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Now is the time for traditional partners to change
Cisco warns those resisting a move to services and software-led business that the coronavirus pandemic could hit them hard
Over the last few months, customers have had to change rapidly to deal with the coronavirus in order to survive, and this has also been a time when resellers who are holding out against shifting to managed services should have been forced to reconsider their strategy.
The speed of change during the pandemic has been dramatic, with some industry observers estimating that two years of digital transformation progress has been performed overnight for some customers.
But the need for a more digital approach has not been isolated at just a user level, and the period since March has been a wake-up call to those in the channel that rely on a traditional break-fix, hardware-driven business.
Cisco channel executives, wrapping up the vendor’s Live event at a partner session, agreed that change must come.
“There were definitely customers that were caught flat-footed during the crisis,” said Julia Chen, vp partner transformation, global partner organisation at Cisco. “If you did not have a strong digital backbone at this time, then you suffered a lot.
She said firms had already gone out of business during the crisis because they could not continue trading.
“The partners that cater to the customers that survive are the partners that will survive,” added Chen. “If you don’t transform at this time, I think that your customer base will be dwindling as well.”
Oliver Tuszik, svp global partner organisation at Cisco, said the company had been encouraging partners to focus on software and services solutions, supported by its channel partner programme.
“Overall, it’s very clear the partners that invested early in the transformation are seeing the benefit right now,” he said. “If you are capable to deliver more as a service, managed service and software-driven solutions, you are in a good spot.”
Tuszik added: “If you are in one of those regions that are heavily hit [by Covid-19], if you’re still focused on a pure hardware business and if you have got a bad P&L, then you are in real problems.”
He said the channel was already operating in the “new normal” and the key was to help customers prepare for when the recovery kicks in with greater force.
“Those customers that still believe they don’t need to work on digitising their entire business model, they have finally found out that if they don’t do it now, they will not survive this new normal,” he added.
Research this week from Datto and IT Glue indicated that although MSPs were scaling back their growth expectations for this year, there was still growth in the market.
“While economic uncertainty is troubling for MSPs, it’s still a good time to be in the industry,” said Rob Rae, senior vice-president of business development at Datto. “Nearly 40% of MSPs reported annual revenue of $2.5m, demonstrating health and opportunity in the market. MSPs remain the cornerstone of our economy as they serve small businesses through the pandemic and beyond.”