Episode 23: Risk and Opportunity

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Erick and Rich discuss the security-related dangers of selling AI services, and why mitigating them is a smarter move than sitting on the sidelines, as well as why it may be time to hit the reset button on your website. Then, in a first for MSP Chat, your hosts join Eric Anthony, of the All Things MSP podcast, for a simulcast conversation about what the new channel ecosystem means for MSPs and their vendor relationships and much, much more. And finally, one last thing: How a U.K. attorney finalized a client’s divorce by mistake, and why the government refused to undo the error.

 

Discussed in this episode:

 

All Things MSP

Threading the AI Risk/Reward Needle

Wrong couple get divorced after solicitor ‘clicks wrong button’

 

Transcript:

Rich: [00:00:00] And three, two, one, blast off, ladies and gentlemen. Welcome to another episode of the MSP Chat Podcast, your weekly visit with two talking heads talking with you. About the services, strategies, and success tips you need to make it big and manage services. My name is Rich Freeman. I am chief content officer and chief analyst at Channel Master, the organization responsible for this podcast.

I am joined as I am every week by our other cohost, our chief strategist, my friend of many years, Eric Simpson. Eric, how you doing?

Erick: Doing well, Rich. Hey, like we say around a MSP chat parts. Another day that ends in Y.

Rich: Yeah, I hadn’t noticed that before, but that’s good. We’ll just keep heading for Y basically.

And why will we do that? Because we want you to be as successful as we’ve been and we want to share with you. What we know about managed services and success in managed services, and we’re going to do that this week, Eric, in a very interesting way. I’ll set this up quickly now. This will be coming later in the show.

But our interview segment this week is actually going to be a live simulcast with Eric Anthony of the all things MSP podcast. If you are familiar with a fan of that program Eric and I both are. You’re going to later in the show you’re going to see and hear that the two of us Join in a an episode of All Things MSP.

The three of us are going to have a conversation about vendor management and changes in the the channel ecosystem and what they mean for MSPs. And that exact same conversation will wind up not only in this episode that you’re enjoying now, but in an episode of All Things MSP. So a little bit different fun.

Stick around for that. It is coming up, but first let’s let’s dive into our story of the week. And this is torn straight off the cover of the latest edition of Channelholic, my blog which you will find at channelholic. news. Surprise, Eric, it has to do with artificial intelligence.

I had an opportunity to speak not too long ago with Rob Scott. I’ve known Rob for a while. He is an attorney. He works with technology companies, specifically with MSPs. More recently, he launched a vendor called Monjur, M O N J U R. They describe themselves as a contracts as a service vendor.

Basically they provide templated contracts to MSPs. And Rob and I were speaking about what AI means for the contracts. that MSPs are relying on right now and the legal risk that AI could potentially expose them to. And the, long story short if you are an MSP listening to this or watching this and you’re thinking, I’ve got an MSA, in place and I drafted it with an attorney and it’s got all sorts of great exclusions and protections built in for me there You are probably not as protected as you think you are with regard to ai and because of all of the risks related to ai that we’re aware of and Don’t need to belabor from the hallucinations to the data leakage unethical use bias you name it.

There are all sorts of new issues presented by artificial intelligence. Your current MSA might not be offering you legal protection from those issues. Now, here’s the key thing, Eric. Rob Scott at Monger did not bring this up to me to tell me, therefore. MSPs should stay away from AI, quite to the contrary, he is a big believer in AI as a huge new opportunity for MSPs.

He wants them getting into this market sooner versus later he just wants them to do it safely. And so he, Mondra has introduced what’s called a service attachment for AI. So you’ve got an MSA, you create this second contract called a service attachment for managed AI. It protects you from all these things.

Your current MSA doesn’t. And that sort of supplements the MSP and allows you to get into artificial intelligence safely. Eric, there’s this ongoing conversation among MSPs about AI. Is it premature for me to be getting into that market right now? Can I do that in a way that’s, both responsible and isn’t going to get me in trouble with the their client or their customers or anyone else, should I wait a little bit?

Rob Scott would say, I frankly would say as well, you want to be getting into this market now. Before everyone else, you don’t want to be the laggard in AI. You want to be getting started now, but if you are planning to do that, have done already, you want to make sure you’re doing it safely.

So [00:05:00] take a good close look at your contract, talk to your attorney, make sure that if you’re doing anything, contemplating doing something in AI, that you are properly protecting your business.

Erick: Yo boy, Rich, AI will be the story of 2024, I believe. And think every conversation that you and I have, whether it’s on the show or working with clients or MSPs, this is the big elephant in the room.

And whether or not you decide to participate in AI and deal with, the proper preparation and address the risk and engage with your legal counsel to make sure that you’re protected, your clients will drag you into it. So that’s, I’m speaking from experience, rich. I never thought I’d deliver some of the things that I delivered as an MSP in my MSP, because I never thought they were a thing, from liquor control systems to all kinds of craziness.

The client said. Hey, would you guys, do you guys do that? And of course our sales team would say, of course we do that. Then we’d have to go figure it out. And that’s not the way we want to approach AI or cybersecurity or anything like that, because the risk is simply too great. Just like you illustrate in your article at channel Hallock it’s, this is something that is coming our way and it is here.

It’s incumbent upon MSPs, even if they don’t think even if they think they are not going to deal with it, they need to prepare for the eventuality of it because it’s never, if you’re going to get drug into a conversation or be impacted by a client, having to deal with some negative situation based on AI or a cybersecurity incident or something like that.

It’s when, so I’m with you, Rich, get in now, prepare yourself. And even if you’re not ready to bundle and package and present, something in your portfolio of services, that’s very AI specific, at least protect yourself now. In case you get drug into it.

Rich: Yeah. It’s such an important point, Eric, and it lines up perfectly with something that came up in the conversation with Rob, where he said, a few years back I would talk to MSPs are, are you going to be getting into security?

Are you going to be a security specialist? And a lot of them would say no, we’re not planning to do that. And Rob’s retort always was like it or not, you are a security service provider. That, that’s coming your way, whether you choose to embrace it or not. I think you’re exactly right.

It’s the same thing with AI. So even if you decide to sit in the sidelines a little bit before making a commitment, you still should take a look at your contracts and make sure that you’ve got some protection in there because yeah, absolutely. Eric, these things are headed your way, whether you’re ready for it or not, and at least make sure to To protect your business from that.

We’re not, if you add a service attachment to your MSA, you don’t have to completely redo your MSA in order to add some AI coverage in there. But your tip of the week, Eric, has to do with something. I believe you’re going to recommend to people. They just hit the reset button.

Erick: You’re absolutely right, Rich. And so I’m just going to hit everybody with it. It’s time to ditch your website and start over, right? If you have a website. That has not been updated or meets the interest level of what today’s buyers are looking for, then you are losing opportunities to your competition and rich gone are the days where we could get by with a website that was a list of services, a menu, Of things that we do clients, this, let’s work for us back when we were in the olden days of, managed services where clients were really trying to figure out, okay, what’s in this and what is, what does it do?

We are now dealing with mature business owners who may have been through A bunch of it providers and MSPs already. So they’re not really looking for transactional services. They’re looking for consultative services are looking for folks that can give them that strategic guidance to help them make the most of the technology that they’ve already invested in and then guide their technology investments and integrations moving forward into the future.

Rich, we’ve talked on this show many times about what the post pandemic buyers are buying today. And it includes cloud migration, SaaS applications. It includes cyber security. It includes hybrid workforce support. And I’m going to say it, it’s going to include AI in a minute here, right? So take a look at your website and rather than try to just.

Edit it, tweak it a little bit. Just start with a new site that it speaks to your [00:10:00] consultative value, to the business outcomes that you bring your clients, their testimonials, and make it easy for them to engage with you. Get some thought leadership content up there, get a white papers, get some case studies going to incentivize.

Folks that are driving by your website to go, Oh, I want to read that. That speaks to my business needs. That speaks to my pain and get into the next evolution of strategic value and make sure that your website represents that make sure that your online social media pages represents that and move where the puck is going to be.

We’re talking about adding more value to our client relationships, rich, which means. We’re not looking for C customers. We’re looking for A clients. We might take some B clients along the way but we’re really looking for the clients that are in a growth mode that are willing to invest and Know that they get what they pay for in terms of strategic value and being one of the seven people consultative inner circle That business owners surround themselves with rather than just be seen as a vendor.

Rich: Yeah, this is a really important point as well. And we have spoken before on the show, a lot of what MSPs historically have done manage endpoints, manage networks. These are becoming commoditized services, reselling and supporting basic SaaS solutions, not a high margin, a highly differentiated kind of business, what you need to do both for the health of your business.

And because this is increasingly what the end users want is get into that consultative. Outcome oriented, solution oriented kind of mode. And absolutely that should be reflected on your website precisely because it’s what the buyers want and are looking for. If they come to the website and see a company that is just talking about products and hardware management, they’re going to move on to somebody else.

And it’s, sometimes it is not so easy to just Revise and shoehorn some new messaging into an existing marketing deliverable. It probably, to the degree that consultative approach is a new message for your business, you’re really probably going to need a brand new website

Erick: and rich.

It’s so important. What we’re talking about right now, MSPs, if you’re like me, you’re engineers first, right? And you think, oh I can make a website. I can do this. Rich MSPs are probably need help in two big areas that we talk about a lot, marketing and sales. Get some help, get a trusted advisor, build your website for you.

You don’t have to spin another plate. Do what you do best. Focus on the things that you know how to do best and get the outside advisory support. To get you what you need just like you present the opportunity to your prospects to say listen You know stop trying to break fix this stuff yourself You need to bring us in so we can manage it for you so you can focus on growing your business Take your own advice, you know eat your own caviar if you will and get someone that knows how to construct the website deliver that marketing message that You know, that, that value proposition, get your new brand out there and evolve into that next level of strategic business partner that your clients will appreciate you.

Rich: It will be money well spent folks. I truly believe that okay, so we are going to take a quick break when we come back on the other side it is time for what I was talking about earlier on So when we come back from the break eric and I will be back We will be joined by eric anthony of the all things msp podcast and in fact The three of us will be having a conversation That simultaneously shows up on this episode of MSP Chat and an upcoming episode of All Things MSP should be a lot of fun.

Stick around. We’re going to be right back. It’s going to be fun. Stick around.

Erick: Hey there, All Things MSP crew. This is the very first episode of the new All Things MSP deep dive podcast called ATMSP Evolutions. And today we’re going to be talking about something that Has evolved into this thing that every MSP, I think, needs to be aware of and start doing as part of their best practices in their business, and that is vendor management.

Once upon a time, you could get away with just signing up with a new vendor and that’d be okay. Cyber security, supply chain attacks, all kinds of things have started to rear their ugly heads. In terms of vendors and their things that [00:15:00] we need to be paying attention to. So of course, with me today, I have Rich Freeman and Eric Simpson from channel mastered, who are obviously, well known in this space.

Don’t need a lot of introduction, but I’m going to go ahead and let them introduce themselves anyway.

Rich: Thank you so much, Eric. I actually I think you may have mentioned this earlier on, but I’d forgotten that this is your inaugural episode of All Things MSP Evolution. So we are actually very excited.

We were looking forward to this conversation anyway. We’re super excited to be on the very first episode of the show. And super excited to share that with our audience as well. So Eric and I, as he said, are two of the founders of Channel Mastered. This is a consultancy that works with vendors that have or would like to have, or would like to improve MSP partner programs.

Eric and I are also the co hosts of our own podcast as well. And we are simulcasting this conversation on that. That podcast too. It’s called MSP chat and folks in your audience, Eric will find that wherever it is, they get audio podcasts, they’ll find it on YouTube. Et cetera. Specifically me, I’m the chief content officer and channel analyst at channel mastered.

Eric, the K over to you.

Erick: Yeah. I’m recovering MSP as many of us are nowadays. Built and sold one of the first MSPs in the industry and then founded MSP University and have been working with, MSPs ever since that day. So I’m not going to age myself and tell you guys how long ago it was, but those that know.

Today I love working with MSPs. I love working with vendors. I love working with entrepreneurs and just making a better ecosystem and community. That we all participate in and grow together. So thanks again, Eric, for having a song. This is exciting. Congratulations on launching the new podcast. Yeah.

Thank you. And thanks for doing this kind of joint collaboration where we’re posting it on, all things MSP evolutions, but we’re also posting it on MSP chat. So super excited for that as well. And we mentioned vendors. This is more, obviously, geared towards the MSP audience, but we all know that we have some vendors who watch these shows as well.

And vendors, you should probably listen up to this one, because although we’re giving it as a blueprint for MSPs, it should also be the model by which you are trying to create the right partnership program for your MSP partners. I’ve got some questions, and I know you guys have some questions too, we’re going to just go back and forth on this in a way, and, but I want to gear it towards the, how does this affect the new MSP, how does it affect existing MSPs are doing in 2024, what’s changing, because ATMSP Evolutions is about The future and I think this is something that’s very relevant for the future because it is something that’s changing So in your mind and i’ll start with eric in your mind What kind of is the definition of and scope of vendor management to you?

Oh boy I look at it from two perspectives, right because and this is something that every msb Looks at as well. It’s managing our own vendor relationships But on top of that, it’s managing our client’s vendor, right? And sometimes there’s crossover. Sometimes the client’s vendor relationships are the vendor relationships that we introduce to our clients.

And sometimes the client’s vendor relationships are things that come with a new client, right? And so our job as MSPs in managing these vendor relationships, I think can be boiled down into a couple of, I think, Simple ideas, which means we need to have the best relationship with our vendors, whether they are our vendors, we’re sharing our vendors with our clients or managing their vendors so that we have influence and leverage on delivering the best service and outcome for our clients.

Now as MSPs, Eric, you well know that when we consider engaging with a vendor to power our services or to help us grow our businesses. We’re typically evaluating them from a couple of different perspectives. The first one is we’ll be, we’ll bring in this vendor on, be good for my clients. Is it a product service or solution that I’m adding into my stack that today’s MSPs have had to adapt and adjust to as you introduced in your intros.

Like we, we are a post pandemic now. Today’s buyers are buying different things than what they used to buy. So we’re focused now on. Cybersecurity, cloud and SaaS application [00:20:00] management, hybrid workforce support, right? So cybersecurity being, the through line through all of this. So is this product service or solution good for my clients?

Is it good for my team? Or am I just adding vendor sprawl, right? That’s a common challenge that, that MSPs are looking at now. And how do I address that additional cost? And make sure that I’m profiting from it with my clients. Not that we’re, we just want to make sure that we’re meeting our minimum target margins.

And then thirdly, how easy is it for me to integrate into my processes and platforms, bill for it and sell it and manage it. So I think from the perspective of what does an MSP look like from a vendor management perspective, Rich, you’ve got stats on this. How many, vendor relationships, a typical MSP has.

So I’m going to kick that over to you to chime in here, but it’s a lot. It’s certainly a lot more than when I had my MSP practice and sold it many years ago, right? So there has to be a give and a get, that’s a partnership between us and our vendors. And we have to work together in unison to grow each of our respective organizations.

Every one of us has different needs. And, Rich and I do a session at many events where we talk about, the difference between vendors and MSPs, one being from Mars, one being from Venus and how, what we look for in good collaboration in order to go to market together and succeed and thrive.

So I’m going to stop there and and kick it over to Rich.

Rich: Yeah. And I don’t have, unfortunately, I don’t have the specific statistic you were alluding to there, Eric, at my fingertips, but I can say that based on multiple research studies, I’ve seen. Just within the last month or two that by and large MSPs are consolidating their vendor relationships.

So we’ll probably get into consolidation at some point in this conversation. But they have a lot of vendor relationships to juggle and But partially as a result, they’re actually looking to reduce those numbers right now. The other thing I want, want to follow up on a little bit. Actually things that both Erics on this podcast have talked about, because Eric, without a K you were saying that the vendor management issue is even more relevant than it normally is right now.

And I would totally agree in part because the population of vendors out there continues to grow and grow and specifically the population of vendors who want to do business with MSPs. So you’re going to have more and more companies coming after you trying to win over your business. You’re going to wind up having a lot of vendors to evaluate and some decisions to make about how many relationships.

That you want to have. And then the other thing, Eric with the K, you were talking about vendor management as an opportunity to influence vendors. And I think precisely because there are so many newcomers to the MSP channel right now, That’s especially important to the degree that you are partnering with a vendor who’s relatively new to MSPs.

You really want to take advantage of that opportunity to show them the ropes a little bit, help them understand what’s important to you so that they can learn rapidly and accommodate those wishes.

Erick: Yeah. And, you mentioned something, Eric, call, you talked about how you’re not just dealing with your own vendors.

You’re dealing with your clients, vendors as well. And that’s what we call ecosystem now. And, it used to be there was a channel. It went from our vendor through us to our client. And it’s not that way anymore. It’s much more of a network of vendors, clients, and providers. And so it’s a very different world in that aspect as well.

Any comments on the ecosystem versus traditional channel piece? Yeah, I think that what what we’re seeing at Channel Master and what a lot of analysts are sharing is that we are moving toward more of an ecosystem future. And this is a scenario where, Eric these clients that are coming to us are basically, transacting.

More directly for some of these applications or for some of these services and, to have a seat at the table to be welcomed in as a strategic value add to maybe a, an ecosystem of other vendors, which, may not be delivering technology or cyber security services. But Jay McVane will tell us, these folks include, attorneys and accountants and these trusted advisors.

That now these business owners see as their core team of advisors moving forward. So I think from that perspective, Eric, it’s important for today’s MSPs to become more mature in a more strategic way. Focus to add that value [00:25:00] or else risk being replaced by a competitor that can be perceived as adding more strategic value and having a seat at the table and being one of these core strategic advisors that our clients are now seeking to build in their growth strategy, moving forward or grow with in this strategy and understand who they are and work together to deliver these services.

And I think if we’re successful at doing that. Then that just means that we’re going to continue to grow the longevity of those client relationships and become more deeply valuable and identify more opportunities to introduce the services and solutions that clients need. And we’ll not we’ll not be seen as a cost center, but be more trusting to say yes to some of these things because we’re having those conversations from a more business outcome perspective, rather than a technology solution outcome.

And it’s that technology solution aspect and that influencer, you use the word influencer in your earlier answer. That really makes a difference and segments it out from the traditional channel because ecosystem, you’re right, it’s more about influence. And it’s not just delivering I. T. services anymore, right?

It’s almost, and I almost, I hate to use this term because some people are probably going to take it wrong, but a virtual CTO, somebody who’s actually manage managing the technology and how it’s being used rather than just the bits and bytes. Yeah. And I would offer that we see and hear this term banged about a lot, virtual CTO.

And I think that there’s a misconception of what that role really is or should be among a lot of MSPs, Eric and Rich. I think, they see this as, oh it’s table stakes for me to have that as one of the bullet points in my deliverable. But really to understand what that means, I’ve been a CTO in the enterprise.

I am, and a CIO on the enterprise. I understand that role is much different than what many MSPs think. It is and fail to deliver on the promise to their clients. And so when you’re thinking about becoming that strategic advisor, that influencer you take virtual out of it. You are now the CTO for for that organization.

It’s just like when people say, Oh, we’re outsourcing our help desk. Or when you bring in as an MSP and outsource third party to help you, Take care of the noise level one, level two, or maybe higher level escalation and the technicians, start blaming mistakes on That outsource help desk when in fact, they should be saying, Hey, this is our help desk, they’re part of our team.

We’re delivering that to our clients. So just like You know own the responsibility of what a cto does and deliver it fractionally, but don’t call it virtual Don’t call it fractional This is an embedded advisory role that you have and when you start thinking about it that way it changes The perception of what you feel is necessary.

And then it allows you then to say let me change my pricing model to accommodate that because it’s not some virtual thing that I’m adding on. Call me when you need me. I’m going to have QBRs. This is no, I am directing. The technology decisions and having some budget ownership in my clients relationships, it’s a completely different perspective in my mind.

Rich: Yep. And now Rich, you’ve had a comment. Yeah. There are a number of really interesting things that I want to quickly follow up on. And so first of all, to to tag in on what Eric was talking about there. You really want to have that CTO, that technology advisor role in your customer accounts right now for a couple of different reasons.

One of which being this is what customers are looking for right now, increasingly. They and they indicate this in all sorts of different ways, research studies, et cetera. They want and cliche alert, but they do want a digital transformation. They want solutions and not products.

They’re looking for somebody to guide them. On the best ways to apply technology for their business. So you want to be the person who’s meeting that demand. At the same time, a lot of the stuff that MSPs have historically done, network management, device management, et cetera, less and less strategic more and more commodified, less and less profitable.

So two good reasons there, basically to be that CTO, CIO to your clients. And then the other thing I’ll point out, just on the, in the general area of ecosystem versus those traditional channel relationships you were talking about Eric, is it changes the dynamics between MSPs and the vendors that they partner with.

So once upon a time, you might not even have considered. Working with a vendor who sells direct, for example, but there are a lot of great partner MSP opportunities out there these days in the ecosystem era with companies [00:30:00] that do sell direct sometimes. And in fact, sometimes the best thing you can do as an MSP is let the end user handle the procurement and, go ahead and buy direct.

They’re going to buy the software through some SaaS vendor and not know what to do with it. And that’s when you step in with the strategic advice and the monitoring and the maintenance and management and so on, that’s going to make you sticky with that client. So the evaluation criteria for vendors in the ecosystem era, I think is a little bit different.

Erick: Yes, absolutely. I agree with that. And the way I envision the role of CTO, and by the way, Eric, I love the fact that, drop the V, drop the virtual, the lawyer for the small business doesn’t call them their virtual lawyer. They’re just their lawyer. So yes, I think it’s very appropriate to just call yourself the CTO for a small to medium sized business.

And that role is not just reselling services or reselling products from a vendor. It’s exactly what Rich described. It is, sorry about that. I’ll edit that out. It’s not just about selling services or, selling a product through a vendor. You’re actually going and providing. It’s a higher level than that.

So whether they’re buying it from you or whether they’re buying it direct You are still the one involved in the decision I think this is something that is just a little bit of a difference, but it’s very important in terms of it’s Consulting is what we’ve traditionally called it, but it’s also You’re involved at a level that we’ve never been involved before as traditional msps And what I mean by that I guess is that You are not just taking something that they’re telling you they want to buy and configuring it, installing it, and whatnot.

You’re actually part of the process of deciding which product is the best one for their business. And that’s where it becomes a little bit trickier because In the past, a lot of MSPs haven’t done that. They’ve relied on the customer to say, this is the solution we want, rather than the MSP going in as the CTO and determining what the best product to solve that problem is.

I think that’s the highest value that we can deliver to a client, is, again, owning that role and saying, the definition of a CTO is I’m going to guide the technology strategy for this organization. And I’m going to evaluate everything that’s going on with every user, every platform, every service.

It sounds daunting, but you eat the elephant one bite at a time. You prioritize what’s going on in the environment. I was just on a coaching call with an MSP yesterday and, guiding them on delivering this role as the CTO. And I said, let’s survey the users. Don’t survey the business owner.

Let’s survey the users on their workflow, on their challenges. Maybe the business owner doesn’t know that it takes the AP AR department. Days or weeks to get accounts receivable and invoicing out just like MSPs are very familiar with that, right? Maybe it takes them, 75 mouse clicks to cut an invoice or to pay You know payroll or whatever that is, users Over time they feel like oh, okay.

This is just how it’s done And that’s what I have to do. And maybe they’ve raised concerns, the business owner is busy with other things and may not take immediate action, but when we analyze and survey and say, Oh my goodness, we should upgrade to this new version of the platform, or maybe we should look at different platforms or changing some process.

To make it more efficient for that for that valued staff member, who is the most valuable resource in that organization to do what they were hired to do and not lose a lot of time, just dealing with things that aren’t efficient. So things like that doing, a survey of the, of different business units and owning that, and then prioritizing it in our three or five year, Technology roadmap plan that we are directing.

Now you may have someone else in the organization that is doing the QBRs, the CTO is involved in that and, takes that feedback or injects feedback in to guide that. And not only to sell more stuff Eric and Rich, but to make sure that business owner and that organization is getting the most.

Out of the technology and services they’re already investing in.

Rich: Yeah, you’re reminding me and so I’m surveying the end users. I think that’s [00:35:00] a really smart way to approach this, but I know MSPs who particularly at a new account will, just go on site. With the customer, assuming folks, there’s an office there to go on site to wander around and talk to the employees because you’re going to learn about needs and issues and pain points that the business owner, the CEO might not know about, might not have top of mind.

And that’s going to give you. An opportunity to bring ideas to the CEO that they don’t know to ask you about. I’m remembering a story I was told years ago by the then CEO of BitTitan, and there was an attorney from their outsourced legal firm. Who came on site at BitTitan headquarters to spend two days there and, do exactly what I’m talking about.

Wander around, talk to people and this guy got a meeting with the CEO and asked him at one point, what more can we do for you to be a great legal partner for you? And the CEO’s answer basically was. Tell me the thing that you can do that I don’t know to ask you for because I’m not a lawyer, right?

And that’s what the msp clients out there want from you as well They absolutely want you to help them with the problems. They know they have but they want you to identify problems. Maybe that they didn’t know they have and show them how to fix this

Erick: Yeah, that is a great that’s great guidance and I recommend that msps Do that and survey the users during onboarding.

Do a survey first, get everybody’s pain and challenges out, and then you can have followup, maybe a little focus group, maybe a little different meeting, speak to individuals, and bring that information that business owner may not even be aware of into the conversation. As we want to address the immediate pain, buyers want to address an immediate pain.

I have this challenge. I don’t want any of this fixed, but then. There are all these other latent needs that also need to be addressed, and they’re always looking at the okay. What’s the next thing? What’s the next thing? Let’s look at this thing as a whole, and maybe we can put together an approach that addresses a lot of things in one fell swoop, and then, you’re looking for early wins in those brand new relationships, right?

And the users and the business owners by now they’ve had MSP already, right? You’re in there replacing somebody else. Odds are, right? And so you need to make a bunch of wins and make a quick difference to elevate the the perception of value to confirm that buyer’s decision to engage with you, that business owner, and to let the users know, wow, this is refreshing and different.

I like this new CTO and their company, right? And that’s a great way to kick off. A new client relationship. And it’s an excellent way to differentiate yourself as well. There’s another thing that we brought up early on, and that was sprawl. The number of new vendors that are in our space now, and a lot of small vendors as well.

So there’s a lot of this, these vendors are doing a very consistent job of trying to get into the pockets of MSPs. And maybe they have a great tool. Maybe they have a tool that the client needs or the MSP needs, but with so many of them out there, so many of them banging on the door, there was a post.

I forget where it was. I think it was probably on Facebook or LinkedIn today, where somebody was calling an MSP at 5 30 in the morning to try and get their business. Obviously that didn’t go over very well. Vendors that are listening to the call, please don’t do that. It will ruin your chances.

But how does the average MSP now go about filtering through this just massive field of new vendors that continue to come knocking?

Rich: That’s tough. I was actually going to raise this question and maybe get your take on it Eric, because it’s an interesting one and it’s on my mind as well.

Traditionally, if you’re out looking evaluating vendors. The table stakes requirement is, do they integrate with my PSA? Do they have a multi tenant interface? And there are all these young newcomers to the industry right now that don’t necessarily have that yet, but are maybe headed towards that.

And so it raises the question, can you just filter them out until they do have it because it’s really just not acceptable, it’s not going to be a practical or profitable to work with them until they do, or where do you set the bar where like in cybersecurity, for example, there’s something so new and different and exciting about this.

This capability here that I have to at least consider doing business with them, even though they don’t have that maturity that the more established vendors have. I think it’s a harder question to answer now than it used to be.

Erick: Oh, I think it absolutely is. Eric, go ahead. I’m sorry. Yeah, it’s very challenging.

There’s so much. So much more to filter [00:40:00] through now, in the olden days things were simpler. You everybody used the same stuff. And the differentiator was how the relationship with your client and that kind of thing. And today there, there is so much interest and attention focused on the MSP panel because vendors know, I know that’s the golden goose.

These are the advisors that. And allow or deny their entry into their, into their end users environments. Like we have that influence. And so more and more vendors are seeing that, like we know at a channel master, we worked a lot of, pre launch vendors that are, just getting funding and things like that, and we’re looking for market assessment, product market fit and all this.

And we have these conversations with them. How do you distinguish and differentiate yourself from who the MSP thinks you compete with? And, other than the table stakes that we’ve already talked about, like the, the business necessities for an MSP to even consider you, where do MSPs go to get objective feedback?

And today there are lots of communities, there’s social media, and you got to be careful right out there because it’s tricky. There are some platforms that are a little bit you got to take it with a grain of salt. But who do you engage with? Who are your posse that you get your information from?

There are tons of great podcasts like yours, Eric, like ours. There are lots of communities out there. There are peer groups, there are lots of ways that you can get feedback, but you’ve still got to filter it out and you have to have a mindset, I think, as an MSB. That says I’m going to reevaluate my entire solution stack on a regular basis, not just one thing or the other thing, I do a lot of work with MSPs that want to, bundle and price and add Hey, I need enhanced cyber security stack now so I can sell it to my clients and what they fail to realize is they’re dragging along maybe some legacy stuff that doesn’t meet today’s needs.

From a cybersecurity perspective or something else, because they’ve been using it forever and they just say, no, we’ve got that covered. No, I say, look, evaluate your entire stack buyers are different now than they were before the threat. And the risk is much different, but the opportunity is so much greater leading with cybersecurity.

And I say, look, evaluate and do this on a regular basis, maybe a yearly basis. Look at everything and look at what’s in your stack and look at the rising cost of these services and solutions. Make sure that you’re truing up your clients. Don’t ask, permission first to raise your rates. Ask forgiveness afterwards.

Hey, we’ve kept our pricing low. We’ve added these new services solutions. You’ll see this reflected on your next invoice and deal with the small, low, single digit percent of clients that complain one at a time. And don’t give them a pass. Just maybe negotiate their price increase a little bit different.

Give them a little something to keep them on board. Or. If they’re C customers and you need to make room to take on more A clients because they’re costing you money, then put yourself in a position to do that. But you’ve got to be profitable. You’ve got to be efficient and effective, and you’ve got to do what you’re delivering your promise to your clients or your own company to evaluate what’s going on in the infrastructure and make different technology and vendor decisions.

To help you and by extension, your clients.

Rich: And I’m going to quickly add one last little piece. Cause you were talking Eric there for a little bit about. The wisdom of rethinking your stack on a regular basis, which I think is really smart and important advice. And to tie into a theme that’s come up a number of different times here, precisely because you have more and more vendors competing for MSPs out there.

You have more leverage in that conversation than you did before. So you can go to your vendors and say, look it’s my semi annual rethink on the stack. Here’s what I love about what you’re doing for me. And here’s where I’m not so happy. And I’m looking around, what can we work out here? You don’t necessarily own the outcome of that conversation, but you’ve got more leverage than you did before, particularly.

If you are one of those high performance, profitable kind of MSPs Eric’s talking about, if you’re doing a good job, they want you and that gives you some room to be a little bit more demanding in your conversations with vendors

Erick: and that side of that. Real quick. The flip side of that rich is the competitors that you’re talking to the vendors, they know that you’re working with that particular vendor.

And they will sweeten the deal. How many times have we’ve heard that when you’ve got a ton of endpoints you’re managing? Boy, oh boy, it gets pretty interesting in those conversations. Go ahead, Eric. I was just going to say that in terms of the competition and the leverage, Rich, that you just talked about, that is 100 percent true.[00:45:00]

It used to be that MSPs had no leverage with their vendors. Back, Eric, when you and I were MSPs. We took what we had to take because, first of all, there wasn’t a lot of choices out there, number one, but number two, the traditional channel model flows one way. And that’s another difference with ecosystem is ecosystem, because it’s interconnected, the influence flows both ways.

And so I think it’s absolutely correct that if MSPs are not pushing back on their vendors today they need to be, they need to be. And then Rich, you were saying something about what was it trying to remember, Oh the risk profile of a vendor. What do you do when you’re. Looking at a vendor, you like what they have, but they can’t really put a finger on how much risk they’re going to be to you.

By providing the right certifications and best practices and stuff like that.

Rich: Yeah it’s really hard. And I once upon a time, and I should probably say, I didn’t mention this before, but in addition to being part of the team at Channel Mastered, I’m a journalist who has covered the channel for many years.

I was the founding editor, former editor in chief at Channel Pro. I’ve got a blog called Channelholic these days that you can find at channelholic. news. Once upon a time, I remember writing an article. I had a conversation. With a venture one of the managing partners at a venture capital company, because I wanted to understand how his mind works, how a VC firm’s mind works when they’re evaluating vendors.

It’s a similar kind of challenge, and one of the key variables that they’re looking at is that risk element. They’re, obviously looking at the strength of the technology. And how much, as this guy put it, white space there is in the market. Is this something new? There’s a lot of upside growth potential.

Or are they entering some sort of mature market? And it’s going to be a fight to get in there. But once they’ve convinced themselves there’s something there. They’re looking at things like who’s behind this company? Who founded this company? What have they done before? What do I know about them?

Because it really is, it’s a giant problem. Basically, if you place a big bet. On a company on behalf of your business and your client’s businesses. And they go under, their security practices don’t stand up the test of time and so on. I think there are areas in a traditional MSP vendor relationship where, you’re going to need to be a little bit more flexible than you were before in terms of things like, are they archived?

Are they not channel only, for example, are they, how many PSN, PSA integrations do they have, some of the stuff that we’ve talked about before, but I do think there are some bedrock things you really have to satisfy yourself about before you force that relationship, and I think that, that financial risk, that security risk, that relationship risk is pretty high up on that list.

Erick: Yeah, and we’ve offered them some practical advice already, right? We’ve told them that they should be reevaluating their stack from time to time. I would say at least once a year, if not twice. And you have to start there because you have to start from where your needs are and where your client’s needs are before you start going looking at vendors.

Now, I think it’s fun to go to a trade show, for instance, And see what’s new and something might catch, right? You might see something new that catches on and you say that’s something that I can add to my stack that I can sell, or I can create an efficiency with that’s going to drive to my bottom line.

But other than that, a lot of times it can be a distraction, especially with as hard as those vendors are working to get your attention. In terms of practicals, make sure that, you’re doing the evaluations, but you’re not letting everybody pitched you all the time. And then also, obviously cybersecurity credentials are important.

And a lot of this. It comes down to what I’d like to probably encourage MSPs to do, and that is to create an actual vendor management policy within your organization that spells these things out. Eric what do you think about an MSP creating a vendor management policy? I think it’s part of your R& D process, right?

So the more mature MSPs, we did this in my MSP, it’s like we, we established an R& D policy and it covered. Different things, different areas, specifically around vendors and solutions and services. When is it that we re evaluate a product service solution or a particular vendor? What is it?

What is it that we’re trying to do? Are we trying to replace something in our stack? Do we have a client that has this, outlier need that we, decide, okay, if we can make this a success, then we can roll it out to more clients. How do we do that? Do they have like pilot programs?

So there’s lots of [00:50:00] criteria. You just apply as an overlay to a vendor evaluation, just like you would do for a client that says, Hey, I need to rip and replace this technology. You’ve never worked with it before. You’re going to engage with a vendor, and you’re going to do a pilot, and you’re going to see how it goes.

You’re going to, implement it in, inside your organization first as a test. You may, get a client that’s interested in engaging in that. And you say, okay let’s deploy to, a business unit person and see how that works. So there are a lot of, evaluation criteria that go into that.

But the first step is to say, yes, we’re going to establish a policy whereby You know, all of these things fit. What is the policy? What, what is the scorecard that elevates the need for one thing over another? What takes the most priority? Cause like you were saying, Eric, we don’t want to just look at everything all the time, all at once, right?

We have to have a process whereby there is a structure and we elevate the next thing that we’re looking for and have a plan. So like you said, a great way to engage with a ton of vendors is at a trade show at a conference in an expo hall. But have a plan for that and say, look, I’m looking to fit this, this need right now.

So I’m going to make the most efficient use of my time. Maybe there’s a couple that I’ll talk to because there are other things on that lower priority list, but I’m going to get the information and data I need by talking to them directly and understanding whether or not in my scorecard, they are a contender.

And so you have your different things that mean. That mean different things for different MSPs. You may have, different requirements or the stack ranking is a little bit differently, but they’re going to include some of the table stakes stuff that we already talked about, then you’re going to add, the things that make you different or unique, or what your clients needs are different or unique and have a process for that.

So the important thing is to establish framework, a process, and then stick to the process. Don’t color outside the lines. I see a lot of. Technicians get excited and you go, Oh I like this other feature that they have. But they don’t have this feature that’s required. You’ve got to, you’ve got to stick to your guns.

If you’re going to get traction in your business, you got to stay focused and you’re going to make a long term commitment. It takes a lot to introduce a new product or service or solution into your stack and deploy to your clients, or to rip and replace something that’s already out there.

Because maybe the technology is old. They’re not updating it often enough. The new stuff is on a way better platform. It’s multi tenant, right? It solves a lot of issues. So it’s a deep conversation that I think needs consideration. internally before you just start, firing first and aiming afterwards.

Rich: Yeah. And I’ll test this proposition as well. I’m the one non MSP current or former in this conversation here right now. But I would think part of the appeal, the logic, the benefit of having a vendor management policy is not only is that going to increase the consistency and the effectiveness of the evaluation process, you’re going to be asking the same questions every time.

You’re not going to overlook a question that you really should be thinking about when you’re approaching a new vendor. Also you guys the Erics, you tell me it, you could share that policy with vendors you’re evaluating potentially. Here’s how I evaluate the vendors I partner with. Take a look at this list.

What do you got? And then they know what they need to address with you. See how effectively they can do that.

Erick: I love having them qualify themselves to you, right? Correct. Yeah. Have them. Yeah. And it probably saves a lot of time. Labender can say, Oh yeah, we can do six of these things, but not the other four.

Thanks for your time. Yep. And honestly, most of the time they probably have more time and more people to do that self evaluation first, rather than you having to do it and it’ll save you a lot of time. Absolutely. And there, there are other things that, that come into this, questionnaire, things like, MDF, partner program benefits.

All these other things that are. You go need to have, and then nice to have, right? Yep. And so when you have two competing vendors that the need to have stuff is, there’s, I can go either way, but then one vendor has a few more nice to haves in there that can sway the decision.

Exactly. They’ll end up higher on the scoring chart and that’s what you should do. You should literally score them. So it’s less of how you feel about it and more about the actual. Facts involved with what they’re satisfying, how risky they are, and all of those other components that go into it.

Removing the emotion. Yeah. And, we talked about at the very beginning of the show, we talked about the evolution of the MSP and the CTO role. And so I think we can actually take vendor policy management one step further. And that’s an area because a lot of the vendors that clients have are technology based vendors.

We can actually extend that vendor management policy down [00:55:00] into the client as well as part of the CTO role. Yeah, I think, anything that, yeah, I think that anything that we spend time, energy, and effort into developing for ourselves is another value as to how many times and how many ways can we repurpose it.

And I think that’s a strong strategy, Eric, where you’re sitting down with a client when you’re presenting the value of the CTO service and why you should engage with us. And show them the scorecard. This is how we are going to evaluate every single vendor, every single solution that powers your business today.

It reminds me of when, I used to sell our managed services in the early days. I, and this is one of my probably most downloaded free asset that I’ve given away over the years is 117 step new client onboarding process. And it was like every single thing that we did. And our sales team would go out and they would use that as a sales tool.

Say look here’s how we onboard our clients. And they’d share this exhaustive, checklist that the client would immediately say, wow, my last provider had done that, I wouldn’t be talking to you guys right now. And it set the tone. For how they would interview every succeeding competitor after that.

So I want to get in there early, and present it because the first thing they’re going to ask as part of the conversation or part of one of the things they would ask is, tell me about your onboarding process. And we would win every time because back in the early days, not a lot of MSPs had matured to that level that we were at.

And so it was a competitive advantage. So this is the same thing. Show a client. Scorecard, show them how you’re going to onboard them, and then execute on that. You can’t promise something and not deliver because then you’re going to erode that confidence in that, you’re going to get a cool, that relationship before it even gets a chance to get started.

Rich: Yep, and it’s a perfect example of what we were talking about before, bringing something to the client that they don’t know to ask you for because they haven’t really, they’ve never seen a vendor management policy before, they haven’t thought at all, haven’t had time to think about the potential advantages of that.

This is how you really underscore your value to the clients is by bringing them the stuff that will benefit them that it never would have occurred to them to ask you about.

Erick: Now, Rich, as we’re wrapping this up, because I know we’re at what we decided was going to be our kind of time limit here.

Because you’ve interviewed so many vendors and MSPs over, your career, what have you seen in terms of attitudes? Of the vendor MSP relationship that you’ve seen the more forward thinking vendors and MSPs kind of gravitate to.

Rich: So I think the I think the, on the MSP side of that equation the most successful sort of forward looking MSPs really do approach vendor relationships as a strategic partnership.

And so they’re going to be a little bit more forgiving of mistakes in certain cases. They’re going to be a little bit more direct about their aspirations. I I’m trying to encapsulate it a little bit, but it’s a little bit more like less griping and more collaborative go to market strategizing.

So understand make sure that the vendor understands what’s important to you, but try to understand a little bit about what’s important to them as well. And look for those opportunities. They should be doing this too. And this should be happening on the vendor side too, but. Look for those opportunities to work well together.

I think that mindset is very appealing to vendors. And then on the vendor side I think the one well, what I have certainly noticed, and this won’t come as a maybe a huge shock to either of you. But there are a lot of vendors out there who are liked among MSPs.

But if you look at the ones that are really loved by, the ones that kind of inspire fanatical fandom basically. They’re the ones who demonstrate in everything they do, big things, small things, a genuine, not a lip service, but a genuine commitment to doing right by their partners.

And that extends from the basics like support and how responsive they are and how helpful they are how responsive and helpful are they on billing disputes and and things like that. But just also the, the smaller things as well where there’s some relationship value they’re helping you out on the little things in a way that tells you these guys, genuinely give a darn about me and the success of my business and people feel that MSPs feel that they know the difference between a company that just has the right pieces and parts in place there and a company.

That has a truly kind of an embedded culture of of supporting and helping MSPs grow. And so on the vendor side, it’s the companies that have been especially good at that I’ll go ahead and name two really obvious candidates Pax8 and Datto come to mind just huge success stories in recent years.

And there’s a reason they have a lot of raving fans is they do [01:00:00] more than add the kind of traditional value that good vendors add and people can feel that feel that love and feel that commitment in a way that inspires loyalty. Partner first philosophy. I love it.

Erick: And Eric, as we look, towards the future, the evolution of MSPs and the vendors that serve them, what is the one thing that you would tell each group in terms of what they need to be looking forward to and evolving towards as MSPs and as vendors? Wow. That’s a great question, Eric.

Only one thing. One thing only. Reminds me of the hunt for Red October. When Sean Connery tells Vasily is trying to communicate with the American sub. And he’s give me a ping Vasily, one ping only. So anyway, a little fun there. I think it’s the open approach or the open Ness you having collaborative conversations that can be, that can be direct, that can be difficult.

At times, and I think that, the on the vendor side, some of the vendors that we work with that are, entering the market, we advise them to create early adopter programs stand up some partner advisory councils or boards, right to get the DNA and the feedback and the perspective and the likes and gripes and dislikes of, a constituency of that represents.

The channel partners that they would like to build their programs with and have a voice and not just do it because it’s a checklist thing, but to really, like you were talking about rich the vendors that get it, and they listen and they invite that, that sometimes hard to hear criticism, but take that feedback and have it influence product roadmap, strategy, things that need to be fixed.

And those partners become your greatest advocates. These are the folks that create this fandom and are the tip of the spear for that. And then on the MSP side, look for opportunities to engage with vendors that have this ability. And don’t just sit on the sidelines. If you feel like this is, boy this vendor could be a great vendor if they just did these couple of things.

Step up and participate and ask to either be invited for a position, or if they don’t have it, lobby for them, create a partner advisory council, listen to the partners, create some focus groups, do some peer group stuff. We want to, we see the value, but it takes both parties who want to do that.

It can’t be one sided. We, it takes, we’re all in this channel together. And I think, we can’t just ask, and then get upset when we don’t get what we want from a vendor or from an MSP, we have to collaborate together and see it for what it is. We’re all going to be here, for a long time.

And the vendors and the partners that see it that way and see it as a collaborative learning opportunity and experience, like you were saying, rich, we’ll be the most successful together. But it takes somebody to start that. I don’t know what the chicken or egg thing, but together, the best relationships I’ve seen have included, that opportunity.

Yeah. I think you probably said it best in terms of you have to be proactive at the relationship and that goes for the MSP or the vendor. It doesn’t matter who starts first. It’s everybody’s responsibility to try and start first and create those meaningful relationships. Okay. Rich, Eric, thank you so much for being here today.

I really do appreciate it and hope to see you on one sometime soon.

Rich: Absolutely, a total blast for us as well. For the folks who have been enjoying this conversation on the MSP chat side, Eric and I are going to take a break. When we come back on the other side, we’ll share some final thoughts about this great conversation with Eric Anthony, wrap up the show for you.

But until then, Eric, thank you so much for inviting us on the first episode of your brand new podcast. I am going to rape you. Reviews, subscribe everywhere I can and and be a regular part of your audience. Thank you both. We’ll see you around the channel

All right, ladies and gentlemen, welcome back to part three of this episode of the msp chat podcast a historic first for us here at msp chat, eric a live simulcast on another podcast. We thank eric for agreeing to do this with us He was in [01:05:00] fact very enthusiastic about it when he and I came up with with this idea on the sidelines of a CompTIA event recently and it was just crazy enough to work, we thought, and sure enough it it did.

Congratulations again to him for this new show that he has started. And yeah just lots of food for thought in that conversation there in terms of how the channel is always evolving. The IT industry and technology is always evolving, but there, there are things changing in the way that MSPs go to market and vendors go to market that have implications for how MSPs work with their vendors.

And that to me was what was especially interesting about where that conversation took us, Eric.

Erick: Yeah, it’s it was a great experience, a great conversation. I look forward to doing more of those types of. What do we call those little pop up podcast within a podcast shared simulcast thing.

Very fun. And Eric, of course, a recovering MSP like me, we could go for days, which as you saw, we started going quite a, quite deeply into this very timely topic about, vendors and MSPs and we got into sprawl and we got into, best practices and hopes and dreams. And at the end of it, Rich, it just, again, just solidifies for me the importance of making sure that we are both participating as good strategic partners, MSPs and their vendors, in order to get the best out of those relationships.

And so I really enjoyed the conversation.

Rich: Me as well. We hope you enjoyed it as much as we did. Folks it leaves us. With time for just one last thing here, and I’m sure you all, you’re all familiar with the concept of the fat finger mistake and the land of computers. I got the ultimate one for you here, Eric.

This is something else. Took place in the UK, in London not too long ago. An attorney there went online to a court website to finalize the divorce of of one of the law firm’s clients. Unfortunately, this particular attorney went into the wrong client file. So instead of going into the file of this couple that had decided to finalize their divorce he or she went into a file Belonging to a couple that had separated, but had not actually decided whether or not they would be divorcing.

And he went ahead and finalized their divorce by mistake, thinking he or she was doing it for somebody else. Now within a day or two, the law firm figured out that they had made this unfortunate mistake. They went to the court and said, hey, this was a mistake. We went into the wrong file.

Can you just undo this? And the judge said, no, we cannot as a matter of fact in fact, the statement was, quote, there is a strong public policy interest in respecting the certainty and finality that flows from a final divorce order and maintaining the status quo that it has established. Basically from the court standpoint, you don’t want to open up a door, you don’t want to suggest there might be wiggle room when you say Divorce is final is final.

And so this divorce is final too. And now this couple is, going to have to decide whether to just stay divorced or get remarried.

Erick: So Reg, just listening to it, the word that comes to mind is whoopsie. Holy cow. I wonder what happened to that. That the person on, at that law firm that made that mistake.

At the very least, I would suspect that the law firm would do everything in their power to, Okay, we’re going to get you remarried and we’ll cover all the legal fees and all that if you do decide to stay together. But, hey, might be an opportunity for the couple to, rethink it if they were already getting separated.

Sometimes the toughest decision is to, to make that final decision, right? Rich, we’ve heard people that have been separated and we’re gonna, should have been divorced many years ago and just never made it happen. So I don’t know. It’s not an ideal situation for anyone in this case, I don’t think.

Rich: I would certainly like to think the law firm did not bill the client for their time on these particular services. So that would be bad. Yeah,

Erick: that, that would have been wrong.

Rich: All right, folks that is all the time we’ve got for you on this episode of MSP chat. We thank you very much for joining us.

We’re going to be back again in a week with another episode for you. Until then, if you are watching us on YouTube, but you’re into audio podcasts, go to wherever it is you get audio podcasts. You’re going to find MSP chat there. Conversely, if you’re listening to us on audio, but you’d be curious to check us out on YouTube.

Go on to YouTube, look up MSP Chat, you’ll find us there too. Wherever it is you are consuming this fine content, please subscribe, rate, review, it’s gonna help other folks find and enjoy the program too. This show is produced by the great Russ Johns, who is Part of the team with us here at Channel Master, he can produce a show for you too.

If you’d like to, you wanna learn more [01:10:00] about Russ and how he can help you, and in fact about everything that channel mastered can do for you, go to www.channel master.com. Channel Master sister company is called MSP Mastered and that is where Eric can help you optimize and grow your managed services practice.

You’ll find information about them. MSP mastered. com. MSP mastered is one word. So once again, thank you folks for joining us. We’re going to see you on the next episode of the show. Until then, please remember you can’t spell channel without M S P.