What if? What if automobile manufactures had both direct sales (e.g. Tesla) and a channel (e.g. CarMax)? Such a strategy would cause tension to say the least.
Yet this is already occurring in our beloved Small and Medium Business (SMB) - Managed Service Provider (MSP) ecosystem. I don’t know if the SMB MSP community sponsors all went to the same weekend seminar at a third tier airport hotel in a function room but I’m hearing the strategy articulated more than ever.
Historically the worst offender of this bifurcated pathway is Austin-based Dell. Just ask any MSP what they think of Dell. LOL. But more concerning is that beloved MSP ISV sponsors are increasingly going direct to the customer. This cuts out the channel partner boohoo. They all start out as channel-friendly and channel-only. When in the early growth stage (RECRUIT mode), they give the smaller MSPs lots of love.
But as the MSP ISV becomes more established (Defend mode) and they have built a successful channel partner program, two things happen:
- They have the “bright idea” to incorporate a direct sales strategy. They get giddy like they invented the motion after they have consumed the “direct potion.” I’d name names but a true gentleman never kisses and tells ;).
- They go upstream like a spawning salmon! A common business paradigm is the flight to quality. By analogy you see it all the time with commercial real estate tenants who upgrade to Class A office spaces on the cheap in a recession. Here MSP ISVs think going after the big guys is the new nirvana. But proceed with caution. This MSP big dogs get hit on more than a good looking chick in a bar. And they have already made their tech stack decisions and it’s be akin to a traumatic event to migrate to the next shiny fishing lure trolling for Alaska salmon.They didn’t get to where they are by making knee jerk reactions. Also the sales cycle is much longer. Seen this and saw that. MSP owners become FUSSY when confronted with 3, 6 and 9 month sales cycles.
So this is the world we live in and increasingly this is what the MSP market landscape looks like.