Managed services are rapidly displacing traditional resale as the way partners profit in the channel. End users want to automate or outsource more of their non-core functions so they can direct precious internal resources to focus on the parts of their businesses that generate the most value. This, coupled with increasing software dominance and the Opex-over-Capex approach to funding digital transformation initiatives, is the key driver behind this change.
This reality opens up an abundance of revenue growth opportunities for channel partners. As an example, operating a managed service model provides invaluable telematics data which partners can leverage, not just to provide higher quality service to existing customers, but to gain valuable customer and usage insights which can be used to develop new revenue opportunities in other parts of the market.
It’s important to recognise, however, that transitioning from a traditional reseller to a managed service provider is not like flicking a switch. It’s a significant decision which, over time, will require the business to rethink its approach and realign its structure, financing, procurement, compensation, vendor partnerships and transaction and billing capabilities to reflect the new model.