The Solution Providers who are true trusted advisors seem to be experiencing explosive growth.  With line of business decision makers, according to new research by CompTIA, now making about 50% of the technology decisions in enterprises and mid-size companies today, the most trusted advisor channel partners are growing significantly. The Line of business decision maker doesn’t care much about the technology for technology sake – he/she cares about the business outcomes and a 3-6 month payback on investments. For example, with public cloud we see a marketing or sales leader who wants a new app for their team can swipe a credit card, purchase the App, and build the required solution. That sales or marketing leader never has to approach an internal IT stakeholder & IT developer team, and he/she gets something instantly versus months or years for a solution.

Solution Provider as a label incidentally seems to be one from the 90s; the Informa Think Tank members and Informa as a company has moved to the Digital Service Provider as a new vernacular in the industry to reflect the nature of what the Provider of the future’s business must become.

True Digital Service Providers are entities that help drive customer success through adoption and usage of software platforms, innovative services, and who solve complex business problems for clients.

  1. Recurring revenue is fast becoming at least 30% of the providers’ business. This means not just break / fix maintenance revenue, it’s public cloud and professional services ‘sticky’ recurring revenue because this revenue is based on customer consumption and is highly valued by the customer. The stickiness of this type of revenue is powerful for the provider; it’s the gift that keeps on giving. In addition to that, if a solution provider has ambition to sell his/her company, then a dollar of recurring revenue is anywhere from 2-10x more valuable than a dollar from a capital expenditure purchase.
  2. Packaging intellectual property is a ticket to innovation. Progressive partners, from large companies like Accenture to small Digital Service Providers in a city now package up intellectual property. They build customized applications, proven and repeatable valued business processes for clients. LightRiver, a networking transport system integrator, recently completed an acquisition of a software development company so it could develop customized intellectual property for its’ customers. Packaged intellectual property like customized applications, custom processes, and custom services, that have been packaged into an offering give a company higher forward valuations than an organization that has no intellectual property.
  3. True business advisory services and sticky professional services are a must. The partner who has gone into their clients’ IT organizations and helped them become more valuable to the rest of their organization, to their line of business decision makers, and to the executives is a true value add. The providers who are most successful educate, advise, coach, and mentor the IT organization in clients.   We also use the transaction versus project services example. It’s about the partners’ overall value to customers, deeper industry and vertical capabilities, and their ability to look at what’s happening in the industry and capitalize on those trends with new offerings. For example, a partner might find that a 43% average margin on Project Services is a great way to improve his/her balance sheet and deepen the trusted advisor relationship the partner has with the customer. Visit: to learn more about best practices in this area.
  4. Digital Service Providers who have shifted the profile and skills of their organization’s technical employees to have high collaboration and softskills are fast becoming essential. The employees of the providers must give a career path for technical teams. Having deep collaborative selling and softskills are critical so these individuals become trusted advisors to clients and partners. These individuals need to be counted on to help drive and deepen the overall value the Digital Service Provider brings its’ clients. They must have strong collaborative and consultative sales skills in order to be successful with their clients. Contact us if you want to learn more

The industry is in a continued state of rapid change.   The best providers of the future will build happy customers and highly valuable companies at the same time.