Guest Column | January 26, 2023

Platform Neutrality Provides Needed Leverage To Channel Partners

By Brian Laufer, QuoteWerks


MSPs thrive on creativity and choice. Many providers pride themselves on developing customizable offerings and connecting various solutions with their own “special sauce.” No two businesses are the same – including IT services firms and their clients – so MSPs typically seek vendor partners that offer flexible platforms with open integration communities. The channel thrives when providers can select the proper solution for themselves and their clients.

In an era of proprietary platforms and multi-year contract requirements, it’s incredibly easy for MSPs to lose their independence and ability to customize their offerings. While many vendors market the simplicity of these systems, and there are advantages to that approach, their investments in outside integrations and relationships with other channel companies tend to suffer. API development to link tools and platforms from different vendors can take a back seat to internal stakeholder demands.

How does that help MSPs and VARs differentiate their businesses and best support their client's needs? With fewer options at their disposal, providers can lose their ability to customize their offerings, programs, and internal operations.

As mergers and acquisitions become a daily occurrence in the channel and industry consolidation disrupts time-tested alliances and partnerships, IT services companies have less freedom of choice. Providers are increasingly being pressured to pick sides and align more of their businesses with a single vendor's practices and pricing structure.

As recent events show, especially with “loyalty requirements” and integration limitations, that all-in-on-one-supplier strategy can be a major disadvantage for MSPs and the disparate collection of businesses they support.

Which Side Does Consolidation Help More?

An optimal vendor platform that aligns with an IT services company’s technology stack, pricing, and integration strategies can create greater operational efficiencies and reduce management expenses. The question is to what extent the loss of control and margins offsets those savings. Every owner needs to individually assess these technology alliances' pluses and minuses.  

For example, with fewer vendor relationships to manage, can the MSP use that time effectively to drive more revenue with prospects and existing clients? Will the single platform help drive new opportunities or limit the options to land new business?   

Standardization can help streamline implementations and system management and lower the technology learning curves for technicians and other staff members. And on the business side, leveraging fewer vendors will typically reduce the volume of invoices and limit the time admins spend fielding support requests.

While minimizing platforms can remove some of the complexities of running an IT services business, there are sacrifices to be made for this approach. Every MSP needs to assess whether those benefits outweigh the solutions freedom and pricing flexibility they give up in return.         

Platform Freedom Is An Enabler   

One major downside of “going all in” on a select set of vendors is the loss of flexibility. IT services companies support many different businesses with diverse and continually shifting needs – requiring periodic changes and adjustments.

Locking into a small set of vendors limits those options. The provider community prides itself on finding the best solutions for each particular situation, so losing even some of that flexibility due to a stronger third-party alliance can force ITSPs to compromise their standards. One suite of services might be a good fit for some clients and not for others.

There are relatively few “one-size-fits-all” solutions in IT. Most new clients come to their provider with existing infrastructure, from devices and networks to all the various applications they use to run their business. Unless it’s a brand-new company, ITSPs typically tailor their management tools and platforms to support those collective environments without creating major disruptions on either side. A vendor-agnostic approach allows providers to implement the best solution for each situation.

While MSPs and VARs naturally gravitate to certain tools based on experience and training, having the flexibility to bring in new technologies that boost the customer experience is invaluable. Ensuring high client satisfaction and retention are top priorities for every business.

Cost Control Vs. Higher Profit Potential

Margin control may not be top of mind when selecting vendors, but ITSPs that leverage one source for most of their service offerings lose the power of competition. The ability to walk away from contracts that lock businesses into long-term commitments allows providers to negotiate better deals and shift portfolios when it makes sense.

Depending heavily on a single platform also makes it harder to walk away. The more ingrained ITSPs are with one vendor, the more disruptive the transitions can be to a new supplier – especially when cybersecurity is a major component. An embedded platform creates pricing leverage. In those situations, providers must carefully assess the cost-benefit ratio of moving away from a deep-seated, long-standing technology commitment. The vendor has more control and a greater ability to raise prices on their partners and end-clients.

That doesn’t mean they will. Many channel vendors are conscientious, understand their influence on partners’ business models, and work to maintain mutually beneficial and trusted relationships. However, with the rise in venture capital investments and public offerings, some companies may not have ITSPs’ best interests in mind when making strategic program changes − including pricing.          

Working with platform-agnostic vendors keeps providers in the driver’s seat. These focused suppliers understand their role in the IT services community and how changes like pricing and contract commitments can affect their partners’ business models. Control remains in the hands of VARs, MSPs, and solutions providers, and that’s good for the industry and all those who rely on their support.

About The Author

Brian Laufer is Vice President of QuoteWerks.