The coming of the Strategic Service Provider

Orange County, CA - Robert Faletra, CEO of The Channel Company, which publishes CRN, said the evolution toward the Strategic Service Provider model marks the fourth major shift in channel nomenclature since the publication's founding in 1982. When the channel was born its constituents were known as Resellers, a business model CRN declared essentially dead in 1990 in favor of VARs (value-added resellers). VARs evolved into Solution Providers, a term that incorporates both Managed Service Providers (MSPs) and Cloud Service Providers (CSPs). And now CRN heralds the dawn of the Strategic Service Provider era.”

That is what Steven Burke wrote recently in a story titled, The New Channel Model: Rise Of The Strategic Service Provider.

What is the “channel” and who is CRN? The channel is a term coined long ago by the folks at computer industry publication CRN back in the early 1980s when they were known as Computer Reseller News. The channel, as it is known, is the group of players that brings to you, the end-user, all the PCs, servers, monitors, Microsoft Windows, Adobe products, network cables, printers, scanners, et al that you buy constantly. The channel is your computer dealer and the distribution channel behind them.

Burke continues to write that the channel as we have known it is dead. The new game changing entities are the Strategic Service Provider. He writes on with, “Faletra said the new model is an "aspirational" evolution from the solution provider model that has dominated the landscape for the past two decades. But more importantly, the Strategic Service Provider paradigm shift is the most dramatic change yet in the channel landscape…. The channel is once again moving higher up the IT ladder, this time establishing deep strategic ties throughout the organization starting with CEOs, CIOs, CSOs and CMOs running through each and every critical line of business," Faletra said. "This transformation is all about delivering strategic business gains for customers that are digitally transforming their business…."

Burke says the new players need to have “strong business acumen and an uncanny ability to translate business knowledge into competitive advantage.” In years past the CEO or CFO wanted me or someone else at Alvaka Networks to keep them abreast of the newest technologies. Some would tell me they wanted to meet a few times a year for a briefing. When I got those meetings they would tell me at the end how valuable the information is. Those executives often did not want to get caught uninformed when being quizzed by their board members, partners or other execs. What Burke is saying is that the team at Alvaka Networks now needs to not only bring the technologies to you for you to decide what to do with them, but we need to bring a whole context to what can be done with the technology and its application that is unique in its ability to transform your business.

The story goes on to quote Rauline Ochs, a channel strategist for The Channel Company's IPED Channel Research Consulting & Training business saying "Three years from now, those who are going to survive will be having more strategic business value conversations rather than procurement conversations." The story goes on to say “That ability to act as an independent, agnostic provider that can sift through conflicting vendor claims and deliver highly repeatable and predictable time-to-value is paramount in the Strategic Service Provider era…. That role is more important than ever…. There is more of a need for that today because things are changing so rapidly, and there are so many different options for customers to solve their problems or drive their IT initiatives."

Alvaka Networks for more than 12 years has not been reselling hardware and software. I felt back then that when we made a recommendation to a client to buy a new server and storage area network system that to tell them to flip to the next page for the $80,000 quote to be a conflict of interest. Sometimes I swoon with envy when I see a client cut a $700,000 purchase order to buy products, but an agnostic non-reseller is the business model we have chosen. We do get benefits from our chosen model at Alvaka Networks. Not reselling products has forced us to become much of the Strategic Service Provider Stephen Burke is writing about. But we have much more to do to live up to the trait he identifies as strong business acumen and an uncanny ability to translate business knowledge into competitive advantage.”

I am curious to hear what you, our clients think about the rise of the SSP and how Alvaka Networks needs to evolve over the next few years to meet that challenge and your needs. toli@alvaka.net