James: So, going to talk about the changing industry today. It's a topic I love and live every day. And more and more partners are starting to see the real practical impacts to their businesses more and more day by day. And I feel like 2025 is going to be the catalyst year of where we're really going to see the changes and impacts.

And so, talking about this change but what actually is it? If I start with our historic setups we've had some different kinds of business models. It's been the MSP which the terminology gets thrown around a lot but the managed service provider, well that business really is all about end user support and infrastructure management.

Our history came from being that break fix shop, being that white night where small business technology wasn't that great and there some really highly technical people in the locations that could just jump in and help small business fix their problems, get it up and running. And then we, and we realized that we could fix prices and provide better outcomes for our clients. Now we've got the SIs who are the systems integrators, which are much more professional services focused. Typically have the, the technology specialization and they will focus on delivering projects.

As technology is changing, as we're utilizing more platforms, all that traditional way that we used to deliver projects is changing, it's becoming a lot more ongoing. And those businesses are finding that they're running across a lot more MSPs in their space and their growth trajectory is starting to stall because of that. And so they're looking at different ways of doing things. And then finally, we've got the value added reseller, the VAR.

They've been the longest sort of standing type of technology business in our space that they've they were built on the back of selling hardware Back in the day they could make a fortune selling just a desktop They made all their margins from it. They realized they needed to wrap some services around it But often gave those services away for free and then as time has progressed they've realized that we've needed to Resale other things they expanded out to networking they expect the spend it out to servers.

As the cloud has come in the SaaS subscriptions, they're getting their head around that business model and they're very sales driven. So we've got three different business models that have existed and coexisted in the environment and different market segments in the past. But as technology is changing and as client needs are changing, we're seeing all of those business models starting to tank.

The margins are shrinking, the requirement for what they provide isn't quite there anymore. And so a lot of partners are sensing that need for change. And so what is the change? The change is the technology solutions partner, the terminology that I came up with a few years ago, because I realized partners needed help to articulate what's going on.

Give them a North star to direct them for the future. And so a lot of the thought leadership has been converging on bundling all of these different partner business models into the MSP terminology. And partners were starting to realize that it doesn't apply to them. It's not helping. And they sensing something different and we're looking for that North star. So I came up with a technology solutions partner concept.

To start to unify this because as I see the changes and I'll go through it in a minute, we're going to converge as a more cohesive ecosystem. There's going to be a lot more partner to partner plays as there's other things at play. And I'm very deliberate around this language. The fact that we're technology businesses, let's call it out. But a lot of people still, when they hear the TSP acronym, they're bundling it down to service provider.

And the reason why I've gone solutions partner is quite deliberate. We're not providing services, we're providing solutions. And that's a very important mindset. A service is quite simple. It's very straightforward. It's often a transaction. Think a cleaner, they provide services. An accountant provides services. But what we should be doing is providing business solutions, technology solutions to business problems. That's very different to just providing a service.

So we need to change our mindset to thinking solution-based. How do we productize and package and then be able to explain and understand business challenges that our clients are having and then bring them a solution to that challenge in a way that they're actually going to understand. Not so technically focused as what we've always been. And then a partner over a provider. A provider is transactional as well.

For example, you get electricity providers. They're not going to come and provide you any advice. They're not going to have any type of relationship. All they're going to do is sell you commoditized thing. We all talk about that we want to have deep relationships with our clients. We want to provide them with solutions. So what we actually want is a long standing partnership. And whether that's a partnership with our clients as those sort of technology advisors, or whether that's partnerships with other technology partners, we're in it for the long haul.

And so we're not providing commodity type things. We need to have that mindset of actually, how do we engage in a proper partnership? And that's why it's so deliberate around the technology solutions partner language. That's why I keep driving that at the end of the day, I don't really care what you call it, call yourself when you actually engage with a client, you come up with better terminology.

Cause again, at the end of the day, the client is what matters. The clients have never embraced the managed services provider terminology, the MSP, the SI, the VA. They don't know who they are. They just know that you're an IT provider, the IT guy. And so you need to work out your own language and positioning based on where you're headed to actually engage your clients where they're at.

So, why am I talking about this? Why do I care about the technology solution partners and the transformation of the industry? We've spoken about business models, but the real importance and the need for change is our clients. Our clients are changing and the technology around them is changing as well. So let's focus on the clients in the first place. The clients are changing in multiple ways.

They're evolving to need and leverage technology to reduce the risk of their business, increase efficiency and enable scale and growth. That's because talent is getting more difficult as things change. Salaries are going up. So that inflation of the cost to deliver things in our client organizations are increasing. So they're looking to leverage this technology to solve some of these problems.

Let alone when you start adding in the fact that end user consumers are purchasing and expecting different experiences. That our clients are looking to expand into new markets because they've hit that life cycle. They're looking to consolidate inside industries through acquisitions because our clients are typically Baby boomers and old Gen X's that are owning these businesses that are looking to exit.

And the end users demographics are changing as well. The majority of end users are millennials and Gen Z's. The way that they actually utilize technology is far different to what we've had in the past. So all of these things are converging on the client side that are requiring us to deliver our engagements and our solutions in a much different way.

When you start looking at the technology side, technology has changed a lot. I remember when I first started in the industry, a light breeze could knock over most small business networks and we had to go and fix it. We got better in terms of standardizing the technology that the clients had, the vendor solutions got better and better as well. There's less need to fix things that are broken.

So what we've done in the past and our value has shifted a lot. There's still going to be a point that we need some of that kind of support, but what client environments are needing, especially as we've migrated things to the cloud, is an elevated engagement because the technology doesn't break. The users are changing and we need to leverage different things to help them. Whether that's compliance and governance over the practices that they use and ensure that we're reducing their risk through the use of technology./p>

Whether that's enabling the user to actually get the most out of the technology investment that we've helped implement. Or whether it's the ongoing continual improvement to increase efficiencies through integration of systems, automation of workflow, digitalization of practices.

There's different things there that our clients need because of the technology that's become available. We only have to use Microsoft Dynamics as an example of the technology that used to be available only at the enterprise is coming further and further and further down to the small business.

Technology has been democratized and enabling scale and opportunities in our SMB space that they've never had before. And that's further fueling that need to change the way that we leverage technology. And then finally, the other thing that's going on is what's going on in our own industry. Because of these technology and client changes, our margins are shrinking. The value that we once provided in the past is done by everyone. There's so much more competition.

If I use the MSP space as an example, the amount of competition that's there, you can pretty much throw a rock in most major cities and you'll hit several MSPs in the business areas. Clients have more choice than ever, but it's so commoditized that everyone looks the same. You only need to go to everyone's websites and it'll be the same blue, white and green color scheme, same language that's being used, the same positioning and messaging.

And so what that does is just drive prices down, let alone what else is happening in terms of our demographic. Most of the owners of the, inside the industry are still the founding generation. They're starting to exit and there's big opportunities through a lot of acquisitions that are going on with larger players that are consolidating and rolling up a whole bunch of businesses to get large economies of scale.

Then as you start throwing in the opportunities through automation and things like that outside of the industry, that price pressure is gonna only ever increase. So our need to either choose to scale or choose to transform and become a specialist in a technology space or become a technology advisor, it's going to drive that change.

And for many that have been around for so long, they're really struggling with this change. The traditional MSP has no skills, has no mindset around being a proper technology advisor, things like workflow automation. And this is going to cause a lot of troubles for them.

I'll expand on that in a bit more. The other major impact in our industry is the consolidation of vendors. We keep seeing the large ecosystems acquiring more and more solutions to put in their ecosystems to create the vertical silos. And that's to do with the commoditization. lot of that PSA and RMM growth across the industry has stalled as a whole. So they've been chasing business to get people across, but they're not actually growing through new businesses implementing a PSA and RMM.

It's change of channel type stuff. And so they're expanding their breadth to capture more growth for themselves by acquiring different solutions to put into their ecosystem directly. And this is a real sign of where the industry is at across the world. So this is why that traditional market is ripe for transformation. It's ripe for a change because there's so much opportunity to grow through acquisition and scale of economy and the traditional market.

There's VC firms coming in and driving a lot of that activity. So there's a lot of money to be made from that side for those kinds of organizations and the next gen more agile companies are realizing they need to do something different and are going and starting and doing something different to help that help the clients and so if you're in this middle ground of being a traditional model and you're not being deliberate about transformation or scale or even exit you're floating around they're lost and that's the majority of the market and Client churn is only increasing because of the changing needs this price the price pressure opportunities for them to reduce their cost.

And this is why I'm so vocal about the need to change and giving the pragmatic education. This is why I use the technology solution partners language to have conversations to help people think a little different.

Final thing I'll share around the technology solutions partner concept is it's not a one size fits all business model. I'm not trying to say you need to embrace this language. Like I said before, it's also not just one business model. There's multiple under it to give people guidance on what they can do.

There's a technology brokerage, which is almost like a modern VA. It's a technology procurement partner that procures hardware, SaaS subscriptions, and even other services and engages with clients to help them understand what they need.

And then, then procure it for them and keep going on as an ongoing partner to keep, keep them growing, but they're not actually built to deliver anything directly. It's very sales driven. very marketing driven. It's very much like an insurance broker. Lots of, lots of clients need this kind of engagement. They've got internal teams. There's things that they can, can need and do, but don't actually need a single partner to try and deliver them all./p>

They're happy to have that relationship with a single entity and company and build a partnership through there to let the experts go. You help them procure what they need. The second is a boutique TSP. That's a, it's a company that's focused on providing advisory services first and then delivering outcomes through, through technology. And that might be someone that is able to understand the client's business and then they'll identify their core offerings to help.

You might be throwing something like workflow automation as a core delivery item. It might be a dynamics implementation or a CRM ERP, but then leveraging other partners to deliver other segments of the technology space to provide a cohesive and comprehensive solution for the clients without them needing to go out and solve every single problem.

The other is a technology specialist and that's that more modern SI. They might have a specialty in let's say Azure. They've got deep speciality to be able to architect, deliver and support and manage a technology area like that. While they still might have direct clients when it makes sense.

They're more built to deliver through a partner model. They've got the specialization. They can amplify their sales efforts and delivery through a broker, the boutique and the scale, which I'll talk about next, but they're focused on that channel play. They're not built to go out and chase direct clients because they don't need to. If they're aligned with these others, they've got an amplification of the amount of clients. These other partners have the advantage of getting deep specialized experience that can deliver projects and ongoing recurring services as well so that they everyone can make money.

And then the final is the scaled. For most, this isn't going to be the model that you're going to be able to chase. These are the already established players that are already doing acquisitions. And the scaled is focused on providing baseline good quality services, but they're not providing the white glove approach.

They're providing a cost-effective engagement that's going to deliver at what's contracted. And this is where most MSPs should be most worried about because these are the guys that are automating stuff as well as they can, delivering self-service, having off-shored resources that can deliver traditional services and more modern services and solutions at a really cost-effective price.

They're going to take the market by price, not by a deep speciality or deep partnership like the others. And this is where hopefully hearing this sort of stuff can give you that North Star towards what you see on the horizon in the next 10 years. If it sounds like a lot of work, which it is, and you're already tired, you've already got your traditional business model, you just can't see yourself transforming./p>

My advice is to exit. There's more buyers in the market than there ever has been that are looking for technology businesses to grow their scale or add some speciality to their businesses as they transform into these technology solution partners. And it's a ripe time to do it now over the next sort of two to three years.

Any longer, the risk of client churn, the risk of losing too many employees and speciality, the shift towards different technologies is going to devalue the business. And I'm already starting to see that happen on all sides. so being one of those majority of partners that are lost, that aren't deliberately transforming or scaling or exiting, you're going to be in a very dangerous position. And I hope because of everyone's hard work over the last 10, 15, 20 years or longer, that we actually see successful exits and great outcomes.

But unfortunately for the majority, I don't think that that'll happen. I envisage a whole bunch of fire sales over the next, over the next decade of people who just can't run their business. They're losing ground. They need to get out and they're not going to get the value. They're not going to get the outcome that they deserve from all those years of work because there's no such thing as a magic sale.

So hopefully this helps frame up what's going on. Hopefully it helps shape things for you to have a deliberate direction. Hopefully it's the real shake up that you need to actually do something. Whatever that might be, sitting still and being complacent isn't a very good choice.