BYPASSING IT DEPARTMENTS
This level of Cloud sophistication in the market has surpassed industry expectations and made Australia one of the most advanced Cloud markets in the world. As a result, the conversations the channel is having with their business partners have changed rapidly.
IT managers and their departments are being cut out of the loop, and increasingly conversations are with C-level executives.
“We’re finding as products evolve and the technology becomes a lot better that the IT companies are shrinking; there’s certainly very little hiring going on. It’s much more of a business conversation now than an IT conversation,” Wright said.
“The owners of the business typically would just say ‘look, we know we need to do it.’ It does come back to that consumption model versus the upfront cost.
“It’s a fraction of the price of refreshing three or four servers, and then you just pay per user, per month. So that’s typically what’s driving it. Funny, people think it’s all about price but it’s not. If you can demonstrate the value around the redundancy, potentially a reduction in headcount, and it’s not necessarily just ‘I’m saving money’, you just don’t need to worry about it. You’re outsourcing that worry about your IT to us, that’s what we do. We are the experts.”
Sean Bishop, director of Melbourne-based Harbour IT, added a big selling point for these customers is passing on that risk – which also means that Service Level Agreements (SLAs) have to be tighter than ever before. That alone can be the differentiator between success and failure.
“On face value we can all look the same, but when customers start doing their due diligence they employ a company to do risk management,” he said. “Then of course you’ve got your SLAs – and they’re getting all legal. I mean there’s a lot more legal involved.”
Rhipe senior vice-president of strategic alliances, Warren Nolan, said getting the SLA right up front, can save problems later, and even open up new opportunities for sales.
“Touching on the SLA, once you’ve managed to take more and more workload on as a result of actually meeting an initial SLA commitment, such as around email, you are then able to meet those cost savings, they are more productive. You create those efficiencies, lower the cost, get the opex going and then as a result those larger clients bring more and more workloads to you,” Nolan said.
One thing remains a constant, and that is ensuring you have the right people to reach out to your customers, be they sales, support or tech. Rhipe COO, Dawn Edmonds, said the modern Cloud service provider needs to ensure it has the right company culture in place. “It’s still about getting the right people, the right processes in place and even the culture. But how do you do that? Look at your focus in terms of your recruitment drive and people management,” she said.
This is especially important for the incumbents when dealing with the new players on the market, which has created a far more competitive and cutthroat environment. Older MSPs looking to make the transition often don’t have the discipline or professionalism to beat rivals – often customers assume that anyone and everyone can provide Cloud, Edmonds said.
Veeam vice-president of APAC and Japan, Don Williams, claimed in the Australian market, trusted relationships are absolutely key.
“The thing that differentiates us from our other competitors is that we put a big emphasis on that relationship. Sure the technology might be the same environment and it may be very similar outcomes, but it’s that relationship that we’ve had. You can call us at all hours. We’re mates. We go to each other’s kid’s birthday parties and all that kind of thing, so you’ve got to have that relationship with a customer that is really strong,” he said.
Gage agreed, with some caveats. The relationships of the past are changing quickly.
“The fact is, over 50 per cent of IT purchases are now made by non-IT people. Some of our partners feel like they are the trusted adviser to the IT contact, but the IT contact no longer has a budget, so those decisions are going elsewhere. We are seeing new partners emerge in some of our customers because the existing partner doesn’t necessarily have the relationship with the CMO or the CEO. I think that there is a risk to some of our partners that still have the perception that ‘It’s okay I’ve a trusted relationship with the IT manager or the CIO,” he said.
VMware director of channel sales, John Donovan, said the changing pace of technology adoption has caught a lot of companies off guard, including vendors.
“It’s changing so rapidly, and constantly, that I’m wondering what sort of pressures that places on businesses. Organisations like VMware and Microsoft and others create these massive public Cloud infrastructures, and then invest heavily in the service provider community, and then invest heavily in the technology that sits behind all of that as well,” he said.
Nicholas agreed, noting that one of the major pressures on any business, especially the smaller ones, is keeping staff up to speed.
“We’re still a small business so it places a lot of pressure on us, but also makes your staff so much more valuable and the training you invest in them. We’ve changed our cycle of not just attracting people into that business, but also rewarding them and retaining them and the training is so critical. It’s just about trying to keep everyone current. The effort to get guys to go and study – in their own time or by giving them time off, is a real challenge, just to keep them up to date,” he said.