author of Mir.report
The Future of Work
The world of technology consulting is changing. When I opened my data consulting practice several years ago, I discovered that the model for sales in consulting has changed dramatically over the past decade. Take any sector of IT and there are thousands of software vendors. The world of IT has simply become:
- too specialized
- too fragmented
- too on-demand
As a result, traditional sales models, with long sales cycles and scoping conversations, have become inefficient in conveying the value to decision makers across small/medium-sized organizations (and sometimes even enterprise). We have first seen this in SaaS–now we are seeing the same in consulting. As a consequence, many consulting firms have turned to temporary staffing as a bridge to traditional consulting model. The bridge, however, is proving to be short-lived. The market has become too saturated with companies promising experts, when there are none.
What’s the solution?
There is now a new breed of start-ups funded by the likes of Andreessen Horowitz, Redpoint Ventures, and Greylock who are betting that there is an opportunity in creating a two-sided marketplace. I agree that this might be the right model for expert-advisory companies such as GLG/Guidepoint, however I believe that this is the wrong model for the middle of the market Service Integrators (ISVs/VARs/SIs/MSPs)–by some estimates, a trillion dollar market in its own right.
Two-sided marketplaces are the wrong model for middle of the market Service Integrators (ISVs/VARs/SIs/MSPs).
I think the real solution requires completely rethinking the modern distribution channels, starting with the role of:
- event conferences
- non-IaaS software vendor partners
- research authorities (e.g. Gartner)
Essentially I see that consulting distribution needs a solution in many ways similar to what O’Reilly Media did for technical publishing: pick a side and stick to it. What this means is going to change over time. Initially I believe this is about Data Intelligence and Sales Automation. But a better way to summarize this is: whoever delivers “conversations” to consulting firms, will be the one to solve distribution problem for them. And right now there is not a channel that successfully does this.
What’s the market?
Let’s take Big Data service providers as an example. This is the world that I come from and it is also the largest market now–with AI/ML/Analytics making up just a subset of this large market.
Imagine a pyramid with just a handful of large firms at the bottom. These are the types of firms that will get a big chunk of the $200 billion-plus market in Big Data, yada yada yada. The top of this pyramid is very crowded with the typical Internet start-ups–Upwork (old eLance/oDesk) been most notable of them all from a marketing perspective, but relatively insignificant from the revenue perspective.
What’s interesting is who will win over the sweet middle? IT consulting used to have a simple, large-scale model: a few large firms provided large-scale contracts to a small number of big companies in traditional industries. They served the GM’s of the world on behalf of the Cisco’s of the world. Business was very sound.
However, these days contracts are increasingly won by mid-market. AWS, Azure, GCP have thousands of SI partners. These SIs employ anywhere from a few people to thousands. Satisfying this market is where I see the real opportunity.
Do you have opinions on this subject? I would love to hear from you.