My last post began a case study exploration of Valley Business Solutions (VBS), an ADTRAN customer based in Tennessee. Normally the focus of a case study is about how a vendor solved a particular problem for a customer, but my research indicates something bigger going on. There was a case study element in that post, but I want discuss more about how ProCloud provided a transformational opportunity for VBS, and why this serves as a great model for other channel partners to consider.
This also speaks to where ADTRAN is having success and how the broader communications environment continues to evolve. While UC may have been the starting point for how vendors and channels jointly explore new directions, both parties have to follow the wind. Ultimately, the end customer determines this, but many have little of sense of direction. This is where channels truly add value, as they are the middleman between vendors and businesses.
Why being an MSP is good for VBS
Valley Business Solutions knows what’s best for its customers – at least in terms of communications technology, and for a variety of reasons, they have determined that the Managed Services Provider path is the way forward. This is not an easy decision to make, and I’ll explore that further in my next post. For now, the idea is to determine the best way to remain relevant with as many customers as possible. To some extent, VBS has based this on customer input, but this can also lead to some dangerous assumptions.
Part of knowing your customer is knowing that they don’t always know best. Most of VBS’s customers are SMBs with limited technical expertise, and their scope of understanding will define their thinking. VBS has learned that a key way to add value is to re-frame technology needs around business problems, and this has allowed them to have success with ProCloud managed WiFi services. Businesses don’t generally come to channel partners asking for UC, and they may not even come asking for WiFi solutions. They just know that wireless growth is out of control but don’t really know how to address it.
This is where channel partners like VBS add value. They know the customer well, including their understanding of these problems. Since they are well-versed in what ProCloud can provide, they can introduce new ideas and capabilities that show how the customer can get on top of these wireless issues. This approach is known as consultative selling, and VBS recognized they needed to work this way, not just to keep customers happy but also to stay ahead of their competitors.
By adopting this model, VBS moves away from the legacy model of selling hardware and adding little value. The customer relationship is still paramount, but with all the disruption coming from both the cloud and mobility, there was little room for growth by sticking with that legacy model. This means that the core value proposition is based less now on the physical products and more on the applications they enable and how those applications impact the business.
That’s the new value proposition that has led VBS to becoming an MSP. With this model, they are free to frame ADTRAN’s technology in terms of business solutions and outcomes. Their value now comes from the trust based a strong/long customer relationship, and from that, an ability to understand what customers truly need – rather than what they think they need. I’ll provide specific examples in my next post along with the business model benefits for being an MSP.
Why being an MSP is good for ADTRAN
This path is also good business for ADTRAN, and that needs to be part of the analysis. Of course, this result applies to any vendor, and hopefully you’ll see this isn’t just about ADTRAN and ProCloud. Vendors face the same business issues as channels, and being on the same page is key for survival. ADTRAN acquired BlueSocket and developed ProCloud to stay current with the mobility and cloud trends, and to make these work, they must have the right channel partners. Other vendors have made similar moves for the same reasons, so this shift isn’t specific to ADTRAN.
The MSP business model isn’t as capital intensive as selling hardware, but ADTRAN knows this is where the growth lies. When channel partners embrace MSP, they get a nice re-set with their customers and that positions them to drive new revenues as new applications enter the ProCloud sphere. This is a model that works well on a few levels for end customers, and will filter back to the vendor because they now have an engaged user base around which to develop new applications and grow the business. There’s definitely a virtuous circle at work here, and the best way to get it is for both vendors and channel partners to be aligned with meeting customer needs.