and not improving. We need to create paths for women to move up.

The other major reason is that women simply do not choose to enter our industry at all. Why? They do not feel welcome. While we as an industry make some effort to increase awareness and advancement, we have failed on making women feel like this is a great career choice for them.

"The numbers" are one thing. But numbers can change when attitudes change and women feel welcome to be part of our industry.

Note: The focus of my concern is not women in marketing, support services, or front office. Where we are failing is female business owners and female technicians. Those of us who are active in the industry can all name ten or even twenty women in these roles in the SMB IT community. And that is a very, very sad number.

A lot of the stats are driven by large companies (with 10,000 or more employees each). In the SMB space, the numbers are much, much worse. Twenty years ago, more than ten percent of conference attendees in the SMB space were women. Today, it's around three percent.

This is not just about "awareness training" and educating mid-marketing hiring managers. We have active discrimination against women in our industry. 

No one wants to talk about it publicly, but many women do not feel safe or welcome at many in-person events in our industry. So, they opt out and visible numbers reflect this. 

More than half of the women in our industry say that they have experienced sexual harassment.** But if you ask a group of women in a live setting, they will all jump on that statistic and say it is way too low. Many will argue that the number is closer to 100%.

In "Big Tech," women are about 27% of the employment force. This number is down from just a few years ago. And the situation is worse in SMB. Nationwide, women own about forty percent of all small businesses. That sounds great. But no one would argue that the numbers for SMB IT are anywhere near that.

We Need a More Realistic Action Plan

I have served on several committees with names that focus on women in IT, but time and time again, the results are the same: These committees are filled with lots of people from sales, marketing, and management, often from larger companies. There are few or no women who own small businesses or are technicians in small businesses.

These groups are very good at getting articles published and good PR. And we need that! But we also need to do more to reach out to young women and make them feel welcome in this industry. We have started the good work of making women more visible in our industry. But we are clearly failing to make them feel welcome. 

And we are failing at the only thing that will make a difference in the long-run: Convincing women to start IT consulting businesses or choose a career as helpdesk engineers.

A few years ago, I offered $100 stipend to any woman in our industry who wanted to attend a specific conference I was being paid to speak at. The result was tremendous - twenty-five women attended an event with about a hundred total attendees. This was NOT about the money. They could all afford $100. The difference was: There was a concerted effort to invite women and make them feel welcome.

I fully admit: I don't have the answer.

I don't know how we overcome this sixty-year-old challenge.

But we have to do something. Our daughters are missing out because they are opting out. Our industry  and community are missing out because we have alienated half of our potential membership. And women are missing out because IT consulting is a GREAT career. Technicians earn good money. And we generally have flexible hours. Business owners in IT can build a very nice lifestyle. And the flexibility for owners is better than just about any industry, anywhere.

It starts with awareness. I hope there are a few men still reading to the end of this blog. Why? Because it's the men who have to make this happen. We need to figure out ways to make this industry a place where the entire population feels welcome. 

There's an interesting irony in all of this: Tech people tend to be REALLY smart. We solve puzzles for a living. We figure things out. So we absolutely can solve this problem if we try. We just have to decide, as an industry, that it's time to try. It's time to actively encourage women to get into IT, to get the training, get the jobs, and start the businesses.

I'm sorry I don't have the answers, but I do have the faith that we can do anything we set our minds to. We can make women feel welcome and safe at our conferences. We can welcome them to our meetings and events. We can start today to figuring this out.

I am open to any suggestions you might have. Throw them in the comments. 

It's International Women's Day. And I celebrate all the amazing women I've had the pleasure of working with. I just wish more of them were in the industry I call home.

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 * AI Bees has a nice historical summary and some sobering statistics here: https://www.ai-bees.io/post/women-in-tech-history-and-the-future.

 ** Jessica Hubbert has a great collection of stats on the Exploding Topics web site, here: https://explodingtopics.com/blog/women-in-tech. 

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Do You Own Client Configurations?

Recently, I've come across a new way of looking at the services we deliver: MSPs claim to "own" the configuration of their clients' equipment.

Example One: The firewall configuration is our unique intellectual property. The argument here is that the MSP takes an off-the-shelf firewall and adds their secret sauce to create a unique device. And, by extension, another MSP might be able to learn all the configuration details and thereby improve their own firewall configurations.

Example Two: An MSP has been leasing equipment to a client, including the Domain Controller. The out-going MSP refuses to share directory access so the in-coming MSP can build a backup DC and then update the FSMO roles and promote it to primary. Again, the argue boils down to secret sauce. Somehow, the configuration of the Active Directory is proprietary technology.

I strongly object to this line of thinking for several reasons. Here are the top three.

First: This is simply unprofessional behavior. While thinly veiled, the real motivation here is that the outgoing MSP (the one losing the client) believes that holding onto this information will somehow do something positive for their business. They are sore losers. And this kind of behavior will only piss off the client (and other professionals involved). 

I always think it's a good policy to lose gracefully, if you have to lose. If you handle it well, that client might see the error in their ways and invite you back some day. On more than one occasion, I've lost a client who wanted us back a year later. If we held their equipment or configurations hostage, they would never have wanted to come back.

We'll come back to this.

Second: The client has paid for the configuration work. Unless you have a contract to the contrary, the client pays you to configure all their hardware, software, and services. It's absurd to think that the selection of inputs and menu options is somehow unique and beyond the common practices of every single IT consultant in your market. 

Clearly, the operating system of a firewall is the intellectual property of the firewall designer. But the configuration of a specific firewall is not really some kind of secret sauce, right? That’s just a collection of settings enabled by the OS.

I have seen this kind of behavior (trying to keep owners out of their firewalls, routers, switches, servers, services, etc.) for thirty years. It never works. Ever. Once a client has decided to change IT consultants, the out-going MSP has lost the job. It's too late to try to hang on by denying the client access to the configurations and settings they've already paid for as "work for hire."

A few years ago, I went looking for consultants that would help me fine-tune my Google ads. Some of them were upfront about the configuration changes they would make to my Google Ads account: They considered their genius to be so great that, if I were to ever leave them, I had to agree that they would set my entire account back to what it was on the day they took over. This was written into their contract. 

Of course, I did not hire any of these folks. I think it's a horrible practice, BUT they were not being unprofessional or dishonest. They made it clear up front, so I could choose whether to do business with them. 

Third: There is no secret sauce. Aside from being unprofessional, all of this behavior assumes that an MSP has some amazing Secret Sauce that no on else possesses. I've only been in this business professionally for thirty years, but I have never actually met anyone who has secret sauce. 

Firewalls can be configured well or poorly. Active Directory can be set up sloppily or precisely. Documentation of these might be thorough or sparse - or even non-existent. So, the only "secret" is to do your job well and to act as professionally as you can. Work a bit harder than your competition. Work a bit smarter. Be more consistent. Have better daily practices.

I have long argued that Secret Sauce comes in a clear glass jar with the ingredients labeled on the back. In other words: Everyone knows what it is! If you are dedicated to great service, and providing excellent technical support, then you will always have customers who love you. Your unique selling proposition is the totality of your company, your employees, your processes, and your documentation.

Who needs secret sauce when you have YOU, your processes, your employees, and your excellent habits? 

I hope this trend of claiming "intellectual property" for doing your job is short lived. It is just the latest manifestation of unprofessional people pretending to be professional IT consultants and making our industry look bad in the process. Every time one of these losers gets away with thing kind of behavior, one more client has a story about how horrible IT consultants behave. That reduces trust in all future relationships with IT professionals.

Once again, the warning goes out: Don't let our industry slide into the kind of reputation enjoyed by car salesmen!

:-)

The ASCII Group Introduces the Channel Legacy Partnership Awards at ASCII Edge Events 2024

The ASCII Group Introduces the Channel Legacy Partnership Awards at ASCII Edge Events 2024

Washington, DC – March 4, 2024 – The ASCII Group, a renowned membership-based community of independent North American Managed Service Providers (MSPs), is pleased to announce the introduction of the Channel Legacy Partnership Awards at ASCII Edge Events 2024. As The ASCII Group commemorates its 40th anniversary this year, they are honoring channel vendors who have demonstrated unwavering commitment by partnering with the ASCII community for 20 years or more.

The Channel Legacy Partnership Awards serve as a testament to the enduring relationships between The ASCII Group and its esteemed channel vendors. Through their sustained partnerships, they have played a pivotal role in fostering growth, facilitating networking opportunities, and driving innovation within the MSP community. 

Legacy Awards will be presented at ASCII Edge, the premier multi-city events where nearly 2,000 industry professionals, technology vendors, and leaders come together for two power-packed days of collaboration and growth. With events in nine cities across North America, ASCII Edge is specifically curated for the modern MSP. 

"We are delighted to introduce the Channel Legacy Partnership Awards as part of our 40th-anniversary celebrations," said Alan Weinberger, Chairman and CEO of The ASCII Group. "These awards are a tribute to the exceptional dedication and contributions of our long-standing channel partners. Their steadfast commitment to The ASCII Group and its members exemplifies the spirit of collaboration and community that defines our organization."

The first Channel Legacy Partnership Awards were presented on February 29 at ASCII Edge Costa Mesa, and the recipients included Kaseya, D&H, CompTIA, and Sophos.

"We are proud to celebrate these exceptional channel vendors who have been by our side for over two decades," added Weinberger. "Their commitment to The ASCII Group and the community at large is truly commendable."

For more information about ASCII Edge Events 2024, please visit https://events.ascii.com/. 

About The ASCII Group, Inc:

The ASCII Group is the premier community of North American MSPs, MSSPs and Solution Providers. The Group has members located throughout the U.S. and Canada, and membership encompasses everyone from credentialed MSPs serving the SMB community to multi-location solution providers with a national and international reach. Founded in 1984, ASCII provides services to members including leveraged purchasing programs, education and training, marketing assistance, extensive peer interaction and more. ASCII works with a vibrant ecosystem of leading and major technology vendors that complement the ASCII community and support the mission of helping MSPs to grow their businesses. For more information, please visit www.ascii.com. 

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