Embracing change to become a managed service provider

Main visual : Embracing change to become a managed service provider

Customer desires and expectations are changing. Businesses now want the flexibility and effortless scalability associated with cloud-based and ‘as-a-service’ models. They also only want to pay for what they actually consume, rather than investing heavily upfront in infrastructure.

This has led to huge growth in ‘everything-as-a-service’ (XaaS), particularly in hardware Infrastructure-as-a-Service (IaaS), which saw an impressive uptick of 36.8 percent in 2017.

The opportunity for channel partners

These trends are creating new opportunities for channel partners to support their customers as they undertake digital transformation. But to do so, channel partners must also transform, by moving from a vendor-led model to one driven by their customers’ specific requirements and challenges.

The rewards of embracing these new revenue streams and business opportunities are large, but partners need to first create an effective business strategy to capitalize on them.

Many partners are finding that they are being held back by their legacy hardware-focused business models. To keep pace with technological change they will need to reinvent themselves and:

  • Acquire new skills – not just vertical skills and expertise, but also technical depth and application development.
  • Forge new relationships: to address the new opportunities, partners must be able to engage customers from the C-level to the lines of business, including Dev Ops
  • Deliver positive business outcomes: The end-goal is their customers’ digital transformation regardless of the vendor brands they sell.
  • Build their own IP to differentiate: The aim is for partners to position themselves independently of their vendor range.

Steps towards success as a managed service provider

Of course, these are not changes that can be undertaken overnight. Those partners that have taken the plunge and who are now successfully transitioning to become managed services providers have multi-year plans in place – which involve gradually increasing the percentage of managed services they sell.

At the same time, they are closely controlling their finances to accommodate the changes in cash -flow that this new business model brings. Essentially, some of their usual up-front revenues are sacrificed as deals are converted to monthly recurring payments. But the great news is, they now have fruitful, long-term customer relationships, rather than a series of one-off deals.

There are also other considerations to take into account. A key trap to avoid is offering the same undifferentiated services as the competition – that approach is a fast track to a price war. Partners should instead focus on building a complete package of products and value-adding services to customers – based on their unique experience, industry and technology knowledge, and the value of the guidance they can provide.

Once the unique selling proposition has been identified, it is time to revisit the sales approach –as selling managed services should be more of a conversation than a presentation. This is where having a good understanding of customers’ pain points is invaluable – as you’ll have the opportunity to discuss them and share how your new services can address them while also enabling them to reach their bigger picture goals.

Fujitsu – supporting the transition for channel partners

But of course, the actual services on offer are the key! Fujitsu is supporting partners as they transition to managed services providers with multiple different attractive options. For example:

For those that want to become Cloud Service Providers, the key challenge is that there’s already a great deal of choice for customers today, so the opportunity lies in deciding where to focus efforts and where to create unique value-adding services.

Ultimately, there’s the opportunity for partners to eventually acquire hardware to set up a dedicated data center, but the starting point could be integrating converged or hyper-converged infrastructures, integrating various XaaS offerings, using colocation providers or simply including public cloud elements into their offering.

At Fujitsu we offer a selection of products to help partners establish themselves as Cloud service providers – for example, PRIMEFLEX infrastructures and multi-tenant SAP landscape solutions and a series of data protection options, based on solutions such as Fujitsu’s ETERNUS range.

Fujitsu also provides flexible procurement options to ease the financial transition, for example by helping optimize cashflow by enabling partners to bill their customers before they get billed themselves. There are also options that reduce any risks or exposure, including options to return capacity after 12 months.

For partners that want to offer Storage on Demand to meet businesses’ interest in flexible storage capabilities Fujitsu provides an IT infrastructure offering based on its ETERNUS portfolio. This enables capacity and services to adapt to changing requirements while ensuring only the latest technologies are being used. It also offers clear cost planning without the need for capital investment.

Fujitsu’s SELECT Partner Program is constantly adapting to meet channel partners’ changing requirements. The Channel Financial playbook is available to SELECT Partner Program members.