E-Handbook:

IT managed services companies: Making the transition work

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Worlds collide for channel partners in transition

In 1950, Immanuel Velikovsky published Worlds in Collision, a book that advanced the notion Venus passed close to Earth during ancient history, causing numerous catastrophes recorded in mythology.

Channel partners pursuing new business models face their own Worlds in Collision scenario. The colliding "worlds" of break/fix, cost-plus contracting, billable hours, subscription-based revenue and value-based pricing keep IT managed services companies up at night. How can they transition their current state to their hoped-for business model while minimizing disruption?

Some partners have concluded it's easier to start over than attempt a business model transition. But plenty decide to transform what they have.

Those companies work through various transition types.

Traditional reseller to managed services provider (MSP). While IT managed services companies have existed since the late 1990s, the shift to monthly recurring revenue continues.

MSP to cloud solutions provider. Many MSPs, having gone through one transition, now find themselves embarking on another as they seek to remain relevant to customers migrating to the cloud.

Variations on those transitions. Partners in the product resale and break/fix sectors that haven't made the MSP shift may skip that stage entirely as they enter the cloud business.

Partners can expect challenges, regardless of which transition they pursue. They must evaluate new services, hire or retrain staffers, purchase new business management systems and align with different vendors. Packaging, pricing, marketing and selling services are also important considerations.

Worlds in Collision became controversial, as scientists rejected the Venus theory as violating accepted science around celestial mechanics. With respect to partners' colliding worlds, disagreements over getting from point A to point B are inevitable. What isn't controversial is the difficulty of the job ahead.