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Are European VARs or MSPs different from those in North American?

Not really… The European IT channel is going through the same challenges, although there seems to be a delay of about nine to twelve months between the two continents. Businesses in Europe seem to be more affected by the currency exchange rates as it can dramatically affect pricing. When combined with the uncertainty in the EU community and the recent overwhelming refugee situation facing Europe, it is clear that they do have a unique set of issues.

At our recent VARTrends event in the UK, I had the chance to speak with many VARs and MSPs. If I had to sum up my first impression with just a few words it would be “They approach the business with a healthy dose of skepticism, but very open to new ideas”.

They are definitely embracing the recurring revenue business model but not to the degree as in North America. They understand business processes quite well and get the message of streamlining to deliver managed services and Cloud solutions. They do want to make a bigger, better and stronger business.

European VARs and MSPs are skeptical when it comes to the Cloud. This probably stems from their end-user clients being very skeptical. Companies are simply not ready to bet the farm on the Cloud because of its data security challenges. Their approach is to take it much slower, remain calm and carry on business as usual. They do understand that Cloud can be more cost-effective, but when the risk to data security is considered, it seems much less attractive. Even Microsoft looks like it is predicting a growth of traditional license product by 17%. In short, on-premise is nowhere near its end. Hardware sales are still very strong.

For these reasons, European VARs may be able to take some more time to transition their business into a recurring revenue business model, than their peers in North America. Europeans believe in training their teams and improving their skills. They invest heavily in education and motivating their staff. While they are still challenged to work more ON their business instead of IN their business, they do seem to make more time to improve their business.

Interestingly, European VARs seems to be less likely to expand their business beyond their local regions and even less into other countries. On the North American side, VARs and MSPs are more likely to sell outside of their local markets and into other countries. I also found that European VARs seem to invest more time to research a wider variety of solutions before recommending the right one for their clients. They will actually try harder to find the best solution to fit their client.

There is one thing that the North American VARs could learn from their European peers. Their social networking skills are outstanding. They take time to get to know people and their clients. They have a personal approach that fosters deeper relationships. It is not all about the business. I think this personal communications and relationship-building attitude is something that we can all learn to do better on this side of the pond. It requires a lot of entertainment value to get and keep the attention of most VARs in North America. In Europe a pub with beer flowing is good enough to keep everyone happy for hours!

I do not have enough data to back this up, but from what I have seen so far, it looks like European MSPs are selling managed services at much higher margins. If they could leverage a cost-effective NOC, they could make much more profits than North American MSPs. Maybe it is a lack in competition or the fact that operating a business in Europe is more expensive than in North America, but it seems like they do believe in a higher margin service.

One VAR summed it up for me. He said that there is so much noise in the channel that is difficult to hear the voices that you really need to hear. Everyone is selling something and claims to have the best product at the best price. He reassured me that our approach was refreshing because it was low on the sales pitches and high on the brand-neutral content that he could use to improve his business. He said he was skeptical at first, but he now sees how VAROfficeSuite fits in to his plans. We still have a way to go but it looks like we are moving in the right direction.

As I dive deeper into the VARs and MSPs across Europe and compare with North America, I am finding that there are many more similarities than differences. I really like the British attitude towards business, their staff and life in general. Cheerio to my new friends!

Julian Lee