What Does ICT Channel Consolidation Mean for Businesses?

There was a time when IT was IT and telecom was telecom. The two existed in different technological infrastructures and different sales channels. Over time, however, IT and telecom have come closer and closer together as the internet and the cloud take over.

This means businesses don’t just buy IT services or telecom services now. Unless you’re still running a PSTN-based phone system and don’t use the internet, your business technology is dependent on the internet and your operations are at least partially in the cloud.

As a result, providers have had to adapt to best serve customers. Telecom providers have started offering networking, for example, and managed services providers (MSPs) have been forced to consider offering voice in order to keep up. This convergence of technologies and offerings has led some bigger vendors to consolidate services into bundles. For the business customer, this consolidation has plenty of ramifications.

IT and Telecom Convergence – a Hotly Debated Future

Depending on who you talk to, telecom agents and MSPs will either a) soon be one and the same, or b) remain forevermore in different lanes. As with most extreme debates, the reality is probably somewhere in between.

Especially considering security, MSPs face a variety of concerns including growing and morphing threats, increasing complexity in compliance, and convergence of vendors. This means many MSPs are consolidating into larger providers that offer complete services – enabling customers like you to get everything in one place.

Meanwhile, companies like App Smart are seeking to empower these moves by acting like investment firms, making acquisitions and acquiring MSPs and distributors to create consolidated offerings.

This convergence of the information and communication technology (ICT) channel may or may not be the ultimate future form for telecom and MSPs, but it is happening for some, so customers need to consider both the good and the bad of buying consolidated services.

Channel Consolidation for Businesses – the Good 

Like any innovation, consolidation has been driven by increased competition. As agents and MSPs alike try to set themselves apart, sometimes the result is a consolidated offering that puts services such as voice communication and managed IT under one roof, which can lead to better delivery for end users and fewer vendors to deal with.

In addition, with fewer cogs in the system, these agents and MSPs can more efficiently create bundled systems that work seamlessly together. Seamless interaction of systems is always a laudable goal, and it’s certainly made easier when resources aren’t obfuscated by the gap between separate companies.

All this can lead to a great customer experience for businesses like yours and potentially for your customers, which is crucial in today’s marketplace.

Channel Consolidation for Businesses – the Bad

Consolidation means change, and change is already a major factor in technology in today’s market. Every time a business or individual has to adjust to a new service – whether it's consolidated or not – business is disrupted. Changing how systems work can be confusing for users and slow processes down, while a new environment complicates decision making.

Meanwhile, consolidating services means being tied to one company for many vital services. If that company were to go out of business, get sold, or even just fail to satisfy the customer, that customer could be without a wide variety of services. With a more modular approach, telecom or IT pieces can be replaced without necessarily disrupting the whole system – as long as they can integrate with other pieces.

All this having been said, it’s not always up to the end-user whether services get combined, especially as larger companies swallow up smaller providers. In a best-case scenario, two services the customer already uses merge, meaning a more streamlined experience with minimal disruption. Worst case, mergers cause key competitors to go out of business, leaving customers with no choice but to fall in with a consolidated technology provider that may or may not fit the bill.

How MSPs Can Guide Buyers to Make the Right Decision

The decision to combine telecom with MSP services or keep them separate ultimately comes down to each customer’s needs. While convergence is happening, there are still business models that need traditional MSPs to handle services, separate from the hands-off model of a telecom agent.

Some customers will benefit greatly from the innovation and sleek convenience of an under-one-roof solution like SD-WAN bundled with hosted voice and video. Others might need the depth of knowledge a specialist brings to the table.

MSPs can guide buyers to make the right decision, as long as they consider the customer’s needs first. For some smart MSPs, this may mean partnering or merging with telecom agents, other providers, or even other MSPs to offer bundled services. For some, it may mean offering only one piece of the puzzle.

At the end of the day, your needs as a business customer should be number one. Whether you invest time and money into moving services to a consolidated provider or not, your providers should have your best interest at heart. If you’re looking for a switch and want unbiased advice about the path that will work best for you, contact Xceptional now and find out how we can make it easy.

By Natalie

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