Latest / Partnerships Unraveled / 097 - Maciek Szczesniak - Supporting SMB Partners

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097 - Maciek Szczesniak - Supporting SMB Partners · Partnerships Unraveled

• 0:07
  Speaker 2: Welcome back to Partnerships Unraveled, the podcast where we unravel the mysteries about channel and partnerships on a weekly basis.
• 0:13
  Speaker 2: My name is Efe and I'm excited to announce our very special guest Magic.
• 0:18
  Speaker 2: How are you doing Magic?
• 0:20
  Speaker 1: Hey, I'm doing really great.
• 0:22
  Speaker 1: How about yourself?
• 0:23
  Speaker 2: I'm doing amazing.
• 0:24
  Speaker 2: We're recording on.
• 0:24
  Speaker 1: Friday.
• 0:24
  Speaker 1: So Friday is a great day, always right.
• 0:26
  Speaker 1: Yeah, it'm doing really great.
• 0:27
  Speaker 1: How about yourself?
• 0:27
  Speaker 1: I'm doing amazing.
• 0:28
  Speaker 1: So Friday is a great day, always right.
• 0:29
  Speaker 2: Yeah, it's fine on Friday and there's the quarterfinals the Euro Cup quarterfinals this weekend, so I'm really looking forward to that as well.
• 0:35
  Speaker 2: Well, magic, thanks for coming on the podcast.
• 0:37
  Speaker 2: Could you please give us an introduction?
• 0:39
  Speaker 2: Who are you, what do you do, and why should people listen to you?
• 0:44
  Speaker 1: first I'm going to comment on the, on the, on the euro.
• 0:46
  Speaker 1: Okay, because, uh, I think poland had a big success.
• 0:49
  Speaker 1: Uh, we are, we like to be first in many things.
• 0:52
  Speaker 1: So this year we we've been super successful, being the first ones to exit the tournament, which I think it's really funny anyway.
• 1:02
  Speaker 1: So my name is Maciek Szczesniak.
• 1:04
  Speaker 1: Most of people have problems pronouncing it.
• 1:06
  Speaker 1: It's a Polish name.
• 1:08
  Speaker 1: So for the 25 years of my career at CompactHPE and HPE, I was better known as Magic that's the closest pronunciation to the Polish name of Maciek.
• 1:19
  Speaker 1: And well, I left the HPE to open my own business, go With Magic connected to my nickname, of course.
• 1:31
  Speaker 1: I started to collaborate with several institutions because I have a passion.
• 1:38
  Speaker 1: Over the 25 years of working with CompactHP and HPE, I developed a passion for two distinct areas.
• 1:46
  Speaker 1: One is the channel and the other one is the SMB.
• 1:49
  Speaker 1: Or maybe I should actually say one is the SMB and the other one is the channel, because they are extremely connected with each other.
• 1:57
  Speaker 1: So I work currently with a B2SMB institute in the United States of America to drive the transformation of the small and medium businesses through technology, but I'm also an executive member of the Ultimate Partner Experience Platform, where we work with the partners that are focused on the small and medium business to accelerate the transition of the channel partners into the MSP model.
• 2:30
  Speaker 2: Yeah, we're going to all come back to that both the institute that you mentioned and the program that you're working on but I want to thank you for taking the time to come on the podcast, because you're really focused on the SMB and the channel, which are the two topics that we discuss most on this podcast.
• 2:49
  Speaker 2: So thank you for coming on and I'm really looking forward to picking your brain and seeing the kind of knowledge that you're going to share with us today.
• 2:58
  Speaker 2: My pleasure.
• 3:01
  Speaker 2: Magic, you know we always like to talk about.
• 3:04
  Speaker 2: There's a trend that's happening in the market.
• 3:07
  Speaker 2: So we are seeing top tech vendors like Microsoft, cisco, hpe.
• 3:12
  Speaker 2: They're heading down market and they're targeting SMB and mid-market end users.
• 3:17
  Speaker 2: What do you think is causing this shift?
• 3:23
  Speaker 1: There are many more companies that are actually thinking about expanding to the small and medium, first to the medium-sized businesses and then small businesses, and that is typically connected with the need to grow.
• 3:37
  Speaker 1: Many companies, when they develop a technology, they first target the enterprise customers, very large companies because technology, typically, at its invention, is pretty complex and being a technology company, you have to talk to someone who understands this technology pretty well.
• 4:01
  Speaker 1: Enterprise companies have large IT departments that specialize on diving into the new technologies and then trying to understand what the technology is, and those departments are typically good guinea pigs for any kind of experimentation.
• 4:16
  Speaker 1: So many companies start by selling their product or technology idea offer to very large enterprise and then the next one and the next one.
• 4:28
  Speaker 1: But you know Efe, there are only 500, fortune 500 companies, and once you figure out how to break through to most of them, you want to continue the growth.
• 4:41
  Speaker 1: You want to continue the growth to please your stakeholders, stockholders, owners, investors, you name it.
• 4:50
  Speaker 1: And this is the moment when many companies say like, oh my goodness, I need to expand further.
• 4:55
  Speaker 1: Who do I go after?
• 4:56
  Speaker 1: And obviously they start with the midsize companies and then smaller and smaller and they realize that SMB is a massive opportunity.
• 5:05
  Speaker 1: It's 350 million small and medium business companies around the world and they are typically extremely innovative.
• 5:14
  Speaker 1: They very quickly understand.
• 5:17
  Speaker 1: Once they grasp the technology, they understand how they can translate it into business outcomes.
• 5:21
  Speaker 1: So if companies want to continue to grow, they need to figure out how to enter the small and medium business space yeah, for smb it's definitely a huge market.
• 5:37
  Speaker 2: I fully agree with you.
• 5:38
  Speaker 2: I think in the united states half of the tech spending comes from the SMB and in some verticals, such as, I think, telecommunications and devices, smes actually spend more than the enterprise.
• 5:52
  Speaker 2: So it's definitely a high growth market and I think also the growth rate is expected to be 8% year over year until 2027, if I'm not mistaken.
• 6:06
  Speaker 1: So, if you want a couple of numbers, I think there are a couple of important considerations.
• 6:14
  Speaker 1: First of all, smbs is 99.9% of all the companies, of all the entities.
• 6:18
  Speaker 1: It's two-thirds of the employer.
• 6:21
  Speaker 1: They hire or they employ two-thirds of the workforce around the world and they are responsible for anything between 40% and 70% of the GDP of many of the countries.
• 6:35
  Speaker 1: So I mean, yes, in some segments they might be dominant, but I'm pretty sure that in some countries they are simply dominant for driving the economy and the growth.
• 6:46
  Speaker 1: And it was very, very visible during, for example, COVID, and a lot of people predicted that small and medium business will be closing down and going bankrupt.
• 6:59
  Speaker 1: And what?
• 7:00
  Speaker 1: Name you?
• 7:00
  Speaker 1: But I give you a very interesting example.
• 7:03
  Speaker 1: Name you, but I give you a very interesting example.
• 7:09
  Speaker 1: When COVID started, there are two coffee shops very close to my place where I live.
• 7:12
  Speaker 1: One is a big international chain I'm not going to name the name, just not to trash any particular brands, but big international coffee chain.
• 7:21
  Speaker 1: And another one is a very small coffee shop local coffee shop the international coffee chain.
• 7:24
  Speaker 1: And another one is a very small coffee shop local coffee shop, the international, the international coffee chain.
• 7:28
  Speaker 1: The day the lockdown started.
• 7:30
  Speaker 1: They just closed down and the lockdown was for three months.
• 7:35
  Speaker 1: They had enough cash flow and enough financial power just to stay close.
• 7:41
  Speaker 1: The local coffee shop started immediately to call the customers offering coffee delivery home and started to expand their business.
• 7:51
  Speaker 1: They started to deliver lunches, they started to deliver other shopping, you know.
• 7:57
  Speaker 1: So they expanded their business.
• 7:59
  Speaker 1: They used this pretty difficult time for them because suddenly you know you run a coffee shop, nobody shows in a coffee shop so you don't make any money.
• 8:09
  Speaker 1: But I actually used that to their advantage to drive more business and a bigger business than whatever they've done before the pandemic.
• 8:18
  Speaker 1: And now you know, I think they are not only a coffee shop but a restaurant nowadays.
• 8:22
  Speaker 1: So they actually benefited in a way from the pandemic.
• 8:26
  Speaker 1: And that is just showing you how innovative and business-oriented small and medium businesses are.
• 8:39
  Speaker 2: Yeah, I love that story.
• 8:40
  Speaker 2: Yeah, you're absolutely correct.
• 8:42
  Speaker 2: I want to get into a different point, magic, and I want to talk about the role of marketing.
• 8:49
  Speaker 2: In your previous role at HPE, you were the VP of Global SMB Segment, if I'm not mistaken, so you are very knowledgeable in this topic, I would say.
• 8:59
  Speaker 2: So what is the role of marketing for the vendors out there who are trying to target those SMB customers?
• 9:08
  Speaker 1: I think, first of all, my experience and my opinion is that marketing is way more important in the small and medium business space than it is in the enterprise space.
• 9:19
  Speaker 1: Yeah, in the enterprise space, the sell that you do, it's typically very personal.
• 9:30
  Speaker 1: So personalized marketing is very important and personalized marketing is typically very much connected with how good your salespeople are and how good the marketing will support the sales organization, will support the sales organization.
• 9:47
  Speaker 1: But I would argue that the sales probably play a much stronger role in the enterprise space.
• 9:54
  Speaker 1: Now, in the SMB space, you talk to 350 million of your customers and it's not that easy to target directly those entities, those potential customers of yours.
• 10:10
  Speaker 1: So what you need to do, naturally, is you need to have a very strong marketing position to target those small and medium businesses.
• 10:22
  Speaker 1: You have to have a very right message, very easy message, very easy to understand message, a business-like message, not a technology message, which many companies struggle with and because you cannot hire I mean there's no company in the world that will hire a sales organization to target small and medium businesses.
• 10:45
  Speaker 1: So you need to have a way to communicate to those small and medium businesses.
• 10:47
  Speaker 1: So you need to have a way to communicate to those small and medium businesses.
• 10:50
  Speaker 1: Marketing starts to play an extremely important and critical role in targeting this particular segment and entrepreneurs in this particular segment.
• 11:02
  Speaker 2: Yeah, and you mentioned that you know there are no business out there who is going to hire a sales team to go after the SMB, so it's also pretty much done via the channel, right?
• 11:11
  Speaker 2: So when you look at all these big organizations, the channel is absolutely crucial to serve the SMB segment.
• 11:16
  Speaker 2: So what do you think about the importance of true partner marketing and true partner marketing, partner marketing and true partner marketing.
• 11:28
  Speaker 1: I should correct myself because I should say I said that no company can hire a sales force.
• 11:34
  Speaker 1: Actually, every company can hire a sales force that will be able to target small and medium business.
• 11:39
  Speaker 1: And this sales force that companies should be hiring to target the small and medium business is the channel.
• 11:46
  Speaker 1: And many of the vendors make a mistake treating channel as a bit of a competition.
• 11:54
  Speaker 1: Maybe you know an external organization, somebody they need to watch, the most successful vendors no-transcript.
• 12:36
  Speaker 1: A communication to the channel partner will mean a good communication to the channel partner and a good collaboration with the channel partner will mean that the channel partner will be able to carry the message further to tens, maybe hundreds, maybe even thousands of customers of this channel partner.
• 12:53
  Speaker 1: So with one good message you can reach many of your audience members.
• 13:01
  Speaker 1: Now this is where the marketing to the channel and through the channel starts playing an extremely important role, because obviously you have to help the channel partners to tailor this message and to position your value proposition properly so it's easy to understand for the channel partners, so they can translate it into their offering, into their own customers.
• 13:31
  Speaker 1: So I would say having a successful marketing to the channel and through the channel is one of the key success factors if you want to win the small and medium business.
• 13:43
  Speaker 2: Yeah, I love that message.
• 13:44
  Speaker 2: I want to pivot to another topic, a hot topic Magic.
• 13:49
  Speaker 2: I want to talk about AI, because AI is among the top four investment priorities for SMBs.
• 13:54
  Speaker 2: So in 2023, 33% of the surveyed companies in the SMB segment had already invested in AI technology and I think 78% of SMBs are currently looking to adopt AI.
• 14:07
  Speaker 2: Now we also have the AI pieces coming up.
• 14:10
  Speaker 2: It's one of the main priorities for the SMB businesses.
• 14:15
  Speaker 2: Now, how do you see AI transforming SMBs and the way they do business?
• 14:21
  Speaker 1: I think it's a historical opportunity for the small and medium business, because one of the reasons why a person opening a business with a great idea was struggling to compete with larger organizations was the lack of resources.
• 14:48
  Speaker 1: Lack of financial support and lack of resources, I think.
• 14:50
  Speaker 1: From the financial support, I think we have now many of the venture capitalists and the money is there.
• 14:57
  Speaker 1: What I want to say is there are investors and the money is there to support people with good ideas.
• 15:04
  Speaker 1: Now those people will need two additional pieces.
• 15:09
  Speaker 1: They will need help in how to take this idea to market, and this is people like me or many other consultants come and can play a very important role, like the B2SMB Institute, for example, can help them to put in place playbooks, how to expand and grow into the, for example, into the international markets, to their idea.
• 15:33
  Speaker 1: But the other challenge that they are typically facing is lack of resources.
• 15:37
  Speaker 1: Hiring the right people and retaining them is one of the top challenges that the small and medium businesses face Around the world.
• 15:47
  Speaker 1: Any type of business they run.
• 15:51
  Speaker 1: Go around your own neighborhood and look at the restaurants.
• 15:55
  Speaker 1: Most of them probably have some kind of an advertising saying I'm going to hire help.
• 15:59
  Speaker 1: I'm going to hire help.
• 16:00
  Speaker 1: Whoever I talk to from my friends running small and medium business, they always say I have this person, this person left.
• 16:08
  Speaker 1: I cannot replace it.
• 16:09
  Speaker 1: This is a problem for me.
• 16:13
  Speaker 1: Ai the way I position AI for SMB is having an extremely powerful, hardworking, very knowledgeable, all-knowing and very attentive assistant, and you can hire hundreds of those assistants at a very minimum cost.
• 16:39
  Speaker 1: You need to remember that those assistants are very inexperienced, so you have to give those assistants those ai you know kind of helpers a lot of guidance at the very beginning.
• 16:53
  Speaker 1: Okay, typically a lot of data, but for the first time, smb's will be able to hire resources to help them to advance their ideas, ideas and grow their business, which should level the playing field for them versus the enterprise organization.
• 17:10
  Speaker 1: So no wonder SMBs around the world and the research that I've seen is even more optimistic, saying 50% of SMBs are already testing some form of artificial intelligence and generative AI just opened the floodgates, and then 90% of them already use or are planning to invest in more advanced implementation of the AI.
• 17:41
  Speaker 1: So I think it's going to be a breakthrough and I'm super happy about it and, together with the B2S&B Institute and the universities around the world.
• 17:52
  Speaker 1: We'll be embarking on the journey to help the SMBs to understand what are the areas they can target with artificial intelligence, how to benefit from that the fastest, the quickest and uh, and what kind of uh productivity opportunities, new business opportunities, analytical opportunities are there that they can use from the artificial intelligence yeah, I am also one of the people who is very excited about the development of AI.
• 18:26
  Speaker 2: To be honest, I am kind of excited to be living at the moment and seeing AI develop and I think it's going to really change the way that you know all of us you know, including SMEs, everyone.
• 18:38
  Speaker 2: It's really going to change how we do business in the future.
• 18:41
  Speaker 2: Magic, you are building a program.
• 18:46
  Speaker 1: We need to say one more thing Efe yes, go ahead.
• 18:49
  Speaker 1: One more element that is super important if you talk about AI and SMB, there's still a lot of SMBs that don't understand and appreciate two factors that are super important when thinking about the deployment of AI.
• 19:08
  Speaker 1: One is the cybersecurity and the other one is the data.
• 19:11
  Speaker 1: If you want to deploy, if you want to start using AI at the larger scale in your company and you want to kind of grow the usage into many parts of your organization, you can use AI in many areas.
• 19:30
  Speaker 1: You can use it in your financial systems.
• 19:36
  Speaker 1: You can use it in your talent acquisition.
• 19:40
  Speaker 1: You can use it in your customer experience space, like handling customer requests.
• 19:47
  Speaker 1: You can use it in your e-commerce.
• 19:50
  Speaker 1: The more you use AI, the more careful you need to be about your cybersecurity posture.
• 19:56
  Speaker 1: So I encourage all the channel partners out there to go and talk to your customers about significantly improving their cybersecurity protection.
• 20:08
  Speaker 1: The AI will give a lot of power to the SMBs, but it's also giving a lot of power to the cybercriminals, who are increasing the speed of the development of the new tools to bridge the firewalls and the antivirus systems and to increase the number of phishing attempts, but they are also developing new vectors of attack.
• 20:34
  Speaker 1: So all the channel partners out there, great opportunity for money, but also great responsibility to drive the small and medium businesses to a better place, like a more secure and better place for the future.
• 20:50
  Speaker 2: Yeah, that's a really good start.
• 20:52
  Speaker 1: Yes, and the second topic that I think is extremely important is, you know, kind of understanding your data situation.
• 21:04
  Speaker 1: I'm using a very generic term on purpose, because I'm thinking about several aspects of data management.
• 21:11
  Speaker 1: I'm thinking about what kind of data you, as an SMB organization, have.
• 21:17
  Speaker 1: How is it stored, is it compliant, is it well protected?
• 21:22
  Speaker 1: But also, what are the new sources of data that you can acquire both inside and outside of a company.
• 21:31
  Speaker 1: When I think about AI today, there are many large language models that were trained on a certain amount of data and there is a prediction that in a couple of years, maybe in two or three years, we're going to run out of the data that we can feed, publicly available data that we can feed to the artificial intelligence.
• 21:50
  Speaker 1: The data that is created by the humanity is created slower than the data that is being uploaded to the artificial intelligence.
• 21:59
  Speaker 1: So obviously there will be synthetic data and we'll talk about that as well, but I think the big value will be the data that you have in your own organization, because it's not publicly available, so it cannot be fed to the model.
• 22:13
  Speaker 1: So if you want to develop as an SMB, if you want to develop a very specific model to specifically help your company.
• 22:20
  Speaker 1: You will have to really understand your data.
• 22:24
  Speaker 1: Generally speaking, and a huge opportunity for the channel partners to go and explore together and brainstorm and become a real consultant and a real partner to their customers.
• 22:38
  Speaker 1: Not only resell and refresh their infrastructure every couple of years, but to become a real consultant to the customers in terms of what data is available, how it could be used to further the business of their customers, to expand and accelerate and grow the business of the customers.
• 22:59
  Speaker 1: Huge opportunity really.
• 23:02
  Speaker 2: Yeah, I fully agree.
• 23:03
  Speaker 2: You touched on two great points.
• 23:06
  Speaker 2: First one is I think we had Jason Beale, vp of Barracuda, recently and he talked about how you know the bad guys, the hackers.
• 23:14
  Speaker 2: They're really democratizing their attacks and they're also heading down market and targeting those SMB end users.
• 23:20
  Speaker 2: So it's a very fragile segment.
• 23:22
  Speaker 2: So you know, we are, you know, as the vendors, channel partners, we are responsible for those SMBs cybersecurity.
• 23:30
  Speaker 2: And the second point is I think what I like to say is you know the AI, the large language models, are as good as the data that you feed into it Right.
• 23:38
  Speaker 2: So you have to channel partners.
• 23:39
  Speaker 2: We need to help the businesses to make sure that they have the right data, they collect the right data and the data is of high quality.
• 23:47
  Speaker 2: Now Magic I want to talk about that.
• 23:52
  Speaker 2: You're building a program right now to help channel partners.
• 23:55
  Speaker 2: You know kind of move away from the traditional resale model to an MSP model.
• 24:00
  Speaker 2: So this is a shift that we're seeing and you know maybe you may disagree with this, but when we talked about it previously but you know there's a heavier focus on managed services in the SMB segment and I've been hearing people talk about, you know, more and more channel partners who are serving the MSPs there developing managed services.
• 24:22
  Speaker 2: Now, it's obviously not an easy task.
• 24:26
  Speaker 2: You know it's complicated to shift models and develop MSPs.
• 24:30
  Speaker 2: So you're working on a program to help the channel partners to build managed services.
• 24:36
  Speaker 2: So the two questions that I want to ask is that why is it important for partners to build managed services practices to attract SMB customers and what are the challenges around it?
• 24:52
  Speaker 1: I could talk for a long time why it is important to become an MSC, but my experience working with a channel is that there's one common thing that the channel partner wants to do around the world.
• 25:08
  Speaker 1: It's one requirement that was always put in front of me and I think many vendors and many people forget about this requirement.
• 25:16
  Speaker 1: Channel partners exist because they want to make money and the simple answer is MSP contracts have a much bigger margin than the resale.
• 25:27
  Speaker 1: It's as simple as that.
• 25:30
  Speaker 1: And you know, as the traditional resale model is becoming over-commoditized, the last couple of weeks I spoke to a number of channel partners just catching up on how things are, and everybody is telling me hey, you know, I have a problem because the program that this and this vendor is running is making the pricing very transparent.
• 25:55
  Speaker 1: Therefore, anybody can get the price from the vendor.
• 25:59
  Speaker 1: It's a promotional price, so I can only put so little margin on top to win the business.
• 26:06
  Speaker 1: So the resale model is getting extremely commoditized, both because the market transparency is increasing, but also because the vendors that offer traditional hardware resale programs are losing the competitive edge as well.
• 26:24
  Speaker 1: So they cannot differentiate.
• 26:26
  Speaker 1: They need to cut the margins, they need to cut the rebates for the channel.
• 26:30
  Speaker 1: So I would say that, as a reseller today you are facing a very interesting dilemma.
• 26:38
  Speaker 1: Either you're going to cut costs and look for the efficiencies in your organization and try to be the most efficient reseller out there, which means typically, you know, moving to the more digital approach, maybe having a webpage or e-commerce site, which then it's a strategy.
• 26:58
  Speaker 1: But maybe a more interesting but a very difficult one will be to go and try to move to the managed service provider approach where you don't offer necessarily a resale program and again there's less and less things that you can resale because, as we see, the cloud growing enormously over the last several years.
• 27:21
  Speaker 1: I mean, if you look at the cloud growth, the last announcements from the cloud vendors, they were growing like 30% year over year.
• 27:28
  Speaker 1: If you look at the hardware vendors, if they grow at all, they grow single digital decline.
• 27:35
  Speaker 1: I think most of storage vendors decline.
• 27:39
  Speaker 1: In the server business, the only growth that I've seen was really the artificial intelligence servers, which is not an SMB yet, I would say so as more and more people move to the cloud setup, the stuff that you can resell is declining.
• 27:56
  Speaker 1: I mean Microsoft 365, the cheapest version is like what?
• 28:01
  Speaker 1: $6 per seat $7 per seat.
• 28:03
  Speaker 1: How much margin can you make on this?
• 28:05
  Speaker 1: You know the 50-people organization.
• 28:08
  Speaker 1: There's not much margin to be made because any customer can go online and, just with a swipe of a credit card, buy this kind of a license.
• 28:16
  Speaker 1: So there's more money in the msp business, for sure, but the transition is not easy.
• 28:24
  Speaker 1: I've met so many during my hpe days.
• 28:27
  Speaker 1: I've met so many channel partners that were basically saying magic, we understand the green lake, but we don't understand how to sell it.
• 28:34
  Speaker 1: And then I started to map in my mind what are the areas of change that the reseller has to go through to go into the MMC model?
• 28:43
  Speaker 1: And there are many of them.
• 28:44
  Speaker 1: There's a cultural shift that they need to go through from a kind of a more product-oriented or SKU-oriented approach to more of a service-oriented, but not service as a SKU but service as a service, which means you need to develop your packages, monthly packages.
• 29:01
  Speaker 1: There's a different financial model.
• 29:02
  Speaker 1: In a resale model, you buy, you put a margin on a quote and you sell.
• 29:07
  Speaker 1: I'm oversimplifying, but for a reason.
• 29:09
  Speaker 1: In an MSP model you many times have an upfront cost and then you have a revenue deferred over many months or subscribed over many months.
• 29:21
  Speaker 1: So that means that you will have an upfront cost and the money will come later on.
• 29:26
  Speaker 1: And I've been through this kind of a transformation at HPE.
• 29:31
  Speaker 1: So I've seen it inside a very large company that was very powerful but still struggled with the cash flow and I can imagine how much the smaller organizations struggle with.
• 29:45
  Speaker 1: There is a different sales and marketing.
• 29:46
  Speaker 1: Sales and marketing in a resale business is more transactional, more focused on the one-time offers.
• 29:54
  Speaker 1: You market a price, you market an offer.
• 29:58
  Speaker 1: In the managed services, you market your consulting capabilities.
• 30:02
  Speaker 1: You're selling and marketing your consultative approach to the customer.
• 30:07
  Speaker 1: You position yourself as a package, as a monthly package based on the consulting effort that you make.
• 30:16
  Speaker 1: There are different systems, more complicated systems from the interaction.
• 30:23
  Speaker 1: There are different vendors that you need to, different vendors and different suppliers that you need to work with.
• 30:29
  Speaker 1: You even see that you know there's Pax8.
• 30:32
  Speaker 1: It's one of the distributors that has been kind of growing.
• 30:36
  Speaker 1: There is ConnectWise.
• 30:37
  Speaker 1: There's Kaseya and Datto systems that you need to start using.
• 30:42
  Speaker 1: There is a different pricing because in a research space your price is more focused on the individual SKU.
• 30:51
  Speaker 1: The pricing is more complicated and sophisticated in the MSP model.
• 30:55
  Speaker 1: So there are like six big areas where channel partners have to make the transition.
• 31:01
  Speaker 1: Some of them struggle and they end up.
• 31:06
  Speaker 1: If they have the financial might or the backing of their investors, they end up buying another company MSP trying to shift the business from a reseller to this new purchase company.
• 31:20
  Speaker 1: Buying a company is a risky business because you typically have different cultures.
• 31:28
  Speaker 1: You have a lack of understanding with each other.
• 31:31
  Speaker 1: I went through two mergers Compact Digital and Compact HP so I know how difficult the mergers are.
• 31:39
  Speaker 1: Some companies do a spin-off and set up a separate company or separate part of a company to deal with the MSP.
• 31:46
  Speaker 1: I also know some of the successful resellers that made the transition and I'm connecting with those resellers.
• 31:54
  Speaker 1: And if you are a reseller, for those of us who are listening to us, if you are a reseller that has made a successful transition to MSP, I would love to hear your story, because there are resellers that made a successful transition and I'm connecting with those resellers and with them I'm building this program, using the Ultimate Partner Experience platform to deliver those opportunities to them and understand how they should be moving away or moving away from the reseller or changing into the MSP model.
• 32:37
  Speaker 1: So that's the program that I'm building at the moment.
• 32:44
  Speaker 2: Yeah, that's amazing.
• 32:45
  Speaker 2: I think this is a very important topic and an interesting one as well.
• 32:48
  Speaker 2: So, those who are listening, I'll make sure to put Magic's LinkedIn in the description.
• 32:53
  Speaker 2: So if you're curious or if you want to share your story, please reach out to him.
• 32:59
  Speaker 1: All right.
• 33:00
  Speaker 2: So there are two more questions that I want to go through Magic.
• 33:03
  Speaker 2: So you also mentioned earlier that you are a member of the B2SMB Institute, which is an institute that helps its members to succeed and thrive in the business to small business marketplace.
• 33:18
  Speaker 2: Could you tell us more about the B2SMB Institute and the partnerships it fosters to support SMB customers?
• 33:30
  Speaker 1: B2SMB Institute is a very interesting organization.
• 33:33
  Speaker 1: It's an organization that is gathering people with a passion, like I have, which is helping the small and medium businesses be successful, and the name is very telling it's B2SMB.
• 33:50
  Speaker 1: It means the business to SMB and it is gathering companies that sell to SMB, means the business to SMB and it is gathering companies that sell to SMB.
• 33:59
  Speaker 1: Some of them are SMBs, but that's not the kind of a connecting factor.
• 34:03
  Speaker 1: The connecting factor, the common denominator, is individuals and companies that really care about selling to SMB, and there will be many of the executives.
• 34:15
  Speaker 1: The members of the institutes are many executives, like my previous job vice presidents, directors that are responsible for selling into the SMB segment at the large organizations Google, meta, apple, dell are members of the institutes in the United States of America and they gather on a regular basis and they exchange ideas.
• 34:42
  Speaker 1: I was amazed Selling into SMB within the launch organization.
• 34:47
  Speaker 1: I came across a number of challenges, like around the product portfolio, around the account allocation, around the product portfolio, around the account allocation, around the marketing allocation.
• 34:59
  Speaker 1: There's a lot of challenges that executives responsible for SMB face at the large organizations and there are also smaller companies that are dedicated to support SMBs.
• 35:18
  Speaker 1: I will work on two big projects with B2SMB Institute.
• 35:23
  Speaker 1: One is the technology transformation concepts with the universities.
• 35:34
  Speaker 1: At HPE we had a very successful program with the University of Washington that helped the small and medium businesses to learn through the university about how to transform themselves using technology.
• 35:51
  Speaker 1: I want to work with the B2SMB Institute to expand on this idea and kind of grow the collaboration with the universities further and beyond technology, I would say.
• 36:09
  Speaker 1: And the second topic that we are going to do, we are also planning to bring the B2SMB Institute to Europe, because I don't think there is an organization like that in Europe and I think it would be extremely useful to put together people from various companies that are interested in connecting with other fellows that have similar challenges selling to SMB and kind of exchange the ideas in a very non-competitive environment and collaborative environment On the general level exchange the ideas, what are the problems that people are facing, kind of addressing the SMB space.
• 36:53
  Speaker 1: So those are the two kind of spaces that I will be focused on as a member of B2SMB Institute.
• 37:02
  Speaker 2: Yeah, I think you're right.
• 37:03
  Speaker 2: I have never heard of a similar organization in Europe, so I think it's exciting that you're working on a project to potentially bring it in Europe.
• 37:12
  Speaker 1: It's extremely successful in the US.
• 37:13
  Speaker 1: I went to the event a couple of weeks ago.
• 37:16
  Speaker 1: I had a keynote speech actually at the event and I was really positively surprised about the level of conversations and about the fact that many people have had the same problems like I had.
• 37:32
  Speaker 1: I thought that HPE was the only one struggling with access to the SMB market, that we had our own internal problems and external problems.
• 37:42
  Speaker 1: That we did, and I've met a number of people at the event that said like hey, I've tried this solution.
• 37:48
  Speaker 1: Have you thought about this?
• 37:49
  Speaker 1: Have you thought about a different way of account allocation or different way of managing your communication to the small and medium businesses?
• 38:00
  Speaker 1: Have you tried this tool?
• 38:01
  Speaker 1: Have you tried this system, this platform and this idea?
• 38:04
  Speaker 1: And this kind of exchange of ideas is opening up further new ideas like a brainstorming session a little bit okay on the partnerships that you can build and the ideas processes that you can leverage.
• 38:20
  Speaker 2: Yeah, that's amazing.
• 38:21
  Speaker 2: Well, Magic, thanks so much for joining us today.
• 38:24
  Speaker 2: Thanks for talking about the SMB channel, the AI opportunity.
• 38:28
  Speaker 2: Before I let you go, there's one last question that I like to ask.
• 38:32
  Speaker 2: So we always like to ask our guests to invite the next guest on the podcast.
• 38:37
  Speaker 2: Who do you think would be a great guest?
• 38:39
  Speaker 2: Maybe someone who is knowledgeable and experienced, especially in the SMB channel?
• 38:46
  Speaker 1: Let me think there's quite a few people.
• 38:49
  Speaker 1: The name that comes to my mind is Tony Dirk from Hewlett Packard Enterprise, a good friend of mine and someone who's really, if I understand correctly, he's in charge of the small and medium business and distribution business for the northern Western Europe theater of HP operations, so he would be an ideal person to test.
• 39:16
  Speaker 1: Hp recently had a very successful HP Discovery event.
• 39:21
  Speaker 1: Maybe he's going to bring some interesting news about artificial intelligence, about the channel and about some new ideas for the small and medium business.
• 39:30
  Speaker 1: Tony Dirk, if you are listening to that, maybe you'd like to join us or join EFA for the small and medium business.
• 39:36
  Speaker 2: So, tony Dirk, if you are listening to that, maybe you'd like to join us or join EFA for the next conversation.
• 39:39
  Speaker 2: That would be amazing.
• 39:40
  Speaker 2: Well, thank you so much for your suggestion, Magic and Tony, if you're listening, I'll be sending you a message and see you in the next episode.