Coming IT Consolidation

Apparently something rubbed a few of you the wrong way so I figured I’d offer some perspective because I can’t reply to all the emails individually. In the last email I implied that the IT Solution Providers (my term for everything consulting / reselling / implementation related to IT) had the best year ever with most of the riffraff getting eliminated in the process and our best / most profitable years being behind us.

That makes no sense Vlad!!!

It does when you think about it.

In the 90’s SMB spent a lot of money to build networks. With them came IT guys and then IT departments.

In the 00’s SMB got tired of their IT guys and cut costs by outsourcing IT to MSPs, VARs and so on. Most skilled IT folks went out on their own and started IT companies.

In the late 00’s and early 10’s we’ve seen a huge move to the cloud. Yeah, I know, there are like 4 dudes doing REALLY great selling HP & Dell but everyone else (including the two companies) are struggling to keep it going.

Consolidation

SMB IT was established on the back of IT infrastructure.

It grew through outsourcing.

It grew through the cloud and acquisition of the smaller guys. As a matter of fact, most of your smaller IT guys that weren’t great at business are now working for my partners. I see a lot of people that I know.. now working for someone else I know.

Growth has been easy to come by.

So what’s next?

My crystal ball is still in the shop so I don’t know.. All I know is that you’ve got to stop digging your own grave by working with companies that are trying to eliminate you. Or continuing to “be busy” without regard for where your new opportunities come from.

Business as usual has to change. You have to be a little bit more than irrationally optimistic to think that the same kind of card stock crap marketing that made it last decade is going to work going forward. Or that you’re gonna tweet your way into a goldmine.

Fact is, the IT has lost both power and sex appeal. Best Buy has really lost the shine it had a decade ago. Look at your ugly Dell and HP laptop – it looks and weighs the same as it did a decade ago. People are buying tablets, smartphones come with 5” screens with the app sophistication, speed and simplicity we don’t have on desktops and the biggest IT concern these days is BYOD – not something new to buy or implement. Look at Windows 8, at $39 for the upgrade they can’t even give it away.

Like I said about 5 years ago or so, focus needs to be on services in the all-encompassing sense where everything is taken care of. While it’s true that there will be less and less people that find IT important, those that leverage it to it’s fullest extent (or comply with the regulatory requirements, etc) will become more and more open to additional services.

In short, the best years for some of us are still ahead of us. Unfortunately, most IT businesses will certainly not be around to see it. The difference is effort, right partnerships, right solutions and ability to implement as much technology as possible to make the business operate better thanks to technology – not to make technology a burden that they cannot live with out. It’s all about the strategy.

Listen, every year I talk to less and less partners about the new stuff we are doing and every year I hear the same deadend excuse – we’re swamped right now but we’ll look at it ____ later. People sacrifice long term corporate growth for the short term growth. While you will never, ever see me criticize the spirit of a hustler, if you’re constantly passing up strategic opportunities to become more relevant for quick cash now, the well will eventually dry up and you’ll be lucky to work somewhere else. 

We’ll be doing a big “2013 – Year Ahead” podcast next week if you’d like to know some specific details..

In the meantime, pimp on and keep on making that green. Thank you for your tremendous support of ExchangeDefender (and the Unicorn) and Shockey Monkey in 2012. We’re throwing more $ into R&D than ever so next year is gonna be even better!