What the hell is this place?
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@rustcohle said in What the hell is this place?:
What's the sales pitch now a days? What's the thing people are searching for, how do they even know to search for anything other than a massive cloud app they can deploy and control themselves?
What was it ever? No one knows how to get the IT message out there in the SMB market. How do they know? They know by being trained as managers or hiring people with knowledge. If a company doesn't know the basics of business, they aren't going to find good business support. Sad but true, SMB IT has always had this challenge.
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@rustcohle said in What the hell is this place?:
@scottalanmiller what's your unit of sales look like? All labor? Retainers and project based quotes? MRR?
Does the customer buy all the hardware from CDW and the like?
Yes and yes. All labor, but it comes in lots of forms (hourly blocks, retainers, flat rates.) And yes, we generally manage the sales relationships so that the customer doesn't get screwed by them, we work with whomever makes sense for the customer at the time. Could be their existing VAR, could be Amazon, could be someone new that they bring in, could be someone that we help them to select.
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@rustcohle said in What the hell is this place?:
@scottalanmiller what are you using? O365? Other?
Are you writing code, developing solutions? Or for time infrastructure management?
Using internally for ourselves? O365
We used to write code and develop solutions. We still would, but it rarely comes up. Bespoke software has little place in the SMB world, no SMB can afford it and almost none need it.
Yes, infrastructure is mostly what we do. All IT work these days.
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@rustcohle said in What the hell is this place?:
Does the customer buy all the hardware from CDW and the like?
Remember that in the SMB, the hardware purchases are approaching zero today. Obviously not zero yet, but they are dropping like crazy. A ten person shop needed a server just ten years ago. Today a ten person shop would almost never have one. So the amount of connecting people to VARs is fractional compared to what it used to be.
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@scottalanmiller that's interesting. So you wouldn't sell a service you configured like virtual desktops or hosted pbx as the service itself?
Setup, customization and management. Development?
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@rustcohle said in What the hell is this place?:
@scottalanmiller that's interesting. So you wouldn't sell a service you configured like virtual desktops or hosted pbx as the service itself?
Oh sure, we do that. But what are we selling there? Just labour packaged at a flat rate. It's still purely IT labour being sold.
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@rustcohle said in What the hell is this place?:
Setup, customization and management.
The biggest thing that IT does in any company is advice/decision making. That's where all the value is. Setting up a desktop is a near zero value job. You don't need skilled IT for that.
But deciding what kind of desktops you need (VDI, TS, Desktops, Laptops, Thin Clients, Windows, Mac, Mint) and from whom to buy them (HP, Dell, Asus, Lenovo, Amazon) and what supplier to use (CDW, a local warehouse, eBay) takes skills and knowledge and relationships.
IT that isn't doing the advice and decision making roles doesn't bring the value necessary to have margins. If you lack those pieces, you are pretty much stuck in the "drive to the bottom" staffing game. Nothing wrong with doing that stuff, but it isn't profitable. We provide all of those pieces, but the value comes from "all of those pieces".
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@scottalanmiller I tried selling consulting and fraction cio services, we made all our money 10 years ago selling something we called joint venture. It was a lease with services and hardware that covered everything from desktops to servers to internet and phone, even if a custom iOS app was on the roadmap we financed it in. That made all the money.
I remember one client I couldn't get to buy an $8500 annual consulting block and I was going to help them purchase setup and support everything. Switching to the joint venture approach I made $30k/year of them.
But there were servers, the old margin=mystery. I sold that company in 2009, moved to Florida with my family and came back and wasted more than half of it on my own cloud start up. Then from 2014 to now I've sorta been in limbo. As the $$$ is closing to running out in asking myself whether I become an employee somewhere or whether I go back into consulting full time.
Also asking myself why i blew off financial planning for a pipe dream lol
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Think about an internal IT department. If the IT department only fixes broken desktops or plugs in mice for people, the pay will be low and the value to the company will be low. They could have a secretary do that in her spare time, no need for a trained IT pro.
But that IT department would also be a disaster for the company as no knowledgeable person would be there deciding what was needed, what was cost effective, what was secure and so forth. Any good internal IT department's focus is on decision making and planning - and then additional second tier value on triage and disaster management, and a tertiary value on day to day operations.
But all of those tiers are interdependent.
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I think corporate IT is where the bulk of the money is. It's very hard to make money of any scale in the MSP game and it is becoming more and more competitive. MSPs are a dime a dozen, but they are all VARs in disguise so doing that is tough, because you throw in into the endless sea of "more of the same."
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One thing about a VAR is that you don't need anyone really technical to work at a VAR. You just need schmoozy sales guys. The value is all in the sale, not in the tech. It if was, they'd be paying for the tech. So VARs do when when they don't do much IT. VARs focus on minimizing IT costs.
