At TSIA, we're always talking about how technology providers industry-wide are making the B4B shift from delivering products to services, as well as the increasing importance of providing customer outcomes. While this drastic change might seem like it only applies to product manufacturers, the reality is that non-manufacturers are also feeling an increased pressure to rethink how they gain new and retain existing customers. I'd like to take a minute to highlight how non-manufacturer companies within our managed services membership community are able to apply TSIA research to their operations and successfully adapt.
Traditionally, manufacturers followed a "make, sell, ship", or Level 1 business model as we refer to it in our book, B4B, and were only responsible for the creation and distribution of the product itself. Any customer engagement after that point, such as support, training, and other post-sale activities, were then handled by their non-manufacturer partners, such as systems integrators, service providers, value-added resellers, etc. However, there's been an increasing customer demand for manufacturers to take more ownership of their products and aid in all aspects of the customer journey, which include roles that were traditionally provided by non-manufacturers. As a result of this shift in responsibility, it's only natural that non-manufacturers are starting to feel crowded out of their own revenue stream by companies they once considered non-competing partners.
The good news is that this doesn't have to be the case. Even though more traditional product companies are moving into non-manufacturer space, many still haven't been able to develop the same robust capabilities as non-manufacturers who have been in this space for years. Likewise, non-manufacturers can also benefit from a strategic partnership with manufacturers who know they need to provide more services but need to seek outside help.
For example, when we surveyed non-manufacturer companies within TSIA's managed services membership, 67% are currently outsourcing some element of their managed services offer to a partner. Sometimes that partner is a manufacturer, sometimes it's even another non-manufacturer. At TSIA, we're able to further help facilitate these symbiotic relationships to help companies efficiently work together in these emerging new business models.
If you've been following our research on the impact of B4B on product companies, it might surprise you that a significant amount of TSIA research comes from non-manufacturers, specifically in managed services. In fact, non-manufacturers now make up the fastest growing part of our overall managed services membership. Here are just a few non-manufacturer companies who are currently benefitting from the industry insight, benchmarking programs, and business frameworks that come with a membership in our managed services discipline:
To provide some insight into how our research in this area works, we start by dividing our research by peer group, for example, hardware companies, software companies, manufacturers, value-added reseller, etc. This allows us to spot trends and core business results in managed services that might be different from one peer group to another. Because we monitor trends across the industry as a whole, we're able to simultaneously know what the industry-wide revenue growth and profit levels are looking like for hardware, software, and non-manufacturers, allowing these peer groups to understand "what good looks like" when compared not just to their peers, but the overall industry as well. As lines are blurring between peers and the relationships between manufacturers and non-manufacturers continue to change, this is an especially valuable insight to have.
In my role as the VP of research for TSIA's managed services discipline, I analyze real-world data from all angles in order to help our members understand how the overall industry is affecting supplier-manufacturer relationships and what this means for managed services. Get in touch with us today to learn more about how TSIA and our extensive community of technology and services providers can help you solve your biggest challenges in managed services or in any of our other focus areas. I look forward to hearing from you!
Post Date: April 14, 2016
George Humphrey, is the vice president of research, Managed Services, for TSIA. He is a networking and communications industry veteran of over 20 years with extensive experience in managed infrastructure and application services. Throughout his career, he has held several leadership positions in managed services, including global strategy, product line management, marketing, operations, and client management.
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