The Commoditization of Network Support
The commoditization of network support is no different than the commoditization of everything else. When the only negotiation point is the lower right-hand corner of the quote, you’re a commodity. And no business is impervious to the race to commoditization – none. We’ve all become like washing machines: you put dirty clothes in and they come out clean and once that stops happening, you throw it away and get a new one. And, desired features aside, your negotiation with the guy at local retailer will be all about price. After all, you will have already done your homework online. It’s not unique. Everyone does all their homework online before buying – for everything, including network support.
So… how to avoid commoditization in your own business? By creating value, plain and simple. They key to avoiding the commoditization trap is to have a clearly definable and demonstrable value that is uniquely your own. If you cannot do that, you will be competing on price alone. Not to say that is necessarily bad; clearly it’s worked for a lot of retailers. Frankly though, most of us go into business dreaming of changing the world not offering the lowest price.
Back to my original point about the commoditization of network support. Was a time when a powerful differentiator was to have all-inclusive billing with remote monitoring and maintenance. We called this Managed Services. It was a great way to outfox the competition if you got in early because everyone was still billing on a “break/fix” or “time & materials” basis. Clearly, it added value. That changed overnight though and now, that which was a clear differentiator has become table stakes. Network support providers who charged a premium for this kind of service are now lucky if they can charge half of what they used to. And if you mess up once too often, they throw you away. In short, service providers have become washing machines.
The savvy network support providers now have to be able to provide far more value now than just simple monitoring and maintenance and flat fee billing. Like every other business under the constant threat of commoditization (and that is EVERYONE), we have to continuously redefine who we are and what we do for our customers in an ongoing effort to create new value. Given the reliance on technology that we all have, it is incumbent upon the network support provider to create value by adapting to the ever-changing needs of the clients they serve. Failing to do so will surely lead to irrelevance.
So what is your network support company doing to address the breakneck speed of technology change? Is it the same thing they were doing 5 years ago? Have they been proactive in readying your business for the seen (and unseen) changes going on in the world? And more importantly, what are you and your business doing…?
Technology has opened up huge opportunities for business growth. Talk to us about technology and how you can leverage it to serve your customers and grow your business.