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Eric Anthony:
And a big thank you to today's sponsor, super ops.ai, built for the Future Built for growth. This is from a data point that was released in the IDC North America Partner landscape study for 2023 when asked to identify their top opportunities, 28.4% of the 503 partner survey named vendor relations as one of their top opportunities. They also said when asked to rank their biggest challenges, 28.5% said vendor relations.
Justin Esgar:
We'll talk about vendor relations. What's up everybody? Welcome to the All Things MSC podcast. I'm your host, Justin Esgar. With me always is my good friend. Podcast producer extraordinaire pirate, the man, the myth, the legend, Mr. Eric Anthony. We're talking about vendor management. We started, I'm assuming this is going to make, that part will make the pre-roll and we'll just carry it over or we'll just do some cool editing loopy loop things here. Yeah, vendor management's tough. Here's a great example of that, Mr. Anthony. When I need to find out who my new rep is at a vendor and I have to call on friends to figure out who it is because I can't manage those relationships. The amount of times I've called you about something at Ignite instead of my own rep or I've called the CSM for one of my clients who doesn't actually have Ignite through me.
They get it direct, but they're so large, they have a CSM and I will call my CSM and I'm probably, I'm not going to get in trouble. I'm not saying anything but to get something done and I go after vendors all the time. I pull every string true story about vendor management. I had a client just yesterday, two days ago, two days ago, had hosted QuickBooks with insert products here. I'm not going to say who because I don't want to blow up a nonprofit. And their servers were down and I was like, we need their data and got, we sent a ticket, we need the data. And they sent back being like, our server administrators are currently working on the situation, blah, blah, blah. And we wrote, no, no, no. You don't understand. We need the QuickBooks file, we need it now. And they didn't write back.
And so I called their support and I was just like a huge a-hole to the dude on the phone. I was like, and literally, if you're watching a YouTube, this will be a good graphic. Listen, you don't understand. They're going through an audit and if they don't get their data right now, they're not going to get their funding. And if they don't get their funding, you personally are going to be the one who's going to be responsible for 150 underprivileged girls who live in Harlem not being able to go to college. Do you want that on your conscious? And he's like, I'll get you the file within an hour.
And they did, by the way, and we canceled their service. Turns out they got breached. They didn't tell anyone. The whole vendor management thing is tough because one, a lot of the times we want to be nice to our vendors. We need them, we need our vendors to support us and do things like that. And at the same time, we hate all our, how many times have people complained about Kase is three-year contract? They don't do that anymore, but we still want to harp on that. Or even in our Facebook group here, facebook.com/groups/all things msp. Someone will go like, I'm thinking about using XYZ vendor and the amount of trollish bullshit that comes up. They struck, use these guys instead. Don't use them, use this. No, no, they're great. No, blah, blah. But the problem with the vendor management is it comes down to your ability to manage a relationship with a account manager who's also trying to manage their own life and having a job at that company, which may or may not be a good company or may not. You know what I mean? Yeah. There's so many factors involved and it makes me tired.
Eric Anthony:
I mean, vendor management's a thing, right? We've talked about it for a while, not necessarily us on this podcast, but in the industry it's been talked about a lot, especially in the last couple of years when we've been relating it to partner experience. The rest of the world is talking about customer experience on this side. When you're talking about vendor and vendor partners, you're talking about partner experience. And there are some companies that do it well and there are some companies that don't do it well. And it's a big divide and it makes a big difference when it comes to who you want to work with as a partner because it's a very different relationship when you're talking about a channel partner relationship rather than just a vendor customer or MSP client relationship, right? Because there's a lot more interaction normally and there's a lot more financial investment on both sides
Justin Esgar:
For sure. And the funny thing is you have to be able to maintain those relationships the same way you maintain your client's relationships. If you look at it like the ish flows in one direction, it goes from your client to you, to your vendor to their boss and so on and so forth. And somewhere along the line, it's Jeff Bezos. I don't know, I don't know where it ends, but I'm always guessing that Jeff Bezos, speaking of which, one of my favorite stories to tell about, and this is more customer success than anything else, but it could be applied here, is the way Tony Shui maybe rest in peace ran Zappos in the very beginning, which was no matter what position you're being hired for, you had to do three months on the phone support, like the customer service support and they pride their company when it first came out on customer support, if you called Zappos, which for those who dunno is a shoe company, and you were like, my toaster's broken.
They would try to help you and if you were the new CFO of Zappos, you spent the first three months on the phone trying to help some random old person with, I'm assuming they're role because they're calling Zappos about their toaster. But what that did was it helped build their culture internally to be customer service focused. And I honestly think that a lot of our vendors could take a page out of that book because the amount of times I've had an account manager who has left only to find out that they're working for another company doing account management stuff, great, you've learned the account management stuff, but are you acting in the best interest of that company by learning their culture? And then you run into that problem also. So there's too many Ps in the pod here for this because it's you, the MSP, the day you're having your client, the day they're having your account manager, the day they're having their boss, their boss's boss, their boss's boss boss, Eric, me, because obviously we're involved and you know what I mean? It gets heavy and it's understandable why a lot of people just flat out hate dealing with vendors.
Eric Anthony:
Yeah, yeah. And this is, compt has done a lot of research on this, and I just pulled this up while you were talking. The importance of good partner experience practices in choosing a vendor. So 35% say it's critical and by critical, they will only work with vendors that have a seamless partner experience.
Justin Esgar:
I'm down for that.
Eric Anthony:
57% say it's important, meaning they will accept minor deficiencies if the revenue opportunity is high, but only if the revenue opportunity is high.
Justin Esgar:
But that's not even a definitive, what's it mean that the revenue opportunity is high? If I resell Microsoft Office, the revenue isn't high. Where's the break point there?
Eric Anthony:
So my guess is that it's for me, if I was an MSP right now, I'd really want at least 35 to 50% markup if I'm just reselling a product. Now, obviously on labor different,
Justin Esgar:
That's different story. Yeah, okay, fine. I'm down with that. If 50%, yeah, I'll accept small deficiencies. If I'm still getting 35 to 50%
Eric Anthony:
Right,
Justin Esgar:
I'm fine with that. I'm okay.
Eric Anthony:
But that's 92% either think it's critical or important,
Justin Esgar:
Those other 8% are going to be out of business real fast.
Eric Anthony:
Well, they say it's a nice to have,
Justin Esgar:
What are they just managing their own ish and not worrying about it? Do they just think that everyone's, because I guarantee you the MSP that says it's a nice to have and then had to go deal with this hosted QuickBooks solution, what were they doing for the client? Their client must be so mad at them all the time.
Eric Anthony:
Well, and here's another interesting one, and this should really get the vendors to be worried about this. It says 50% of channel firms have dropped a vendor due to poor partner experience practices in the last two years. 50%.
Justin Esgar:
50%. So you're saying 50% of MSPs will drop a partner due to piss performance? Have
Eric Anthony:
Not, will have.
Justin Esgar:
We've dropped partners before, not because of performance, but just because of a lack of engagement from our own team. The thing is, I would only pick partners from the get go that I know have. I don't want to partner with the, I mean have in the past, but I don't want to partner with the newbies that are like, we're going to disrupt the, I don't know, accounting world wouldn't do that. I wouldn't do that to my client. Ashley, you know what? I've done that before. Years ago there was some new product, some new hot products on the market that basically allowed you to spin up your own private Dropbox. That's what they were advertising. Were Uber for Dropbox. And you remember back in the early 2010s when everyone's like, I'm the Uber of books. I'm the Uber of Snapple, I'm the Uber of whatever. That was their thing Anyway, and this, if you go look on Apple Consultants locator, if you look up our reviews, we have one star review and it's from a guy who I will take this, this is my fault.
I sold this product to them. The idea was that he had his own private Dropbox that we were managing. It was on their servers, so I don't know how it was any different than actually Dropbox except that we were able to brand it and do all these other things and do stuff like that and the product sucked and we got no support from them and nothing. And as soon as that guy was like, I don't want to work with you anymore. I went that client, I went to that vendor and I was like, I don't want to work with you anymore because it was just a crappy product.
But since then, I've only picked companies I know that have backing legs that stand on. We've talked about this before. I use Ignite. I resell Ignite a lot. Ignites not going anywhere. We use PAX eight. PAX eight ain't going anywhere. You know what I mean? We're not picking up. I don't even have anything on my desk to, I'm not backing the company that makes my little fake game boy over here. You know what I mean? I don't know. I can't get support. Weirdly though, this is the funny one is ubiquity. I was having a conversation with our productivity personnel, Fred, because we still don't have a title for him. And we were talking about Meraki the other day and I was showing him the Meraki parts and the difference because he's never done Meraki before. I was showing him the difference between an MX and MS and an MR Firewall switch and wireless and this Meraki switches are like crazy, stupid expensive.
And he's like, how do they get away with charging $5,000 for a 48 port switch and a license when you can buy the same thing from ubiquity for a thousand? And I said, call ubiquity for support. And he goes, oh, I got it. If you call Meraki and you type in your eight digit code, you got someone on the phone within 10 seconds. So ubiquity is the one that I think that I will bend on, and the only reason I will do that is because I have tech team members that are certified ubiquity. We know enough about them to get out of it, but no one's getting support from them. Well, that's the experience. All the other vendors, but it's the experience. Yeah.
All my other vendors, I'm very keen on vendor management because I'm very much being like, who do I need to talk to to get the same work? Great example is I'm working on a project right now and I'm thinking ignites the right solution for it. And I spent what, four days, five days calling you and we were going back and forth every two hours with updates, which by the way, that project might be happening, but that's because in that respect from that company, you're my vendor management guy for that. That interaction keeps me there. That's why you're good at what you do there. What keeps me here is seeing your pretty face every time we record. It's not vendor management only works together. It's a different
Eric Anthony:
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Justin Esgar:
But those are the kinds of things that I look for. I want my rep to understand who I am. I want my rep to understand my business, and I love talking to the reps who do the big PC stuff. Like we're back. We do things differently. I don't want a rep, I had a rep one time call me. He is like, oh, you're from the five towns. That's so cool. What was it like there? I'm like, are you kidding me? Dude, that's not No. First off, it's horrible. No.
Eric Anthony:
Well, they're trying to create that false relationship, right?
Justin Esgar:
Its false relationship. I don't want that. I want a real relationship.
Eric Anthony:
It's in the playbook for a lot of these companies, right? It's unfortunate, but it's true because you don't need to create fake relationship when you can create real relationship.
Justin Esgar:
Exactly.
Eric Anthony:
You were talking about picking a vendor. Vendor vetting is a huge thing and it's really important in fact. So we created this initiative at COMP T-S-C-C-F last year, and we actually went over it with people at Channel Con this year as well. We actually did some work on it and then presented it and the final product should be coming out here in the next month or so where we actually developed guidelines and kind of a checklist for vendor vetting. And it's not just around security because a lot of them are around security right now, making sure that you vet a vendor properly for security. It does include those components, but it also includes some of the business practice types of things that you need to make sure that you and your vendor are a good fit for each other before you go into a relationship where you're mutually reliant on each other.
Justin Esgar:
Yeah. I have stopped using a vendor when I found out that they got series F funding before, which for those who don't know, when you go for venture capitalism, venture capitalism, you go for venture capital. Sorry, when you go for venture capital, it is capitalism is what we're talking about. When you go for venture capital, your seed round is your first round and then you go and then every round after you add a letter and that's how much you get money for A, B, C, whatever. And you're supposed to be able to run your own business by, I think B is the golden rule. If you get to series B funding, you should be able to run your business and think. And if you're going to series F funding, that means you do not have a way of self-sustaining your business. And this was a pretty big vendor of ours, and we've since pulled all of our clients off that product and moved stuff around, not because didn't have a good experience with them. My rep is great. They hired a couple people who I heard about that I didn't particularly like, so I didn't care for those business decisions. But more so that when I found out about if they're taking series F funding, that means their product isn't moving in the direction I want it to move in, or the business isn't moving in the direction I need it to move in for me to feel comfortable as an MSP to recommend that product. You know what I mean? And so I was like, well, nice knowing you.
Eric Anthony:
Yeah, I think you're right. I mean, I think there's some exceptions to that. I mean, I think somebody who goes from series A to series F in a very short period of time, they're probably a rocket ship, which is the exception, not the rule. What you're describing is somebody who goes from series A to B2C to D to E, F over many, many years. Yes. That is an indicator to me that they are not able to produce enough cashflow to sustain much less grow. Now if they go from A to F in a year,
Justin Esgar:
Different story.
Eric Anthony:
It's a rocket ship.
Justin Esgar:
Yeah. The other thing is, and you mentioned on security, we will ask our vendors, unless they're super, super, super big, we will ask our vendors for a SOC two report and A-B-D-C-R report just to see if they have them. I wouldn't know what to do with them, but if they have them, because for those who don't know soc, I think sometimes it's called a SOC one type two or SOC two, depending on what part of the country you're from. It's like the difference between a soda and a pop is not a technical analysis, it's an accounting analysis of the organization in a securities perspective. And so if they have those things in place and they can get a SOC to which by the way, it's not easy to do, and I think a lot of MSPs should think about doing it for themselves. If they have $50,000 to spare, if the company has a SOC two report, it shows that they have been vetted by people who are innately smarter than I am.
And so usually I can trust on that fact. I know we use phone.com a lot for our VoIP, but I have the phone.com soc do report, and they do it every year. It's not like you get it once time, they have to do it every year. So I get that every year when I need it. But that tells me that phone.com is on top of their stuff. They're secure as much as you can be. Their accounting practices are in check that there's solidification within their business. And so that's also really big for me too. And then their BDCR report, backup, disaster continuity recovery, I think it's called where it's showing what's going to happen if they get breached. Well, and IRP is more for what they get breached, but the bdcr R is like how they're going to recover from that. How are they going to continue with the business if something happens? And if they have something written that means somebody there and it's continuously being updated, that means they have the team there that is working on that consistently, which shows me that's the forefront of their mind. So many SaaS companies are ready to just push their product to market and don't think what's the repercussions if something happens is the one you got to watch out.
Eric Anthony:
It's interesting, I had a discussion with Matt Lee from PAX eight probably last year. I think it was last year about this time maybe, or maybe a month or so ago, several. But we had a discussion about how much easier it is for new vendors to have that type of information because they've grown up in an era where BCDR matters. They've grown up without the technical debt that they have to go back and fix before they can be as secure as they should be. So it's really interesting when you start looking at, especially some of these older companies, that their technical debt is so large that it's very hard for them to comply with some of these newer things.
Justin Esgar:
And especially with, I mean we've talked about compliance before and so much changing in 20, and we will probably talk about compliance seven times over, I think. There we go. It's getting a little choppy. I'm not sure if it's near you. We've talked about this before. We've talked about compliance on past episodes and I'm sure we'll talk about it 14 times next year. But some of these older companies that need to stay on top of that, my look on it is if they have the staff to run with it and be on top of it, A okay at my book, you know what I mean?
Eric Anthony:
I mean teaser alert. By the way, we actually have a guest lined up, just not scheduled yet to talk about MSPs creating a compliance practice as part of their MSP. So that podcast should be coming up within the next, I would say the next 30 to 60 days.
Justin Esgar:
Or if you're listening to this next summer, it already happened and you have to go back an episode
Eric Anthony:
Well, but then you can just go find it and play it and find out how to add a co compliancy practice to your MSP.
Justin Esgar:
All things time traveling. Alright, so what I want from the audience is tell us in the Facebook group, facebook.com/group session, all things msp. You should know that by now. Tell us a vendor that you like. I don't want negative here. I want only positives. Okay? I know that's hard for some of you Keyboard warriors out there. Only positives. Tell us a vendor that you like and tell us why. What about that vendor? What about your interactions with that vendor? Do you like? Don't just straight up be like, I like Liquid Death because it tastes good. No, I like Liquid Death because it tastes good. They have really good marketing. My interactions with them are always fun and exciting. Something like that. I've never interacted with Liquid Death. Hashtag not a sponsor. Please be a sponsor. But yeah, tell us who you like, because like I said earlier, there's always been that should I go with this company or that company? And everyone gets all negative, I want only positive. Let's try and I don't know when this episode's coming out, but let's try for 2024 more positivity in the all things MSP Facebook group.
Eric Anthony:
There we go. That's what we've always strived for. Less drama.
Justin Esgar:
So actually, you know what, the way I want to end this with is you guys should try to be more like us and do better next time. That's Eric. I'm Justin. That's it from us. All the things MSP podcast, check us out facebook.com/group/all things msp youtube.com/at all things msp, follow us on your favorite podcasting programs like and subscribe on all of them. I don't care if you listen to us five times a day. It's fine. We need the numbers. Leave a review, leave a comment. DM Eric dmm. Justin, send us holiday gifts at Eric's PO box, which he'll put somewhere in the show notes. That's it. Bye.
Eric Anthony:
And once again, thank you very much to Super ops.ai for being today's podcast sponsor. From your host, Justin Esgar and myself, thank you for listening to the All Things MSP podcast. Join the All Things MSP Facebook group or follow us on LinkedIn, Instagram, and YouTube. The All Things MSP podcast is a biz POW LLC production. And even though we drink a lot of it, this podcast is still not sponsored by liquid debt.