Hyper-V & System Center Business is Booming & Lots of Service Providers are Missing It!

Ever wonder what happened to those people that stuck to their horses (quite literally) in the early 1890’s and refused to admit that the automobile was replacing their horse & cart construction biz?

I am getting LOTS of emails from businesses from around the world who are looking for Hyper-V consulting. I’m not really in that business so I cannot help – I work in the “channel” now, working with those companies that do the actual implementation work.

This surge in interest and emails to me had me thinking overnight … there must be a real shortage of quality in Hyper-V/System Center expertise around the world. The demand is out there, boosted by certain announcements last week, and it seems like some folks want to stick to making carriages while their customers are looking for some V6 goodness. The customer wants what they want, so they’ll go looking for it, and the local carpenter goes without work.

One of the things that many of these consulting companies miss out on is the potential of a Hyper-V sale. They make the mistake of comparing it to a VMware sale. If you sell VMware virtualisation, you go in, install it, do some P2V, leave and maybe come back in 2-3 years to get a license renewal. If you sell Hyper-V + System Center Management Suite (often the most economic way to buy/sell SysCtr) then the customer has rights to all of System Center across all of their VMs. You might implement VMM, DPM and some of OpsMgr initially. But after that, you can easily go back to the customer to talk about future possibilities, and find yourself involved in every IT project that happens in that site, even if it is outside of your core skills, e.g. you implemented backup/monitoring and they hire someone else to do CRM and needs … backup/monitoring! Or you install ConfigMgr for the servers, and now can expand it to the desktops, then add on Forefront Endpoint Protection services, and then find yourself doing moer and more higher value security work for that client.

If you are a consulting practice, what do you make your best margin on?

  • Hardware? You’re lucky to make between 9-13% in this competitive environment.
  • Software? Hah! If you sell 4 VMware hosts at $40K you might make $4000 in margin? Maybe VMware will throw you a bone in a finders fee? And then that’s the end of your consulting for that virtualisation-only deal with the customer. You’ve also blown that customer’s budget for the year. Whoops!
  • Services? Ah here we go! This is where you are making between $1,000 and $1,800 (if not more) per day from the customer for each person-day on their site – with very large margins. Take that $40K of VMware sales, and call it around $26K in System Center sales (I’ve already shown in the last few days that Hyper-V is free). After the virtualisation project, you’ve left the customer with $14K more in their budget (versus the VMware job). And you’ve left them with licensing for System Center. What do sales people like? They love having reasons to talk to their customer – and now they do because the customer has licensing and budget to deal with technology and business issues and you can target that $14K with services.

If you find yourself being that carpenter, and what to be the money making Hyper-V/System consulting practice then here’s a few ideas:

  • No business has ever made a cent without investment. Despite what you may think, you cannot become an expert in virtualisation and systems management overnight based on some experience with 1980’s email technology. Your staff have to be given the time and the budget to learn. You cannot get anywhere without this real business investment.
  • Anyone fighting the business plan needs to be dealt with. It’s fine to speak about a strategy out of one side of your mouth, it’s another to actually do what’s required.
  • Sales & marketing staff must be trained. They are not too busy. Are you more concerned about selling horse carts in the next few weeks or having a sustainable business over the next 5+ years?
  • You cannot expect all consultants to become all things to all people. Divide them up and train each person on 1 or two things. For example, person A might learn Hyper-V and DPM. Person B might learn DPM and VMM. Person C might learn VMM and OpsMgr. Person D might learn OpsMgr and Hyper-V. You’ve spread the skills, allowing everyone time to learn, and given coverage to products in case someone is unavailable. Let them develop those skills on courses, in labs, and in certifications.
  • You will need to hire in skills. Someone has to have an overall view of the technologies.
  • Start the path of obtaining virtualisation and systems management competencies through the Microsoft Partner Network. This requires effort from consultants and Sales. You will not get a competency overnight – you do need past experience with customer satisfaction surveys.
  • Sales and marketing need to promote the service. The work is out there, but sales do not normally come knocking on your door. Here’s where you need to stretch. You may have a core market that you’ve sold to up to now, but the fact that they’ve been happy buying ancient crap from you up to now should tell you something. Find a new customer base. That requires some of that investment and buy-in from the relevant sales/marketing staff.
  • You may have to start small to prove yourself and develop a reputation. You may have to challenge old decision making rules. You may need to reach out to new strategic business partners to add expertise that is outside of your core business.

My inbox proves the work is out there. The ability to penetrate a customer site with virtualisation, and then expand into systems management and security beyond virtualisation seems like an obvious benefit of doing Hyper-V based services. By selling Hyper-V/System Center versus the alternative, you also are changing how the customer spends their budget with you: instead of selling lots of low margin software, you are selling less low margin software and more high value services. Finally: you’ll also have a business.

5 thoughts on “Hyper-V & System Center Business is Booming & Lots of Service Providers are Missing It!”

  1. There are ecosystem products out there for VMware as well. The likes of Veeam cover some of the functionality that the System Centre suite provides, and a virtualisation project with VMware is not necessarily “put in a bunch of servers and P2V existing infrastructure”. It can also be the perfect opportunity to push an Exchange upgrade, upgrade domain, upgrade network infrastructure, talk about storage needs etc etc. There is no reason why you couldn’t bundle SCOM/SCCM/SCSM with a VMware project. Really it is just another skillset. I’m sure VMware consultants have more than just a VMware implementation skillset, just as you have a System Centre + Hyper-V skillset. The real skill is offering customers both options, push them both on their own merits and make an informed decision on what fits the customers’ needs best. We can all play along together nicely on this one.

    1. Indeed, SysCtr + Veeam can manage VMware. But I’m not seeing it happen, just like I’m seeing lots of illegally licensed VMware installations.

  2. We’re seeing the same thing. And we note a profound lack of Hyper-V Skills with some big integrators. “Why would we, who uses that?” used to be their statement. But by now customers are demanding it and they have a skills gap. A big one. They also have a hard time letting go of their favorite cash cow combo of Storage Vendor A + Hyper Visor Vendor B + Blades Vendor C for one. It’s easy for them as they’ve been doing for years and the margins are (used to be) there. How do they normally change? Profit margin! Give them a better margin on another vendor and they change so fast that is becomes a bit sickening to the customers they sold the best solution to a month before and that is now being called second rate. They follow the money.
    They like services for the money but they don’t like the effort involved it seems. People don’t scale as well and it takes more effort to generate a revenue based on ever evolving skills. But we’ve seen the end of the big profits on hardware sales for the past decade now so it is till amazing to see they don’t let go of that approach. So that % of money is still important to them. Don’t tell me a service engineer can’t possibly learn about servers from two or three vendors let alone the solution architects. Another issue might be what I already wrote about in the blog post The do’s and don’ts when engaging consultants Part II (http://workinghardinit.wordpress.com/2010/02/11/the-dos-and-donts-when-engaging-consultants-part-ii/) “A lot of businesses lie when they say their personnel are their biggest capital or most important asset. They hate the fact that they are dependent on specific people and skill sets. It’s way too risky and expensive. They want to modularize people like parts of a car. If it’s broken, replace it with an identical one. The other reason is that talent doesn’t scale very well. This is quite normal, people just don’t scale. Talent needs to be cultivated and that takes time and effort. Performing complex tasks to produce high quality results takes talent. This makes things expensive as availability to talent is limited and thus growth is stalled.
    So we’re in trouble here. We can’t attract enough talent and the bean counters insist on reproducible identical drones (“Human Resources”), which is impossible to achieve. So the solution consultancy firms come up with is the misuse of methodologies as a religion. They create guide lines, methodologies, scripts etc. You see, one way people try to scale talent is by creating a cookbook the “less talented” to follow. But books don’t make an excellent cook! This is because talent cannot be methodized completely. This is a farce. In the end it leads to mediocre firms, run by mediocre people producing mediocre products.” I.e. we’ve created a solution now we’ll only sell that solution.

  3. Their horses (quite literally) in the early 1990’s?? You must have been watching Back to the Future 3 = 1990 + Horses.

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