We ask leading print vendors and resellers for their thoughts on the wider adoption of cloud managed services, the case for
outsourcing to third parties and whether there are any associated risks
PART 1: THE VENDORS’ PERSPECTIVE
Do you see the wider adoption of cloud managed services by businesses as an opportunity for channel partners to secure a new recurring revenue stream and increase their stickiness with customers?
Pete Munday, Global Experiential Solutions Marketing Manager, Xerox: “Yes. And to help, Xerox ConnectKeyenabled MFPs can be cloud-connected and have the ability to create customised cloud connectors through software platforms such as Xerox App Studio.
“We also offer a range of solutions that partners can sell to help their customers utilise the cloud platform even further, such as Xerox Mobile Print Cloud, Cloud Fax solutions and more.”
Paul Gaiser, Director MPS, Channel Partner Operations, Xerox: “Managed print services is another offering that can be delivered from the cloud, decreasing the need for specific MPS developments or tool integrations by channel partners delivering a professional MPS service to their customers, enabled by a large MPS provider, such as Xerox.”
Paul Young, Head of Technical Services, UTAX: “The opportunity for resellers who think beyond simply shifting boxes is huge and continues to grow. Organisations are looking for cloud-based solutions that streamline operations, control costs, improve employee productivity, secure data and improve efficiency while protecting intellectual property.
“We’re constantly working with our channel partners to deliver solutions that drive positive change within a business. This does have the benefit of generating recurring revenue, but it also positions those partners as trusted advisors to whom decision-makers will return when they have additional needs.
“Stickiness also comes from ensuring the relationship between reseller and end-user, as well as that between reseller and managed service provider, is on-going. It’s not good enough to roll-out a solution and then walk away until it’s time to renew the contract. Nurture that business and continue to deliver enhancements to the organisation and the relationship can last for as long as you want it to.”
Chris Hale, Solutions Product Marketing Manager, Sharp UK: “Very much so. Sharp is keen to see our partners improving customers’ business processes through use of our umbrella of service and product offerings, all of which optimise collaborative requirements and provide more instant access to data.
“This is important when thinking of new revenue streams, as it’s expected by the growing number of millennials in the workplace. We recently introduced the Sharp Integrated Technology Programme, focused especially on cloud collaboration to meet the appetite among Sharp partners for more meaningful, solutions-orientated approaches when engaging with their customers.”
Jeremy Spencer, Marketing Director, Toshiba: “We see cloud services and solutions becoming a key part of MPS development in 2016. Companies are looking to outsourcing and supplier rationalisation as they seek to become more efficient. So, yes, you could argue that MPS demand will grow, but whether it will look and feel like the managed print services we have been delivering across the last five years remains to be seen.
“I suspect channel partners will encourage a stronger degree of integration with other solutions, software and platforms, with companies that can cope with this demand growing their MPS share sustainably.”
Have you seen many partners upskill so they have the necessary inhouse expertise to support clients’ cloud migration plans and manage their IT infrastructure, or are they outsourcing to a specialist IT support partner?
Pete Munday: “Yes. Many partners are re-skilling to use basic tools such as Xerox App Studio to create cloud connectors or to better understand and utilise the Xerox App Gallery ‘ready to use’ apps (such as document translation, digital fax, document repurposing and storage) that connect into cloud services from our alliance partners.
“In 2015 we launched a programme call ‘Personalised Application Builder’ (PAB) where partners have the opportunity to download and use the Xerox Software Development Kit (SDK), enabling them to create new and unique applications for their customers. We are finding they are using existing resources in-house but retraining them to be able to use the SDK.”
Paul Gaiser: “In relation to underlying managed print services, many channel partners have upskilled to be able to offer these cloud-based services to their customers. These partners have adopted a less product-focused culture by offering MPS and even in a multi-brand fleet environment. A professional MPS provider behind the channel partner, in our view, must offer an accreditation and certification programme that ensures partners are upskilled to the required level.”
Paul Young: “While some resellers have taken the decision to acquire skills and infrastructure through acquisition, UTAX has witnessed many more tapping into the support provided by partners. Smart resellers are taking the no-risk option of working closely with vendor partners who can assist at every step of the sales and implementation process. This is growing in importance as cloud-based services become highly tailored, supremely technical and, crucially, increasingly fastpaced. Two and even three heads can definitely be better than one!
“The lines between sales and customer service continue to blur and we’re enjoying phenomenal success via our solutions team which assists partners deliver managed solutions from the start of the sales process and right through the ongoing relationship. In addition to providing specialist installation service and assistance, we support our partners with market insight, in-depth product knowledge and an understanding of the needs of specific verticals. Selling is therefore much more collaborative and all parties work closely to bring together solutions that deliver real results to the end user… on an ongoing basis.
“As first and even second generation MPS contracts mature, organisations are looking to build on what they’ve got and take it further. Cloud print and storage, the ability to access, edit and share documents on multiple devices anywhere at any time and security-controlled access bring huge benefits across just about every vertical market you can think of.”
Chris Hale: “We see a mixture of approaches but I cannot say any one is particularly dominating. Certainly, someof our business partners are skilling-up to better support customers from within their own operations. Bringing these skills in-house will benefit the channel in the longer term as their offering will be more meaningful and relevant, allowing them to maintain a competitive edge.
“This ‘one-stop-shop’ approach provides customers with the operational benefits of a more complete service and the channel with the ability to reap rewards from the revenues generated.”
Jeremy Spencer: “We have seen both up-skilling and outsourcing within our partner channel. Those who have adopted cloud solutions early on and those with an IT integration background have been taking steps to provide support for integration to the cloud.”
Outsourcing to a third-party potentially has associated risks. What advice would you give to partners?
Pete Munday: “We find customers are already deciding to move essential business systems or services to the cloud. Our partners need to be aware that the transition is happening and have a great opportunity to better understand their customers’ business requirements and offer ways to connect their MFPs to these services. At the same time, they could look for, or introduce, new service opportunities that customers may not be aware of that make MFPs even more valuable to their business.
“Our advice would be to reach out to each customer and ask the question about the cloud. We have a number of unique offerings that already help to differentiate partners from the competition by offering true value-add, with customised solutions that meet their customers’ needs better than off-the-shelf solutions. Xerox ConnectKey-enabled devices also come with a host of security features, including built-in McAfee ‘White-listing’ technology, that help to protect customers’ data when connecting to systems beyond their business firewall. All of these offerings should give our partners the confidence to work with their customers and help them with their transition to the cloud.”
Paul Gaiser: “For Xerox’s cloud managed print services, the key to our partners’ success has been our extensive training programme that trains partners’ MPS specialists in a consultative approach, starting with an assessment of a customer’s business requirements and the extent to which the current fleet and services meet those objectives, before coming to a redesign and implementation of the outsourced situation. In this way the cloud offering has enabled the channel partner to be more customer-focused rather than less!”
Paul Young: “Resellers need to think very carefully before they outsource anything and consider the long-term benefits ahead of any short-term gain. In our opinion, there’s a real issue surrounding resellers losing their customers to service providers and all too often we see resellers leading a customer to a service provider, receiving a finder’s fee, but then losing that customer and the future revenue that goes with them. There’s also a problem with certain providers subsequently targeting reseller customers via their direct sales teams.
“That wouldn’t be the case with UTAX as we would never let that happen. We’re a partner in the truest sense and let dealers do what they’re good at, which is talking and selling to their customers, while we take care of the technical support behind the scenes. The solutions team works for our partners, adding strings to their bow. By satisfying the needs of our partners’ customers, our partners achieve customer retention from which we all benefit. It’s a perfect circle. There’s no need for resellers to outsource as such, and certainly no need for resellers to lose control of their customers.”
Jeremy Spencer: “Working with providers to migrate to the cloud requires open discussion and clear communication of targets and intended use to ensure that any solution meets the requirements of your business. You should never forget that you are the customer.”
PART 2: THE RESELLERS’ PERSPECTIVE
Do you see cloud managed services as an opportunity to secure a new recurring revenue stream and increase your stickiness with customers?
Terry Storrar, IT Services Director, Annodata: “Cloud is a big focus for Annodata and is a core part of our corporate strategy. While cloud does increase stickiness with customers, for us it’s more about enabling our customers to consume IT in the ways they want. “Across our whole industry we are seeing demand for IT-as-a-Service increasing rapidly, and that will only continue. At the same time, many customers are still looking for more traditional options. It’s critical that we can offer both.
“Today’s world is about providing customers with the best fit for their business and offering solutions that allow them to maximise their potential. Technology is an enabler and the potential benefits for customers are endless with the best-fit solutions.”
Mark Smyth, Operations Director, Vision: “Vision is driving solutions sales as part of its managed printing and document solutions, combining additional services and platforms that are strong value adds. These are typically workflow and capture solutions and mobile printing. It is a significant shift and change to start to capture recurring revenues from cloud applications. We are starting to see cloud hosting become more readily accepted and the whole SaaS model and adoption levels increase.”
Colin Griffin, Managing Director, Blackbox Solutions: “We see the adoption of cloud managed services as critical to the continued growth and success of our business. Our IT division is a recent initiative and the new capabilities have significantly improved the range of services we can offer to customers, opening up many new business opportunities.
“Nearly 40% of Blackbox Solutions’ existing document solutions client base has gone on to purchase IT support services, which has strengthened our relationship with these customers, while providing an additional source of revenue. Thanks to our new data centre we’re well placed to provide clients with cloud storage and disaster recovery support.
“Alongside our existing document solutions services, the opportunity to offer cloud managed services means we can provide customers with a comprehensive one-stop-shop for all their print, copy, IT and telecoms, which means they can get all the support they need from one trusted supplier.”
Have you upskilled your team so you have the necessary in-house expertise to support your clients’ cloud migration plans and manage their IT infrastructure? If not, do you intend to do so in the future?
Terry Storrar: “We inherited a great deal of cloud knowledge and expertise when we acquired Keltec back in 2014 and since that time have invested heavily in our staff to ensure they have the skills to sell cloud services and support them. Cloud has been around for a long time now and the principles of what we are providing haven’t changed, but the diverse ways in which we now provide them have.”
Mark Smyth: “In June 2015, Vision formed its enterprise services team, which combines a number of services including audit discovery and design and pre- and post-sales support of Vision’s solutions offering.
“That is now helping to shape client solutions and provides consultancy, implementation and support. This has resulted in a number of new additions to the team and the requirement to continuously train and develop new skills and increase product knowledge. “What’s essential is having a training plan and then driving the team to embark on and play an active part in training. It’s a big commitment for everyone!”
Colin Griffin: “Our new IT division has required a considerable investment in additional staff. So far we’ve taken on five staff, including a specialist IT Manager who heads up the new division. Given the high demand for cloud services, we expect to create at least four further jobs in the IT division over the coming months.”
Have you considered, or would you consider, outsourcing to a specialist IT support partner?
Terry Storrar: “We recognise that as a company we don’t always have all the answers to our clients’ problems and from time to time need to bring in specialist third parties. Fortunately, as a vendoragnostic reseller, we are free to work with whomever we like. During our 28-year history we have built up a wide network of trusted partners we can turn to so that we can better support our clients. Choosing the right partners that fit, not just from a technical standpoint but also from a cultural standpoint, is very important to us.”
Mark Smyth: “Outsourcing always remains a consideration. Many of our vendor partners provide support that is very helpful in the early stages, especially when launching a new solution. However, there are major benefits in being selfsufficient and that’s our constant aim and objective. Yet it comes at a cost and requires significant investment.”
Colin Griffin: “A key driver influencing our decision to establish an in-house IT division was that we were regularly working with third-party companies when it came to providing IT hardware and support for our clients. The whole purpose of setting up the new department was to bring the provision of these services inhouse and secure a piece of the ‘IT pie’.
“We generally work for SMEs across London and the South East. At present we try to deliver IT services using our own team, but it’s possible we’d consider using specialist partners for large-scale projects. This would be judged on a case by case basis.”
How have you/would you negate any risks associated with outsourcing service provision? For example, a partner may not fully understand your clients’ business and requirements or the service delivery may not be up to standard.
Terry Storrar: “Annodata has built its reputation on customer service and the highest standards of service delivery and, as part of that, we maintain a continuous feedback loop with our customers. As and when we outsource to third parties, we keep a very close eye on activity to ensure the work carried out is up to standard.
“Although we use third-party providers for certain aspects of a project, we always maintain management and ownership of the entire process. If anything does go awry, we are in a position to act quickly to rectify things. The risks are minimal.”
Mark Smyth: “If you do outsource support then it’s vital and absolutely essential you choose carefully and evaluate a provider’s capabilities to ensure they are suitable to become one of your preferred partners. Then, each and every opportunity must be comprehensively scoped so the partner knows precisely what’s required – what the aims and objectives are, as well as the deliverables. Once scoped, you have a blueprint to work to and some measurement. It’s really back to basics with ‘what you can measure, you can manage’.”
Colin Griffin: “In many cases, we’re providing managed cloud services and IT support to customers we’ve worked with for years. We’ve taken the time to build and maintain these relationships, which are extremely important to us, and if we couldn’t guarantee that a third-party provider would offer clients the same high standards, then we’d almost certainly forgo the IT project rather than jeopardise our relationship with a loyal customer.”
Is there a risk you could lose a client to a third-party MSP? And have you ever lost a client this way?
Terry Storrar: “We face fierce competition in our industry, so there’s always a risk that a client will go elsewhere, and while it might happen, I can’t think of an example.
“Over the past few years, we’ve taken steps to branch out from our heritage as a pure-play print provider and moved into delivering a broader range of IT, cloud and communications services. That means we are able to take on more of our clients’ IT estates, allowing them to streamline the number of suppliers they work with and enabling us to develop deeper engagements with them.
“You can never guarantee that you will not lose a client, but you can mitigate the chance of this happening by providing a quality service, added value and transparent communications at all times.”
Mark Smyth: “Setting up the right partner and engagement with clear, concise rules will help avoid potential risks and client vulnerability. However, you must always fully understand who is responsible and accountable for delivering the services and support, even if the partner has a reseller-only route to market and does not engage with end users.”
Colin Griffin: “As we’re a relatively small operator, we’re able to provide a personalised service to our customers. It’s extremely rare that we lose custom; we’ve probably lost fewer than five accounts over the past three years. However, our clients are all businesses and ultimately if another supplier can provide the same services at a reduced cost then they’re liable to switch. Our job is to keep clients happy with our customer service levels and costs so they don’t feel the need to look elsewhere.”