The Changing Landscape For SMB IT Consultants

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When Microsoft announced that it will provide free or cheap support for Windows and Office and common computer problems, it wasn’t a surprise for any IT consultant who’s been paying attention.

This is a look behind the scenes, some thoughts about the trends that are changing the landscape for IT consultants.


WHAT HAS CHANGED

Four things are combining to recast the traditional roles for small business IT consultants.

  • Technology is easier to deploy and maintain. In particular, cloud services have virtually no traditional costs for deployment or maintenance. There will be fewer and fewer on-premise server deployments as cloud solutions mature.
  • Users are getting smarter. Everyone, even the crusty senior partner in the corner office, has been a computer user for ten years. You don’t need much help to set up a networked printer or upgrade the firmware on your iPad or unbox a new computer. The people entering the work force from now on will have grown up with computers and won’t need individual help for much of anything at all.
  • Devices are interchangeable. Or, as I put it a few months ago, computers are like ballpoint pens. You’re not going to pay a consultant for a few hours of work to restore your carefully customized computer from a backup for much longer – not when you can replace your desktop computer for well under a thousand dollars and start working almost immediately by connecting to documents stored online and starting up hosted services in a browser. A consultant can’t add much value when your programs and data are online, accessible from whatever cheap device you pick up.
  • Tech support can be outsourced. With the brilliant Genius Bars, Apple showed how tech support could be delivered in shopping malls. Microsoft is proposing to put you in touch with trained support technicians 24×7, 365 days/year for free or cheap help. There is still value in a long-term relationship with a knowledgeable consultant but perhaps not for day-to-day issues that can be handled as well by an online chat window. After all, Microsoft doesn’t have to provide tech support employees who are brilliant; it just needs to supply people who are good enough. And if it’s not Microsoft, it will be someone else.


ENTERPRISES

To be clear, I’m focused on small and medium businesses (SMB), which have very different IT needs than large companies. Enterprises would hire coders to develop in-house custom software; there would be fleets of network administrators, each with specialized knowledge of some piece of the network infrastructure; and help desk staff would sit in cubicles in the basement dealing with forgotten passwords and disconnected printers. Life with IT in big companies is changing as much or more than for SMB – but that’s a different discussion.


SMB CONSULTING – PAST

Very small businesses have traditionally relied on outside IT consultants for three primary functions:

  • Purchasing and setting up hardware. Consulting companies were always geographically close to their clients and would earn decent profits selling servers and workstations, printers, monitors, network gear, and peripherals. Those days are completely behind us. There is no money in selling hardware now. When I purchase hardware and deliver it to my clients, it is only as a convenience. The client could buy the same hardware for the same price and receive it just as quickly without me, and I make close to nothing on the transaction.
  • Setting up networks and deploying line of business software. Very small businesses will pay to have this done for a while to come but even onsite deployments are getting easier to accomplish – and therefore less profitable. The trend, of course, is deployment of cloud services that require almost no setup.
  • Fixing things when they break. That was the core business of almost every outside tech person for years: break/fix work for an hourly fee. That’s not going away either but many of the same forces are making it less important and less profitable as well.

Consultants for medium-sized businesses began to see limits in the break-fix model some years ago and moved to managed services – remote monitoring and management of servers and workstations typically provided under a maintenance contract at a fixed monthly cost.

Very small businesses are slow to incur fixed costs and tend to run a few years behind the technology curve at bigger companies. The move to managed services is only now underway at businesses with a server or two and 1-20 workstations. That’s what has driven me to offer two inexpensive managed services: Bruceb Remote Management for monitoring and supervised installation of patches and updates for system utilities; and Bruceb Cloud Backup for monitored online backups.

Ten years ago I was kept busy doing the work required by a couple of dozen offices and perhaps fifty workstations. Everything fell in my lap – patches and updates, software upgrades, new hardware, backup problems, malware. Today I’m managing two or three times as many businesses and hundreds of workstations, but that’s not quite as exciting as it sounds: I’m not three times as busy and I’m not making three times as much money. Instead, each business and each device takes less of my time every year. It will take a while but before too long there won’t be much to manage onsite.

Consulting companies serving medium-sized companies are already seeing the other side of that curve. Expensive maintenance contracts ($100-150/month per workstation) are harder to sell every year when the cost of the equipment is dropping and users need less help to make things work. A lot of consulting companies will go out of business in the next 1-3 years because they won’t be able to find a replacement business model.


SMB CONSULTING – FUTURE

In the next article, I’ll go through some of the reasons that you will still call me for a few years to come! I hope.