Navigating the Future of Vendor Management in IT - ATMSP EVO001

[00:00:00] Thank you for tuning in to this first episode of All Things MSP Evolutions.

[00:00:11] We here at All Things MSP really want to help the common MSP look into the future with this

[00:00:16] podcast and see what they can do to meet the needs and the demands of their clients

[00:00:20] in the future as well as better react or better yet be proactive about how they're going

[00:00:26] to step into the next several months and the next several years of their business.

[00:00:31] So that's what All Things MSP Evolutions is about and this first episode is really exciting

[00:00:36] because it talks about something that we don't normally think of as a future thing.

[00:00:41] And I really think it should be.

[00:00:43] The topic to shore is vendor management.

[00:00:45] And my guests today are Eric with a K, Simpson and Rich Freeman from Channel Mastered

[00:00:50] who have their own podcast MSP Chat.

[00:00:53] Stay tuned after the show for my thoughts and insights into the conversation as well as a

[00:00:58] resource for you to get started managing your vendors instead of them managing you.

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[00:01:35] Hey there all things MSP crew.

[00:01:36] This is the very first episode of the new All Things MSP deep dive podcast called

[00:01:43] ATMSP Evolutions.

[00:01:46] And today we're going to be talking about something that has kind of evolved into

[00:01:52] this thing that every MSP I think needs to be aware of and start doing as part of their

[00:01:59] best practices in their business.

[00:02:01] And that is vendor management.

[00:02:03] Once upon a time, you know, you could get away with just signing up with a new vendor

[00:02:07] and that'd be okay.

[00:02:10] Cyber security, you know, supply chain attacks, all kinds of things have started to rear

[00:02:17] their ugly heads in terms of vendors and they're things that we need to be paying attention

[00:02:23] to.

[00:02:24] So, of course with me today I have Rich Freeman and Eric Simpson from Channel Mastered

[00:02:30] who are obviously you know well known in this space don't need a lot of introduction

[00:02:36] but I'm going to go ahead and let them introduce themselves anyway.

[00:02:39] Well, thank you so much Eric.

[00:02:41] I actually, I think you may have mentioned this earlier on but I've forgotten that this

[00:02:47] is your inaugural episode of All Things MSP Evolution.

[00:02:51] So we are actually very excited we were looking forward to this conversation anyway.

[00:02:55] We're super excited to be on the very first episode of the show and super excited to

[00:03:01] share that with our audience as well.

[00:03:03] So Eric and I as he said are two of the founders of Channel Mastered.

[00:03:08] This is a consultancy that works with vendors that have or would like to have or would like

[00:03:12] to improve MSP partner programs.

[00:03:17] Eric and I are also the co-hosts of our own podcast as well and we are simulcasting

[00:03:22] this conversation on that podcast too.

[00:03:26] It's called MSP Chat and folks in your audience Eric will find that wherever it is they

[00:03:32] get audio podcasts, they'll find it on YouTube etc.

[00:03:37] So specifically me I'm the Chief Content Officer and Channel Analyst at Channel Mastered.

[00:03:44] Eric with a K over to you.

[00:03:48] Yeah so I'm recovering MSP as many of us are nowadays built and sold one of the first

[00:03:57] MSPs in the industry and then founded MSP University and have been working with MSPs

[00:04:03] ever since that day.

[00:04:06] So I'm not going to age myself and tell you guys how long ago it was but those that know

[00:04:11] know.

[00:04:12] Today I love working with MSPs, I love working with vendors, I love working with entrepreneurs

[00:04:16] and just making a better ecosystem and community that we all participate in and grow together.

[00:04:23] So thanks again Eric for having us on.

[00:04:25] This is exciting.

[00:04:27] Congratulations on launching the new podcast.

[00:04:30] Thank you and thanks for doing this kind of joint collaboration where we're posting

[00:04:34] it on all things MSP Evolutions but we're also posting it on MSP Chat so super excited for

[00:04:41] that as well.

[00:04:43] And you know we kind of mentioned vendors this is kind of more obviously geared towards

[00:04:48] the MSP audience but we all know that we have some vendors who watch these shows as

[00:04:52] well and so vendors you should probably kind of listen up to this one because although

[00:04:58] we're giving it as a blueprint for MSPs it should also be the model by which you are trying

[00:05:05] to create the right partnership program for your MSP partners.

[00:05:10] So I've got some questions and I know you guys have some questions too, we're going

[00:05:14] to just kind of go back and forth on this in a way but I want to gear it towards kind

[00:05:22] of the how does this affect the new MSP?

[00:05:27] How does it affect what existing MSPs are doing in 2024?

[00:05:31] What's changing because AT-MSP Evolutions is about the future and I think this is something

[00:05:40] that's very relevant for the future because it is something that's changing.

[00:05:45] So in your mind and I'll start with Eric, in your mind what kind of is the definition

[00:05:52] of scope of vendor management to you?

[00:05:57] Oh boy.

[00:05:58] Well you know I look at it from two perspectives right because and this is something that every

[00:06:04] MSP looks at as well.

[00:06:07] It's managing our own vendor relationships but on top of that it's managing our client's

[00:06:12] vendor relationships right and sometimes there's crossover, sometimes the client's

[00:06:18] vendor relationships are the vendor relationships that we introduce to our clients and sometimes

[00:06:24] the client's vendor relationships are things that come with a new client right and so our

[00:06:29] job as MSPs in managing these vendor relationships I think can be boiled down into a couple of

[00:06:36] I think simple ideas which means we need to have the best relationship with our vendors

[00:06:45] whether they are our vendors or sharing our vendors with our clients or managing their

[00:06:49] vendors so that we have influence and leverage on delivering the best service and outcome

[00:06:58] for our clients.

[00:06:59] Now as MSPs Eric you well know that when we consider engaging with a vendor to power

[00:07:06] our services or to help us grow our businesses we're typically evaluating them from a couple

[00:07:13] of different perspectives.

[00:07:14] First one is we'll be bringing this vendor on be good for my clients right.

[00:07:20] Is it a product service or solution that I'm adding into my stack that today's MSPs have

[00:07:27] had to adapt and adjust to as you kind of you know introduced in your intros like we

[00:07:31] are post pandemic now.

[00:07:33] Today's buyers are buying different things than what they used to buy so we're

[00:07:38] focused now on you know cyber security, cloud and SaaS application management, hybrid workforce

[00:07:49] support right so cyber security being you know the through line through all of this.

[00:07:55] So is this product service or solution good for my clients?

[00:08:01] Is it good for my team or am I just adding vendor sprawl right that's a common challenge

[00:08:07] that MSPs are looking at now and how do I address that additional cost and make sure

[00:08:14] that I'm profiting from it with my clients.

[00:08:17] Not that we're you know kind of we just want to make sure that we're meeting our

[00:08:21] minimum target margins.

[00:08:23] And then thirdly how easy is it for me to integrate into my processes and platforms

[00:08:30] bill for it and sell it and manage it right so I think from the perspective of what

[00:08:35] does an MSP look like from a vendor management perspective you know Rich you've got

[00:08:40] stats on this how many you know vendor relationships a typical MSP has so I'm

[00:08:45] going to kick that over to you to chime in here but it's a lot it's certainly a

[00:08:49] lot more than when I had my MSP practice and sold it many years ago right.

[00:08:54] So there has to be a give and a get that's a partnership between us and our

[00:08:59] vendors and we have to work together in unison to grow each of our respective

[00:09:05] organizations every one of us has different needs and you know Rich and I do a

[00:09:10] do a session at many events where we talk about you know the difference between

[00:09:14] vendors and MSPs one being from Mars one being from Venus and how what we look

[00:09:19] for in good collaboration in order to go to market together and succeed and

[00:09:24] thrive.

[00:09:25] So I'm going to stop there and kick it over to Rich.

[00:09:29] Yeah and I don't have unfortunately I don't have the specific statistic you are

[00:09:33] alluding to there Eric at my fingertips but I can say that based on multiple

[00:09:37] research studies I've seen just within the last month or two that by and large

[00:09:42] MSPs are consolidating their vendor relationships so we'll probably get

[00:09:46] into consolidation at some point in this conversation but they have a lot

[00:09:50] of vendor relationships to juggle and partially as a result they're

[00:09:55] actually looking to reduce those numbers right now.

[00:09:58] The other thing I want to kind of want to follow up on a little bit actually

[00:10:04] things both Eric's on this podcast have talked about because Eric without

[00:10:08] a K you were saying that the vendor management issue is even more

[00:10:12] relevant than it normally is right now and I would totally agree in part

[00:10:17] because the population of vendors out there continues to grow and grow

[00:10:23] and specifically the population of vendors who want to do business with

[00:10:26] MSPs so you're going to have more and more companies coming after you trying

[00:10:32] to win over your business.

[00:10:34] You're going to wind up having a lot of vendors to evaluate and some

[00:10:39] decisions to make about how many relationships that you want to have

[00:10:43] and then the other thing Eric with a K you were kind of talking

[00:10:45] about vendor management as an opportunity to influence vendors and I

[00:10:51] think precisely because there are so many newcomers to the MSP channel

[00:10:55] right now that's especially important to the degree that you are partnering

[00:10:59] with a vendor who's relatively new to MSPs.

[00:11:03] You really want to kind of take advantage of that opportunity to kind

[00:11:06] of show them the ropes a little bit help them understand what's

[00:11:10] important to you so that they can learn rapidly and accommodate

[00:11:16] those wishes.

[00:11:18] Yeah and you mentioned something Eric you talked about how you're not

[00:11:25] just dealing with your own vendors you're dealing with your clients

[00:11:27] vendors as well and that's what we call ecosystem now.

[00:11:33] It used to be there was a channel it went from our vendor

[00:11:37] through us to our client and it's not that way anymore.

[00:11:41] It's much more of a network of vendors clients and providers

[00:11:45] and so it's a very different world in that aspect as well.

[00:11:49] Any comments on the ecosystem versus traditional channel piece?

[00:11:55] Yeah I think that what we're seeing at Channel Mashin and what a lot

[00:12:01] of analysts are sharing is that we are moving toward more

[00:12:04] of an ecosystem future and this is a scenario where Eric

[00:12:10] these clients that are coming to us are basically transacting

[00:12:15] more directly for some of these applications or for some of

[00:12:19] these services and to have a seat at the table to be welcomed

[00:12:26] in as a strategic value add to maybe an ecosystem of other

[00:12:33] vendors which may not be delivering technology or

[00:12:38] cybersecurity services but Jay McVane will tell us these folks

[00:12:42] include attorneys and accountants and these trusted advisors

[00:12:47] that now these business owners see as their core team of advisors

[00:12:54] moving forward. So I think from that perspective Eric

[00:12:58] it's important for today's MSPs to become more mature

[00:13:06] in a more strategic focus to add that value

[00:13:10] or else risk being replaced by a competitor that can be perceived as

[00:13:15] adding more strategic value and having a seat at the table and being one of these

[00:13:19] core strategic advisors that our clients are now seeking to build

[00:13:26] in their growth strategy moving forward or grow with in this strategy

[00:13:30] moving forward and understand who they are and work together to deliver

[00:13:34] these services and I think if we're successful at doing that

[00:13:39] then that just means that we're going to continue to grow the longevity of those

[00:13:43] client relationships and become more deeply valuable and identify

[00:13:49] more opportunities to introduce the services and solutions that clients need

[00:13:56] and will not be seen as a cost center but be more trusting to say yes to some of these

[00:14:02] things because we're having those conversations from a more business outcome perspective

[00:14:07] rather than a technology solution outcome perspective.

[00:14:10] Right and it's that technology solution aspect and that influencer you use the word influencer

[00:14:17] in your earlier answer that really makes a difference and segments it out from the

[00:14:23] traditional channel because ecosystem you're right it's more about influence

[00:14:29] and it's not just delivering IT services anymore right

[00:14:33] it's almost and I almost I hate to use this term because some people are probably going to

[00:14:38] take it wrong but a virtual CTO you know somebody who's actually managing the technology

[00:14:46] and how it's being used rather than just the bits and bytes.

[00:14:51] Yeah and I would offer that you know we see and hear this term bandied about a lot

[00:14:58] virtual CTO and I think that there's a misconception of what that role really is or should be

[00:15:08] among a lot of MSPs Eric and Rich I think you know they see this as oh well it's table stakes

[00:15:14] for me to have that as kind of one of the bullet points in my deliverable but really to

[00:15:18] understand what that means I mean I've been a CTO in the enterprise and a CIO on the enterprise

[00:15:24] I understand that that role is much different than what many MSPs think it is and and fail to

[00:15:33] deliver on the promise to their clients and so when you're thinking about becoming that strategic

[00:15:40] advisor that influencer you take virtual out of it you are now the CTO for that organization

[00:15:46] it's just like when people say oh we're outsourcing our help desk or when you bring in as an

[00:15:51] MSP an outsource third party to help you you know take care of the noise level one level

[00:15:56] two or maybe higher level escalation and the technicians you know start blaming mistakes on

[00:16:02] that outsource help desk when in fact they should be saying hey this is our help desk

[00:16:07] you know they're part of our team we're delivering that to our clients so just like

[00:16:11] you know own the responsibility of what a CTO does and deliver it fractionally but don't

[00:16:18] call it virtual don't call it fractional this is kind of an embedded advisory role that you have

[00:16:25] and when you start thinking about it that way it changes the perception of what you feel is necessary

[00:16:31] and then it allows you then to say well let me change my pricing model to accommodate that because

[00:16:36] it's not some virtual thing that I'm adding on call me when you need me I'm going to have QBRs

[00:16:40] this is no I am directing the technology decisions and having some budget ownership

[00:16:48] in my clients relationships it's a completely different perspective in my mind yeah and now

[00:16:52] Rich you had a comment yeah well I mean there are a number of really interesting things that I

[00:16:57] want to quickly follow up on and so first of all to um to uh tag in on what Eric was talking about

[00:17:03] there um you really want to have that CTO that technology advisor role in your customer accounts

[00:17:12] right now for a couple of different reasons one of which being this is what customers are looking for

[00:17:17] right now increasingly they they they and they indicate this in all sorts of different ways

[00:17:22] research studies etc they want um you know and uh cliche alert but they do want digital

[00:17:28] transformation they want solutions and not products they're looking for somebody to guide them

[00:17:34] on the best ways to apply technology for their business um so you want to be the person who's

[00:17:39] meeting um that demand um at the same time a lot of the stuff that MSPs have historically done

[00:17:45] network management device management etc less and less strategic more and more commodified

[00:17:52] less and less profitable so two good reasons there basically to to be that CTO CIO um uh to your

[00:17:59] clients um and then the other thing I'll point out just on the in the general area of ecosystem

[00:18:06] versus those traditional channel relationships you were talking about Eric is it it kind of changes

[00:18:12] the dynamics between MSPs and the vendors that they partner with so once upon a time you know

[00:18:19] you might not even have um considered uh working with a vendor who sells directs for example but

[00:18:26] there are a lot of great partner MSP opportunities out there these days in the ecosystem era with

[00:18:34] companies um that do sell um direct sometimes and in fact sometimes the best thing you can do as an

[00:18:40] MSP is let the end user handle the procurement and you know go ahead and buy direct they're

[00:18:48] going to buy the software through some SaaS vendor and not know what to do with it and that's when you

[00:18:53] step in um with the strategic advice and the uh monitoring and the maintenance and management

[00:18:59] and so on that's going to make you um sticky with that client so the evaluation criteria um

[00:19:05] for vendors in the ecosystem era I think is a little bit different yes absolutely I agree with

[00:19:10] that and the way I envision the role of CTO and by the way Eric I love the fact that

[00:19:16] you know drop the V drop the virtual the lawyer for the small business doesn't call them

[00:19:23] their virtual lawyer they're just their lawyer so yes I think it's very appropriate to just call

[00:19:28] yourself the CTO uh for a small to medium-sized business and that role is not just reselling

[00:19:38] services or reselling products from a vendor it's exactly what Rich described it's not just

[00:19:45] about selling services or you know selling a product through a vendor you're actually going

[00:19:52] and providing it's it's a higher level than that so whether they're buying it from you or

[00:19:59] whether they're buying it direct you are still the one involved in the decision I think this

[00:20:04] is something that is just kind of a little bit of a difference but it's very important

[00:20:09] in terms of it's consulting is what we've kind of traditionally called it but it's also

[00:20:19] you're involved at a level that we've never been involved before as traditional MSPs

[00:20:25] and what I mean by that I guess is that you are not just taking something that they're telling

[00:20:33] you they want to buy and configuring it installing it and whatnot you're actually part of the process

[00:20:41] of deciding which product is the best one for their business and that's where it becomes

[00:20:48] a little bit trickier because in the past a lot of MSPs haven't done that they've relied on the

[00:20:55] customer to say this is the solution we want rather than the MSP going in as the CTO

[00:21:02] and determining what the best product to solve that problem is I think that's the highest value

[00:21:10] that we can deliver to a client is again owning that role and saying you know the definition of

[00:21:18] a CTO is I'm going to guide the technology strategy for this organization and I'm going to

[00:21:24] evaluate everything that's going on with every user every platform every service it sounds daunting

[00:21:33] but you eat the elephant one bite at a time you prioritize what's going on in the environment

[00:21:39] you know I was just on a coaching call with an MSP yesterday and you know guiding them

[00:21:45] on delivering this role as the CTO and I said let's survey the users don't survey the business

[00:21:53] owner let's survey the users on their workflow on their challenges you know maybe the business

[00:22:00] owner doesn't know that it takes the AP you know AR department you know days or weeks to get

[00:22:07] accounts receivable and invoicing out just like MSPs are very familiar with that right

[00:22:11] maybe it takes them you know 75 mouse clicks to cut an invoice or to pay you know payroll or

[00:22:16] whatever that is you know users over time they feel like okay this is just how it's done and

[00:22:23] that's what I have to do and maybe they've raised concerns but you know the business owner is busy

[00:22:29] with other things and may not take immediate action but when we analyze and survey and say oh my

[00:22:36] goodness we should upgrade to this new version of the platform or maybe we should look at

[00:22:40] different platforms or changing some process to make it more efficient for that for that valued

[00:22:47] staff member who is the most valuable resource in that organization to do what they were hired to do

[00:22:53] and not lose a lot of time you know just you know dealing with things that aren't efficient so

[00:22:59] things like that doing you know a survey of different business units and owning that

[00:23:05] and then prioritizing it in our three or five year technology roadmap plan that we are directing now

[00:23:12] you may have someone else in the organization that is doing the QBRs but you know the CTO

[00:23:18] is involved in that and you know takes that feedback or injects feedback into guide that

[00:23:24] and not only to sell more stuff right Eric and Rich but to make sure that that business owner

[00:23:32] and that organization is getting the most out of the technology and services they're already investing

[00:23:38] in yeah you know um you're reminding me and so I mean surveying the end users um I think it's a

[00:23:45] really smart way to approach this but I know MSPs who particularly at a new account will you know

[00:23:50] just go on site um with the customer assuming folks you know there's an office there to go on

[00:23:56] site too wander around and talk to the employees because you're going to learn about needs and issues

[00:24:02] and pain points that the the business owner the CEO might not know about might not have

[00:24:08] top of mind and that's going to give you an opportunity to bring ideas to the the CEO

[00:24:14] that they don't know to ask you about you know I I'm remembering a story I was told years ago

[00:24:18] by the then CEO of Bit Titan and um there was an attorney from their outsourced legal firm

[00:24:28] who came on site at at Bit Titan headquarters to spend two days there and and you know do exactly

[00:24:33] what I'm talking about wander around talk to people um and this guy got a meeting with the

[00:24:38] CEO and asked him at one point you know what what more can we do for you to be a great legal

[00:24:44] partner for you and the CEO's answer basically was tell me the thing that you can do that I don't know

[00:24:51] to ask you for because I'm not a lawyer right and that's what the MSP clients out there want from

[00:24:58] you as well they absolutely want you to help them with the problems they know they have um

[00:25:03] but they want you to identify problems maybe that they didn't know they have and show them how to

[00:25:08] fix this yeah rich that is a great that's a great guidance and I recommend that MSPs

[00:25:14] do that and survey the users during onboarding like do a survey first get everybody's pain and

[00:25:22] challenges out and then you can have follow-up maybe a little focus group maybe a little

[00:25:26] different meetings speak to individuals right and and bring that information that that business

[00:25:32] owner may not even be aware of uh into the conversation as you know you know we want to

[00:25:37] address the the immediate pain you know buyers want to address an immediate pain I have this

[00:25:41] challenge I need this fixed but then there are all these other latent needs that also need to be

[00:25:46] addressed and they're always looking at okay what's the next thing what's the next thing well let's

[00:25:50] look at this thing as a whole and maybe we can put together an approach that addresses a lot of

[00:25:55] things in one fell swoop and then you know you're looking for early wins in those brand new

[00:26:01] relationships right and the users and the business owners by now they've had MSPs already

[00:26:07] right you're in there replacing somebody else you know odds are and so you need to make a

[00:26:13] quick bunch of wins and make a quick difference to elevate the uh you know the perception of value

[00:26:21] to confirm that buyer's decision to engage with you that business owner and to let the

[00:26:26] users know wow this is refreshing and different I like this new CTO and their company right and

[00:26:33] that's a great way to kick off a new client relationship and it's an excellent way to differentiate

[00:26:39] yourself as well um there's another thing that we brought up early on and that was sprawl the

[00:26:45] number of uh new vendors that are in our space now and kind of a lot of small vendors as well

[00:26:52] so there's a lot of this you know these vendors are doing a very uh consistent job of trying to get

[00:27:02] into the pockets of MSPs and maybe they have a great tool maybe they have a tool that the client

[00:27:08] needs or the MSP needs but with so many of them out there so many of them banging on the door

[00:27:15] there was a post I forget where it was I think it was probably on Facebook or LinkedIn today

[00:27:19] where somebody was calling an MSP at 5 30 in the morning to try and get their business obviously

[00:27:26] that didn't go over very well so you know vendors that are listening to the call please don't do that

[00:27:32] it will ruin your chances but how does the average MSP now go about filtering through

[00:27:41] this just massive field of new vendors that continue to come knocking

[00:27:50] you know I was actually going to raise this question um and and maybe get your take on it

[00:27:56] Eric because it's an interesting one and it's kind of on my mind as well I mean you know

[00:28:00] traditionally if you're out looking um evaluating vendors um the table stakes requirement is you

[00:28:09] know do they integrate with my PSA do they have a multi-tenant interface and there are all

[00:28:13] these young newcomers um to the industry right now that don't necessarily have that yet but

[00:28:19] are maybe headed towards that and so it raises the question can you just filter them out until

[00:28:24] they do have it because it's really just not acceptable it's not going to be practical or

[00:28:31] profitable to work with them until they do or where do you set the bar where I can cyber

[00:28:37] security for example there's something so new and different and exciting about this

[00:28:42] this capability here that I have to at least consider doing business with them even though

[00:28:47] they have that they don't have that maturity that the more established um vendors have I think it's a

[00:28:52] harder question to answer now than it used to be oh I think it absolutely is uh Eric go ahead

[00:29:00] I'm sorry yeah it's very challenging um you know there's so much so much more to filter through

[00:29:07] now you know you know in the olden days right things were simpler um you kind of everybody

[00:29:13] used the same stuff uh and the differentiator was how you you know the relationship with your

[00:29:18] client and and and that kind of thing and today there there is so much interest and attention

[00:29:24] focused on the MSP panel because vendors know that kind of that's the golden goose I mean

[00:29:32] these are the these are the advisors that you know can allow or deny their entry into their

[00:29:40] you know into their end users environments like we have that that influence and so more and more

[00:29:48] vendors are seeing that like we know at a channel match we work a lot of you know pre-launch vendors

[00:29:53] that are you know just getting funding and things like that and are looking for market

[00:29:57] assessment product market and all this and we have these conversations with them how do you

[00:30:01] distinguish and differentiate yourself from who the MSP thinks you compete with and you know other

[00:30:09] than the table stakes that we've already talked about like the you know the the business necessities

[00:30:15] for an MSP to even consider you where do MSPs go to get objective feedback and today there are

[00:30:24] lots of communities there's social media now you got to be careful right out there because

[00:30:29] it's it's it's tricky you know there are some platforms that are a little bit you know you

[00:30:33] got to take it with a grain of salt but who do you engage with who are your who are your

[00:30:38] who are your posse that you get your information from there are tons of great podcasts like

[00:30:43] Eros Eric like ours there are lots of communities out there there are peer groups you know there

[00:30:49] are there are lots of ways that you can get feedback but you've still got to filter it out

[00:30:55] and you have to have a mindset I think as an MSP that says I'm going to reevaluate my entire solution

[00:31:03] stack on a regular basis not just one thing or the other thing you know I do a lot of work with

[00:31:09] MSPs that want to you know bundle in price and add like hey I need enhanced cybersecurity stack

[00:31:15] now so I can sell it to my clients and what they fail to realize is they're dragging along

[00:31:20] maybe some legacy stuff that doesn't meet today's needs from a cybersecurity perspective or something

[00:31:27] else because they've been using it forever and they just say no we've got that covered no I say look

[00:31:32] evaluate your entire stack buyers are different now than they were before the threat and the

[00:31:38] risk is much different but the opportunity is so much greater leading with cybersecurity and I

[00:31:44] say look evaluate and do this on a regular basis maybe a yearly basis look at everything

[00:31:52] and look at what's in your stack and look at the rising cost of these services and solutions

[00:31:57] and make sure that you're truing up your clients don't ask you know permission first to raise your

[00:32:03] rates ask forgiveness afterwards hey we've kept our pricing low we've added these new services

[00:32:08] solutions you'll see this reflected on your next invoice and deal with the small low single-digit

[00:32:14] percent of clients that complain you know one at a time and don't give them a pass just maybe

[00:32:21] negotiate their price increase a little bit different give them a little something to keep

[00:32:24] them on board or if they're C customers then you need to make room to take on more A clients

[00:32:30] because they're costing you money then put yourself in a position to do that but you've

[00:32:34] got to be profitable you've got to be efficient and effective and you've got to do what you're

[00:32:40] delivering your promise to your clients or your own company to evaluate what's going on in the

[00:32:45] infrastructure and make different technology and vendor decisions to help you and by extension

[00:32:51] your clients and I'm gonna quickly add one last little piece because you were talking

[00:32:57] Eric there for a little bit about the wisdom of um rethinking your stack on a regular basis

[00:33:04] which I think is really smart and important advice um and to tie into a theme that's come

[00:33:08] up a number of different times here precisely because you have more and more vendors competing for

[00:33:14] MSPs out there you have more leverage in that conversation than you did before so you can go

[00:33:21] to your vendors and say look it's it's my semi-annual um rethink on the stack um here's

[00:33:27] what I love about what you're doing for me and here's where I'm not so happy and I'm

[00:33:31] looking around what can we work out here um you know you you don't necessarily own the outcome of

[00:33:38] that conversation but you've got moral leverage than you did before particularly if you are one of those

[00:33:45] you know high performance profitable kind of MSPs Eric's talking about if you're doing a good

[00:33:50] job they want you and that gives you some some room to be a little bit more demanding

[00:33:56] in your conversations with vendors and the flip side of that real quick the flip side of that Rich is

[00:34:03] the competitors that you're talking to the vendors they know that you're working with

[00:34:08] that particular vendor and it they will they will sweeten the deal to lure you away I mean how

[00:34:14] many times have we heard that when you've got a ton of endpoints you're managing boy oh boy it

[00:34:19] gets pretty interesting in those conversations go ahead Eric well I was just going to say

[00:34:24] that in terms of the competition and the leverage Rich that you just talked about

[00:34:30] that is 100 true it used to be that MSPs had no leverage with their vendors

[00:34:38] you know back Eric when you and I were were MSPs we kind of took what we had to take because

[00:34:44] you know first of all there wasn't a lot of choices out there number one but number two

[00:34:49] the traditional channel model flows one way and that's another difference with ecosystem is ecosystem

[00:34:56] because it's interconnected the influence flows both ways and so I think it's absolutely correct

[00:35:02] that if MSPs are not pushing back on their vendors today they they need to be they need to be

[00:35:10] and then Rich you were saying something about what was it trying to remember oh the the risk

[00:35:18] profile of a vendor what do you do when you're looking at a vendor you like what they have

[00:35:27] but they can't really put a finger on how much risk they're going to be to you by providing the

[00:35:33] right certifications and best practices and stuff like that yeah it's it's really really hard

[00:35:42] you know and I once upon a time and I should probably say I didn't mention this before but

[00:35:46] in addition to being part of the team at Channel Mastered I'm a journalist who has covered the

[00:35:50] channel for many many years I was the founding editor former editor-in-chief at Channel Pro I've

[00:35:54] got a blog called Channel Holic these days that you can find at ChannelHolic.News once upon a time

[00:36:00] I remember writing an article I had a conversation with a venture one of the managing partners

[00:36:06] at a venture capital company because I wanted to kind of understand how his mind works how

[00:36:11] a VC firm's mind works when they're evaluating vendors it's a similar kind of challenge and

[00:36:18] you know one of the key variables that they're looking at is that risk element they're you

[00:36:23] know obviously looking at the strength of the technology and how much as this guy put at white

[00:36:28] space there is in the market is this something new there's a lot of upside growth potential

[00:36:33] or are they entering some sort of mature market and it's going to be a fight to get in there

[00:36:38] but once they've convinced themselves there's there's something there

[00:36:42] they're looking at things like well who who's behind this company who founded this company what

[00:36:48] have they done before what do I know about them because it really is a it's a giant problem

[00:36:54] basically if you place a big bet on a company you know on behalf of your business and your

[00:37:01] clients businesses and they they go under their security practices don't you know stand up the

[00:37:09] test of time and so on so I think there are areas in a traditional MSP vendor relationship where

[00:37:16] you know you're going to need to be a little bit more flexible than you were before in terms of

[00:37:20] things like are they are are they not channel only for example are they you know how many

[00:37:25] PSN in PSA integrations do they have some of the stuff that we've talked about before

[00:37:30] but I do think there are some bedrock things you really have to kind of satisfy yourself about before

[00:37:35] you um force that relationship and I think that that financial risk that security risk that

[00:37:40] relationship risk is is pretty high up on that list yeah and we've kind of offered them some

[00:37:47] practical advice already right we we've told them that they should be re-evaluating their

[00:37:51] stack from time to time I would say at least once a year if not twice and you have to start there

[00:38:00] because you have to start from where your needs are and where your clients needs are before you

[00:38:05] start going looking at vendors now I think it's fun to go to a trade show for instance

[00:38:10] and see what's new and something might catch right you might see something new that catches

[00:38:16] on and you say well that's something that I can add to my stack that I can I can sell or I can

[00:38:22] create an efficiency with that's going to drive to my my bottom line but other than that a lot of

[00:38:30] times it can be a distraction especially with as hard as those vendors are working to get your

[00:38:36] attention so in terms of practicals make sure that you know you're doing the evaluations

[00:38:43] but you're not letting everybody kind of pitch to you all the time and then also you know obviously

[00:38:51] cybersecurity credentials are important and a lot of this comes down to what I'd like to probably

[00:38:58] encourage MSPs to do and that is to create an actual vendor management policy within your

[00:39:04] organization that spells these things out um Eric what what do you think about an MSP creating

[00:39:11] a vendor management policy I think it's it's part of your R&D process right so the more mature MSPs

[00:39:20] you know we did this in my MSP it's like we we established an R&D policy and it covered

[00:39:26] different things different areas specifically around vendors and solutions and services so

[00:39:32] you know when is it that we reevaluate a product service solution or a particular vendor

[00:39:39] what is it what is it that we're trying to do are we trying to replace something in our stack do we

[00:39:45] have a client that has this you know kind of outlier need that we you know decide okay if we can make

[00:39:53] this a success then we can roll that out to more clients how do we do that do they have

[00:39:58] like pilot programs so there's lots of criteria that you just apply as an overlay to a vendor

[00:40:06] evaluation just like you would do for a client that says hey I need to you know rip and replace

[00:40:12] this technology you've never worked with it before you're going to engage with a vendor and you're

[00:40:18] going to do a pilot and you're going to see how it goes you're going to you know implemented

[00:40:22] in inside your organization first as kind of a test you may you know get a client that's

[00:40:28] interested in in engaging at that and you say okay well let's deploy to you know a business

[00:40:32] unit person and see how that works so there are a lot of you know evaluation criteria that go into

[00:40:40] that so but the first step is to say yes we're going to establish a policy whereby you know all of

[00:40:46] these things fit what is the policy what you know what is the scorecard that elevates the need

[00:40:52] for one thing over another like what takes the most priority because like you were saying Eric

[00:40:57] we don't want to just look at everything all the time all at once right we have to have a process

[00:41:02] whereby there is a structure and we elevate the next thing that we're looking for and have a plan

[00:41:08] so like you said a great way to engage with a ton of vendors is at a trade show at a conference

[00:41:14] in an expo hall but have a plan for that and say look I'm looking to fit this you know this

[00:41:20] need right now so I'm going to make the most efficient use of my time maybe there's a couple

[00:41:24] that I'll talk to because there are other things on that lower priority list

[00:41:28] but I'm going to get the information and data I need by talking to them directly

[00:41:32] and understanding whether or not in my scorecard they are a contender and so you have your

[00:41:38] different things that mean that mean different things for different MSPs you may have you know

[00:41:44] different requirements or the stack ranking is a little bit differently but they're going to

[00:41:48] include some of the table stakes stuff that we already talked about then you're going to add

[00:41:52] you know the things that make you different or unique or what your clients needs are different

[00:41:55] or unique and have a process for that so the important thing is to establish a framework

[00:42:01] the process and then stick to the process don't color outside the lines I see a lot of

[00:42:07] you know technicians get excited and go oh well you know I like this other feature that they have

[00:42:12] but they don't have this feature that's required well you've got to you've got to stick to

[00:42:16] your guns if you're going to get traction in your business you've got to stay focused

[00:42:20] and you're going to make a long-term commitment I mean it takes a lot to introduce a new product

[00:42:25] or service or solution into your stack and deploy to your clients or to rip and replace

[00:42:30] something that's already out there because maybe the technology is old they're not updating it

[00:42:34] often enough the new stuff is on a way better platform it's multi-tenant right it solves a

[00:42:39] lot of issues so it's a deep conversation that I think needs consideration internally before you

[00:42:46] just start you know firing first and aiming afterwards yeah and I'll test this proposition

[00:42:52] as well on the one non-msp current or former in this conversation here right now but I would think

[00:43:01] part of the appeal the logic the benefit of having a vendor management policy it's not only

[00:43:07] is that going to increase the consistency and the effectiveness of the evaluation process

[00:43:12] you're going to be asking the same questions every time you're not going to overlook a question that

[00:43:16] you really should be thinking about when you're approaching a new vendor but also you guys the

[00:43:22] Erex you tell me um you could share that policy with vendors you're evaluating potentially here's

[00:43:30] how I evaluate the vendors I partner with take a look at this list what do you got and then

[00:43:35] they know what they need to to address with you see how effectively they can do that yeah

[00:43:43] I love having them qualify themselves to you right correct yeah yeah have them yeah so and it

[00:43:49] probably saves a lot of time the vendor can say oh yeah we can do like six of these things but not

[00:43:54] the other four thanks for your time right yep and honestly most of the time they probably have

[00:44:00] more time and more people to do that self-evaluation first rather than you having to do it and

[00:44:07] it'll save you a lot of time absolutely and you know there there are other things that

[00:44:13] come into this you know uh you know questionnaire things like you know MDF you know partner program

[00:44:19] benefits I mean all these other things that are you know you go need to have and then nice to have

[00:44:25] right so when you have two competing vendors that the need to have stuff is you know there's

[00:44:31] I could go either way but then one vendor has a few more nice to haves in there

[00:44:36] that can sway the decision exactly they'll end up higher on the scoring chart and that's

[00:44:41] what you should do you should literally score them so it's less of how you feel about it and more

[00:44:47] about the actual facts involved with what they're satisfying how risky they are and all of those

[00:44:54] other components that go into it removing the emotion from the decision yeah and you know we

[00:45:01] talked about at the very beginning of the show we talked about kind of the evolution of the MSP

[00:45:06] and the CTO role and so I think we can actually take vendor policy management one step further

[00:45:13] and that's an area because a lot of the vendors that clients have are technology-based vendors

[00:45:20] we can actually extend that vendor management policy down into the client

[00:45:24] as well as part of the CTO role yeah I think you know anything that yeah I think that anything

[00:45:31] that we spend time energy and effort into developing for ourselves is another value as to how many

[00:45:38] times and how many ways can we repurpose it and I think that's a strong strategy Eric where you're

[00:45:44] sitting down with a client when you're when you're presenting the value of the CTO service and

[00:45:49] why you should engage with us and show them the scorecard this is how we are going to

[00:45:54] evaluate every single vendor and every single solution that powers your business today

[00:45:59] it reminds me of when you know I used to sell our managed services in the early days I'd you know

[00:46:04] and this is one of my probably most downloaded free asset that I've given away over the years is 117

[00:46:10] step new client onboarding process and it was like every single thing that we did and our sales

[00:46:16] team would go out and they would use that as a sales tool say well look here's here's how

[00:46:20] we onboard our clients and they'd share this exhaustive you know checklist that the

[00:46:26] client would immediately say wow if my last provider had done that you know I wouldn't be talking

[00:46:30] to you guys right now right and it set the tone for how they would interview every succeeding

[00:46:37] competitor after that so I wanted to get in there early right and present it because the

[00:46:41] first thing they're going to ask as part of the conversation or part of one of things they

[00:46:44] would ask is tell me about your onboarding process and well we would win every time because

[00:46:50] back in the early days right not a lot of MSPs had matured to that level that we were at

[00:46:57] so it was a competitive advantage so this is the same thing show a client scorecard show them how

[00:47:02] you're going to onboard them you know and then execute on that you can't promise something and

[00:47:07] not deliver because then you're going to erode that confidence in that you know you're going

[00:47:10] to cool that relationship before it even gets a chance to get started right yep and it's a

[00:47:15] it's a perfect example of what we were talking about before bringing something to the client

[00:47:20] that they don't know to ask you for because they haven't really you know they've never seen

[00:47:24] a vendor management policy before they haven't thought at all haven't had time to think about

[00:47:28] the potential advantages of that this is how you really sort of underscore your value to the

[00:47:35] clients is by bringing on the stuff that will benefit them that it never would have occurred

[00:47:39] to them to ask you about now rich as we're kind of wrapping this up because i know we're kind of at

[00:47:47] what we decided was going to be our our kind of time limit here because you've interviewed so many

[00:47:55] vendors and MSPs over you know your career what have you seen in terms of attitudes

[00:48:04] of the vendor msp relationship that you've seen the more forward-thinking vendors and MSPs

[00:48:12] kind of gravitate to so i think the um i think the on the msp side of that equation that the most

[00:48:22] successful sort of forward-looking msp's um really do approach vendor relationships as a strategic

[00:48:31] partnership um and so um you know that so they're they're going to be a little bit more

[00:48:39] forgiving of mistakes in certain cases they're going to be a little bit more direct

[00:48:44] about their aspirations um so you know i i'm trying to kind of encapsulate it a little

[00:48:50] bit but it's it's a little bit more like less griping and more collaborative go-to-market

[00:48:56] strategizing um so understand you know make sure the the vendor understands what's important to you

[00:49:02] but try to understand a little bit about what's important to them as well um and look for those

[00:49:07] opportunities they should be doing this too this should be happening on the vendor side too but

[00:49:11] look for those opportunities to work well together i think that mindset um is very appealing

[00:49:18] to vendors um and then on the on the vendor side um i think um the the one well i mean what i have

[00:49:27] certainly noticed and this won't come as a maybe a huge shock to to um either of you um but there

[00:49:33] are a lot of vendors out there who are liked among msp's but if you look at the ones that are

[00:49:40] really really loved by you know the ones that kind of um inspire fanatical um uh fandom uh

[00:49:48] basically they're the ones who demonstrate in everything they do big things small things a

[00:49:54] genuine not a lip service but a genuine commitment to doing right by their partners

[00:50:00] and that extends um you know from the basics like support um you know and how responsive they

[00:50:07] are and how helpful they are um you know how how responsive and helpful uh are they on uh

[00:50:12] billing disputes and and uh and things like that um but just also the you know the the smaller

[00:50:18] things as well um where there's um some relationship value they're they're helping

[00:50:24] you out on the little things in a way that tells you these guys literally you know genuinely

[00:50:30] give a darn um about me and the success of my business and people people feel that msp's feel

[00:50:37] that they know the difference between a company that just has the right pieces and parts in place

[00:50:42] there and a company that has a truly kind of an embedded culture um of uh of supporting and

[00:50:50] and helping msp's grow and so on the vendor side it's the companies that have been especially

[00:50:54] good at that i'll go ahead and name two really obvious candidates um pax eight and datto come to

[00:51:00] mind just huge success stories in recent years um and there's a reason they have a lot of raving

[00:51:07] fans is they they do more than add the kind of uh traditional value that good vendors add

[00:51:14] and and people can can feel that uh feel that love and feel that commitment in a way that

[00:51:20] inspires loyalty yeah partner first philosophy yeah and eric as we look you know towards the future

[00:51:32] the evolution of msp's and the vendors that serve them what is kind of the one thing that you would

[00:51:39] tell each group in terms of what they need to be looking forward to and evolving towards as msp's

[00:51:49] and his vendors wow that's a great question eric only one thing one thing only uh reminds me of uh

[00:51:59] the hunt for red october when shan connery tells vasily one thing communicate with the american

[00:52:05] sub and he's like give me a ping vasily one ping only so anyway a little little fun there i think

[00:52:13] it's it's the the the open approach or the the the openness to having

[00:52:27] collaborative conversations that can be you know that can be direct that can be difficult

[00:52:34] at times and i think that you know the on the vendor side you know some of the vendors that

[00:52:41] that we work with um that are you know entering the market you know we advise them to create

[00:52:47] early adopter programs uh you know stand up some partner advisory councils or boards right to get

[00:52:55] the dna and the feedback and the perspective uh and the likes and gripes and dislikes of

[00:53:02] you know a constituency of that represents the channel partners that they would like to

[00:53:07] build their programs with and have a voice and not just do it because it's a checklist thing

[00:53:14] but to really you know like you were talking about rich like you know the the vendors that get it

[00:53:19] get it and they listen and they invite that that sometimes hard to hear criticism

[00:53:27] but take that feedback and have it influence product roadmap strategy things that need to be fixed

[00:53:35] and those partners become your greatest advocates you know these are the folks that create this fandom

[00:53:42] and are the tip of the spear for that and then on the msp side look for opportunities

[00:53:49] to engage with vendors that have this ability and don't just sit on the sidelines if you feel

[00:53:57] like this is boy this this vendor could be a great vendor if they just did these couple of things

[00:54:03] step up and and participate and ask to either be invited for a position or if they don't have it

[00:54:12] lobby for them create a partner advisory council listen to the partners create some focus groups do

[00:54:17] some peer group stuff we want to you know we we see the value but it takes both parties

[00:54:25] who want to do that it can't be one-sided so you know we it takes you know we're all in this

[00:54:32] channel together and I think you know we can't just ask ask ask and then get upset when we don't

[00:54:40] get what we want from a vendor or from an msp we have to collaborate together and see it for

[00:54:44] what it is we're all going to be here you know for a long long time and you know the vendors

[00:54:50] and the partners that that see it that way and see it as a collaborative you know learning opportunity

[00:54:58] and experience like you were saying Rich you know will be the most successful together

[00:55:03] but it takes somebody to start that and I don't know if it's a chicken or egg thing but together

[00:55:09] you know the best the best relationships I've seen have included you know that opportunity

[00:55:14] yeah I think you probably said it best in terms of you have to be proactive at the relationship

[00:55:22] and that goes for the msp or the vendor it doesn't matter who starts first

[00:55:26] it's everybody's responsibility to try and start first and create those meaningful relationships

[00:55:33] well Rich Eric thank you so much for being here today I really do appreciate it and hope

[00:55:39] to see you on one sometime soon absolutely against Eric we'll blast for us as well

[00:55:48] all right several important things came out of this first episode first is the idea of the

[00:55:54] msp ecosystem rather than the channel it's the idea that clients msp's vendors and other third

[00:56:01] parties are interconnected rather than a unidirectional flow from vendor to msp to client

[00:56:08] this changes the influence dynamics in two very important ways it means msp's have more influence

[00:56:14] over vendors than ever before use this to your advantage and there can be other parties involved

[00:56:21] with your clients that you need to be aware of and can possibly partner with second because of

[00:56:28] the interconnectivity of the ecosystem more and more vendors do not need you in order to

[00:56:34] transact with a client this means that you need to drive more strategic value clients can buy but

[00:56:41] what they can't often do is select configure and maintain the vendor's product this is where your

[00:56:48] value comes in not as a simple outsourced it but as a fractional cio cto or cso lastly one of

[00:56:58] the best tactics you can use in this new ecosystem is to create and maintain vendor policies for you

[00:57:05] and your clients these policies have strategic value and create value both in the initial creation

[00:57:12] and in recurring services around those policies they also put you at a strategic level with your

[00:57:18] clients not just taking help desk tickets maintaining infrastructure and providing security

[00:57:23] services the final and maybe biggest advantage is that it puts you in control of the ecosystem map

[00:57:31] for your client making you the central hub of all those relationships so there you have it the

[00:57:39] inaugural episode of all things msp evolutions this podcast will have monthly episodes if you're

[00:57:45] looking for a weekly podcast check out the original all things msp podcast with host justin escar

[00:57:51] and me your friendly co-host and producer we cover all kinds of topics relevant to you and

[00:57:57] your msp business but until next time work like a captain and play like a pirate

[00:58:05] all right you are not imagining things i forgot to give you the resource that i promised at the

[00:58:10] beginning of the show so that is the msp guidebook from comptia and it has a section in it on

[00:58:16] vendor management which i think is a great place to start if you're going to be looking at creating

[00:58:21] your vendor management policy or just creating a vendor management strategy in some way shape or

[00:58:28] form so i'll put the link to that in the podcast notes and in the youtube description so check it

[00:58:33] out thanks see you in the next one