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Products and Services, Part Two: The Real Advantages of Selling Solutions

Posted by on Tuesday, December 17th, 2013 with 3 Comments

When we left off in Part One of this series, we had explored the declining appeal of hardware sales and examined how the technology sector had changed in recent years to incorporate more services in to its offerings.  While hardware sales in the technology sector still offer an opportunity to establish brand recognition and generate outsized top line revenue, the commoditization of most technical devices mean margins will be low and profits light if your business is focused primarily on hardware sales.

So where do you go from here?   Solutions.

Partnerships are key to sales.

Solution selling means creating partnerships, not finding customers. Image courtesy of MSPMentor.

Yes, the word “solution” has become commonplace in technology sales in the last few years.  In some cases, you might even see it used as a verb (“solutioning”)!  But what does that really mean?  A “solution” is a customized offering of services, with or without hardware, that address the customer’s specific technology needs. For example, instead of selling your client a rack of blade servers (commoditized hardware), you might sell the servers ALONG WITH installation and configuration services, an ongoing support agreement, and a buyback program in three years when it comes time to refresh the server hardware again. That is a “solution.”

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Products and Services, Part One: Why Selling Products is a Poor Alternative to Solution Sales

Posted by on Monday, December 16th, 2013 with 5 Comments

When Dell went private this year, many analysts opined that the company was interested in moving from products to services as its core business model, and being private would make this transition easier.  Over the years, Dell had entered into a sales competition with companies like HP and Lenovo, in which units shipped and gross revenue were the most important metrics. The margins on these items have been in decline for years and the company was eager to make services a larger and more visible part of its portfolio. Doing so required breaking free of the hardware sales competition and reinventing Dell’s core value proposition.

If accurate, this reasoning certainly shines a light on what it means to compete in the technology sector in the twenty-first century.  Some companies like IBM have long focused on providing services while others, like HP, have spent decades focusing on providing hardware to customers. A company like Dell was able to sell billions of dollars of hardware each year. However, in the last decade it has become increasingly obvious to those in the technology sector that the rapid acceleration of technological capability combined with ever-reducing costs in the supply chain make it near impossible to succeed when solely dependent on selling hardware and physical goods.  To not only survive but also thrive, technology providers must make solution sales a core piece of their offerings.

Even large technology companies are selling services.

Did Dell go private to focus on solution sales? Image courtesy of TechHive.

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Look Who’s Talking: Creating Open and Honest Technical Team Communication in Your Enterprise

Posted by on Friday, December 13th, 2013 with 4 Comments

Before there was Facebook, there was MySpace. And before there was MySpace, there was Friendster. The story of Friendster’s demise has been rehashed in technology and business circles so many times that its hard to know what actually happened outside of a few key issues. One point that everyone seems to agree on is that management kept the pedal to the metal on driving user adoption, even though the company’s technical infrastructure was ill-equipped to scale with the rapid increase in traffic. The disconnect between technical teams and management is very real and can creep up out of nowhere. Whether it’s a company like Friendster or an initiative like the United States Government’s Healthcare.gov, stifled technical team communication and synergy between engineers and organizational leadership will put your organization or project on a fast track to failure.

Open office concept.

Having a team in the same workspace can foster good communication. Image courtesy of OfficeSnapshots.com

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Your Customers Are Talking, but Are You Listening? Customer Feedback in the Enterprise

Posted by on Thursday, December 12th, 2013 with 5 Comments

A hosting provider had built a solid business over a few years and was excited about the future. The provider had ten employees responsible for servicing two dozen accounts with various needs. From Quickbooks and website hosting to data backup solutions, they offered a wide range of services and took pride in customer service.  Last August, their very first customer called and abruptly cancelled their contract.  The cancellation was difficult for the hosting company; this customer represented one-third of all revenue.  The owner, service-manager, and sales director met in the conference room.

“What in the world happened?” asked the owner.  “I thought the service log showed we were always attentive to their issues?”

“We were.  Never missed an SLA with them in all the years we worked together,” replied the Service Manager.

The owner turned to the Sales Director.  “What did they tell you in their recent Quarterly Business Reviews?”

“They gave us high scores on everything.  The CIO told me they were very happy with our offerings.”

The three of them stared at each other for a few moments, unsure what to think. Finally the owner broke the silence, “Is there something we missed?  Some sign we didn’t pick up on? Something they were trying to tell us that we didn’t hear?”

Customer meeting

A meeting with a customer isn’t the best way to get feedback. Image courtesy of Popham Assoc.

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5 Reasons Why Building Your Own Data Center is a Terrible Idea

Posted by on Wednesday, December 11th, 2013 with 7 Comments

Not long ago, the concept of building a data center seemed like a great idea. Maybe you imagined having all your own hardware gave you greater control over your IT organization.  Maybe there was a subconscious element that tricked you into thinking that having a 50,000 square foot facility loaded with racks and racks of processing power meant your company – and you – had arrived.

You should be smarter now. Data centers are expensive, resource intensive, and rarely profitable. Reread that last part because it’s most important: the economics of data centers rarely match up with anticipated costs in the planning phase.   

Data center

Data Centers are resource intensive and expensive. Image courtesy of Host Gator.

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