Today, a large share of organizations operate with multiple unified communication as a service (UCaaS) vendors, coupled with a plethora of other apps and tools. This type of fragmentation is both a blessing – because many companies require it to meet new demands or reach new customers – and a curse, for the companies themselves, and for managed service providers (MSPs) and value-added resellers (VARs).
End-user companies essentially pay a ‘fragmentation tax’ on the complexity of their environment, while MSPs and VARs are forced to find ways to accommodate the complexity while also minimizing its appearance, cost, and burden.
What’s driving fragmentation?
Roughly half of organizations are operating a fragmented unified communications (UC) environment, and there are many reasons why this has come about. The transition from on-premises solutions – or even multiple on-premises solutions – to the cloud is among them. So too was the scramble to adapt to remote and hybrid working, forcing companies to move quickly without as much consideration for integration. Mergers and acquisitions have also historically been a driver for fragmentation.
Let’s not forget a crucial reason, though: best of breed. No single vendor can meet all of an organization’s needs. Different departments may require different functionality, and niche solutions are likely to help only those with niche problems. Most organizations, therefore, must build up a suite of different applications to meet the needs – and address the problems – across the whole of their business.
The blessing is that with best-of-breed solutions, companies can excel in certain areas. The curse is that fragmented systems lack integration, which disrupts workflows and massively decreases overall performance. It’s also an administrative burden, with companies expressing frustration with managing multiple platforms, billing systems, and support contracts.
Why does fragmentation matter for MSPs and VARs?
The fragmentation of UC and other applications means that for MSPs and VARs, the traditional single-vendor strategy is no longer a viable approach. By aligning too closely with one vendor, both VARs and MSPs risk being replaced due to their inability to accommodate the diverse needs of their customers. Customers expect their suppliers to support their needs and chosen platforms, and when you don’t, your customers will start to seek a partner who can.
In an environment where customers want more, vendor lock-in is also a risk that can compress margins. Single-vendor strategies create a dependency that’s burdensome, leaving MSPs and VARs vulnerable to changes in their vendor contracts or price increases that are beyond their control. If your company is only aligned to one of the ‘big players’, then you’re effectively at their whim.
The complexity of the multiple applications also places additional burdens on MSPs and VARs, driving up operational costs and reducing margins. To support a customer who uses Zoom for meetings, Teams for internal chat, and Webex for a call center, for example, a VAR must hire, train, and certify staff on multiple platforms. This drastically increases operational cost. Likewise, an MSP must now troubleshoot and fix issues across multiple systems. This reduces the efficiency of management and pushes up the cost when those systems aren’t integrated into a unified platform.
Moving forward with choice and simplicity
MSPs and VARs have a choice: they can be skeptical in the face of fragmentation, wait for the trend to pass, and bury their head in the sand, or they can be agnostic – capable of working with whatever comes their way and with whatever their customers need. By taking a vendor-agnostic approach, VARs and MSPs can embrace the change while effectively carving out a lucrative niche within the market.
Taking an approach like this helps to retain customers because they’re not going to shop around for more flexibility: you provide enough for them already. It can also help to protect margins from compression as it lets MSPs, VARs, and their customers change vendors if they create less favorable terms.
Comms complexity causes knottiness for MSPs and VARs, but they can minimize that with the use of single-pane-of-glass management tools that can simultaneously monitor and report on the performance of multiple UCaaS and collaboration tools. This allows VARs and MSPs to meet any customer requirements without having to become a direct partner with every single vendor or train staff on their many platforms.
Ultimately, once VARs and MSPs have taken the new approach and invested in UC management platforms that span multiple vendors, they can start to position themselves as integration consultants – much more than simply resellers or managers. This is what the data shows companies want, too.
Research from Cavell and CallTower highlights that, for companies of all sizes, when they operate multi-vendor environments, they overwhelmingly want to purchase from (and work with) a single provider. They want best-of-breed functionality, and they want it from one best-of-breed partner.
MSPs and VARs that can accommodate the fragmentation of communications will succeed, where those who shy away from it will struggle. But simplifying the complexity internal to their organizations, without passing it on to customers, is a precondition of success.
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