You’ve heard of a SWOT analysis. Every few years, it’s a good idea to review your Strengths, Weaknesses, Opportunities, and Threats. But there’s a different perspective for you to consider: Perform a speculative SWOT of the companies that want to compete with you. Here’s what I mean.
One of the “Threats” that independent technology consultants have felt for a long time has been the commoditization of our business. As I go around the country I hear about MSPs being challenged by the likes of Staples, Best Buy, and even the phone company and the cable provider. Add to that list the folks who have had their eye on technology support for years: The business equipment company and the phone cabling installer.
These potential threats fall into two broad camps. One understands the tools needed to provide support for a small business (this list includes Dell, Ingram Micro, and the Geek Squad). The other camp understands one specific technology and thinks they know more than they do (this list includes the telephone people, the cable folks, and the business equipment vendors).
I hope you’re not scared of any of these!
These companies are all working from their strengths and a specific view of their opportunity. Each of them might (might) be able to provide certain services to your clients. But none of them can provide all the services. And none of them has a realistic view of their weaknesses or the threats they face.
Here’s the good news: you’re one of the threats they face.
Take a minute and look at the full picture and you’ll see that you fare pretty well. Specifically, look at the weaknesses of each of these entities. Do they understand small business? Do they understand the whole networking infrastructure? Do they understand security at a meaningful level? Do they understand backup and disaster recovery? At a basic level, do they understand DNS, DHCP, and TCP/IP enough to do real troubleshooting? What about POP3 and IMAP?
The biggest weakness these companies have is that they each understand some small piece of the network and think they can pick up the rest. And that is precisely where you become a threat to them. You can learn the technical side of their business much more easily than they can learn yours.
All the businesses that think they can make in-roads into managed services have something in common: Their technology is moving to IP – Internet Protocol. And that means they are moving to an architecture that you totally understand (or you should).
Troubleshooting an IP camera system? An IP security system? An IP telephone system? The most important skill you’ll need is a good thorough understanding of TCP/IP. If you have a grasp of the 7-layer OSI model, that’s even better.
I’m not saying that they can’t figure out the details of serving small business. But you’ve already got that figured out or you wouldn't be in business! I’m simply saying that your business should include every single technology that uses TCP/IP.
Best Buy’s Geek Squad is a perfect example. They never made the kind of in-roads they expected with small business. They never understood the businesses they tried to move into. They never figured out how to make money in this market. You may know someone who took their computer to Best Buy. But have you ever seen a business that relied on them for their I.T. support – let alone managed services? Probably not.
Make a list of all the things you do that these would-be challengers don’t do or can’t do. Educate your clients and prospect about this. Your list will make a great start for a marketing letter on “What to look for in your technology consultant.”
Now let’s take a look at that reverse SWOT analysis.
The greatest strength these organizations tend to have is their sales department. They have lots of people whose full time job is hunting for new clients. Their greatest opportunity is small companies that have never had I.T. support before. Their ideal target has no real budget and is probably not willing to spend much.
So their ideal target consists of people you probably don’t want as clients.
The greatest weakness these companies have is their technical ability. For example, they tend to solve problems by using the Administrator account or giving users administrative privileges. Another way to look at this weakness is that they don’t know what they don’t know.
For more than fifteen years I’ve asked job candidates to fill out a self-evaluation of their technical knowledge and experience. This includes the protocols mentioned earlier in addition to Active Directory, Windows Server, SQL, Java, and so forth.
A very interesting pattern emerged early and has remained true to this day: Every single person rated their knowledge of DNS at 10 out of 10. Some of them knew nothing except for the fact that you have to enter the first and second DNS servers plus the gateway address in order to access the Internet. They thought that was all there is to know about DNS. The point is: Everyone thought they knew all there was to know about DNS. On this subject, they didn’t know what they didn’t know.
People who install phones generally don’t need to know anything about RAID arrays, Active Directory, or firewalls. People who set up office scanner/copiers should know about basic TCP/IP services and email, but they normally don’t even know that. So troubleshooting a SAN or an intermittent wireless access point issue is a lost cause.
So now let’s look at the threats these companies face. This biggest threat is the same fear shared by many MSPs: Commoditization. “Everyone” can offer their service. Well I don’t know about everyone, but a good technology consultant with serious experience in TCP/IP could easily enter the market for digital signage, security, telephony, and business machines.
In fact, if you’ve been in this business very long you’ve probably helped these folks to get their equipment connected when they couldn’t figure it out. In our MSP, we insist that we be onsite when any vendor touches the network simply because they don’t know how things work or how they might mess things up.
Consider how you can use this perspective to help your clients more, win more business, and maybe even scare off the so-called competition.
For years we’ve been tempted to say that we want to manage 100% of the client’s technology. That was a tall order when we had to tip-toe into completely different areas of technology. But over time virtually all of the technology has evolved to IP. We are quickly approaching the time when only one group of service providers can claim to manage every bit of technology in the client office. Thankfully, that turned out to be us!
Not only can you reach deeper into your client’s existing business infrastructure, but you can sell these technologies as well. So you can both sell and service all of their technology. As we approach the second half of the year, this is a great time to start talking to your clients about the new services you can offer going forward.
You might have yourself a new business model by the time the year’s over!
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