2112Group Reports

"2112Group Reports" is a series of blogs produced by The 2112 Group and published exclusively to the Intronis Cloud Backup and Recovery blog, offering insights on business and technology trends in the channel. Visit The 2112 Group on the web at www.the2112group.com and www.channelnomics.com. Follow them on Twitter @the2112group and @channelnomics.
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Recent Posts

How much is too much? The growing value of professional services

Posted by 2112Group Reports on Apr 23, 2014 1:00:00 PM

Professional services are undeniably important to the channel. To solution providers, these high-touch, high-value services offer the highest margins and best profits, and can offset the costs and narrow margins of traditional product sales.

Professional services is the central way partners define value to their customers – and therein lies the rub.

In a recent research project by The 2112 Group and technology distributor Ingram Micro, we found that solution providers may be leaning on the formidable merits of the professional services model to a fault.

Our Driving Growth Through Partnership in Professional Services report finds many partners are so intent on the delivery of professional services to reinforce the value customers perceive that they overlook opportunities to expand their engagements, reduce costs and increase revenue.

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Topics: Professional Services

Data Point: The power of multiples in channel sales

Posted by 2112Group Reports on Apr 9, 2014 1:05:00 PM

We often harp on the need for solution providers to develop and market honest-to-goodness solutions sets that target real business outcomes as opposed to one-off transactions that do little to add value to the client relationship or the partner’s bottom line.

When we look at the numbers related to the relative complexity of individual channel deals, it’s apparent the proclivity for technology solution sets is real and the concept of packaged solutions is gaining traction.

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Topics: IT Services Trends

Dance with the one who brought you: The power of existing relationships

Posted by 2112Group Reports on Apr 2, 2014 11:05:00 AM

We’ve long held to the premise that, in addition to adding new accounts, the success of services businesses is predicated on the uninterrupted stream of recurring revenue from existing accounts. In the services model, the only way recurring revenue flows in a positive direction is through the management of account attrition volume and a focus on horizontal sales.

That concept got some additional support recently from the savvy business minds at Gartner, who are encouraging B2B technology service providers to focus less on net-new account acquisitions and more on the predictable and higher-margin exercise of renewals and additional sales to the existing client base.

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Topics: Customer Management

Good things happen when IT spreads across organizations

Posted by 2112Group Reports on Mar 26, 2014 11:05:00 AM

Much has been written about the transformation of IT from simple technology to businesses processes. While enticing on an academic level, the message hits home when we see it in the real spending and hiring habits of business decision-makers.

A recent survey by the professional services firm BDO USA shows technology CFOs are as optimistic as ever about hiring and spending, with 91 percent saying they expect to add capabilities in Big Data, cloud computing and security.

That meshes with U.S. Bureau of Labor Statistics data showing a forecasted increase in employment in all IT fields of 22 percent by 2020. It is, however, at odds with other IT job counters like Janco and The Hackett Group, which have kicked off 2014 with a bleak outlook for IT jobs, which usually corresponds to channel IT services spending since they are driven by similar forces.

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Topics: IT Services Trends

Data Point: Plenty of meat on the managed security bone

Posted by 2112Group Reports on Mar 19, 2014 11:05:00 AM

Managed security may be near ubiquity in managed services, but the space remains far from commoditization, with industry analysts predicting double-digit annual growth and ample opportunity for early adopters and new entrants.

Transparency Market Research estimates the managed security services market will top $24 billion by 2019, rising 15.4 percent annually thanks to an increase in demand for network security and confidentiality services.

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Topics: IT Services Trends

Don’t let today’s tech dream be tomorrow’s security nightmare

Posted by 2112Group Reports on Mar 12, 2014 11:05:00 AM

It’s hard to find a disparaging word for business technologies like cloud computing and mobility that promise better functionality, improved productivity and lower costs. However, the benefits of cloud and BYOD initiatives come with security and compliance challenges that need to be addressed before implementation can be successful.

Unfortunately, due diligence doesn’t always come bundled with irrational exuberance. New research shows businesses are diving headlong into cloud and mobility while ignoring risks and leaving themselves open to fraud, theft and privacy breaches.

That’s a problem and an opportunity for partners with an interest in the adoption of trending technology sets and a responsibility to upsell clients on the appropriate measures to safeguard their wares and capabilities.

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Topics: Customer Management

Data point: 37 Percent of partners report high competition

Posted by 2112Group Reports on Feb 19, 2014 11:10:00 AM

Everyone who works in and around the technology channel knows it can be a tough environment in which to make a living, especially from a competitive perspective. While the channel population may be shrinking and the dynamics changing, partners still need to be fully prepared to grow and sustain their businesses under ever-present competitive pressure.

According to The 2112 Group’s 2014 Channel Forecast: The Shrinking Channel study, 37 percent of solution providers report having at least seven or more direct competitors, and 27 percent report having more than 11 regular competitors. The vast majority say they compete with at least four IT channel companies on a regular basis. (See chart below, which shows the number of companies against which solution providers compete regularly).

While smaller solution providers have fewer regular rivals because of their more defined competitive sets, the overall implication is that channel competition levels are high even if solution providers have not been good judges of competition levels historically.

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Topics: Differentiation

Future focus: The art of selling your potential

Posted by 2112Group Reports on Feb 12, 2014 1:05:00 PM

There’s nothing like the confidence of marching into a prospective client’s office armed with a well-crafted proposal. You’ve got all the technical details of your offering down cold. Better yet, you’ve got a list of references from satisfied clients attesting to your ability to get the job done on time and on budget. What could go wrong?

Quite a bit, as it turns out. Your confidence, we regret to inform you, may be misplaced.

When it comes to shelling out actual money, buyers are more easily swayed by the potential for success than actual success. Let that sink in for a moment. It’s more about what they think you may be able to do and less about what you’ve already done.

This line of thinking is outlined in a joint study from Stanford and the Harvard Business School that found test subjects were willing to buy more – and spend more for – products and services that sound like they could be winners versus those with an established and winning track record.

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Topics: Sales Process

Sales at the speed of modern technology

Posted by 2112Group Reports on Feb 5, 2014 1:38:00 PM

Technology sales have always been a moving target. The hot device or application of today inevitably gets disrupted in favor of the innovation of tomorrow. That said, the traditional tech adoption cycles of yore were slower, more predictable, more manageable. Solution providers made a tidy living - sometimes for a decade or more - using the same model to deliver similar goods and services again and again.

That time is over.

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Topics: Sales Process

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