Be In The Know: The Managed Service Provider Journey

Over the last two months, I’ve had the opportunity to interview a plethora of managed service providers (MSPs) and MSP platform vendors across the US, Europe, and Asia. The experience has provided me with an inside view into the fastest-growing technology channel today, but it has also provided me with a clear understanding of the evolutionary path MSPs must take as they attempt to reach a new level of maturity (and profitability). 

For those tech vendors hoping to cash in on the budding billion-dollar managed service opportunity, it is critical to first understand where the movement began in order to understand where it is headed. The figure below (from my most recent report, Managed Service Providers, Part 1) highlights the three unique stages of MSP development:


  1. Past (pre-1997): solution provider model. Up until the end of the 1990s, SMBs employed their own internal IT systems, supported by a small IT staff or local consultant. They purchased from and had their IT systems installed by VARs, and got their phone systems from telecommunications providers. An IT solution provider (most often the VAR or consultant) provided reactive break-fix support and maintenance for their hardware and software. For SMBs, this model represented a heavy capital investment (capex) for their IT systems and a heavy operating expense (opex) for labor, all executed on-site.
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The Digital Sales Inflection Point: Online Sales Surpass Branch In The US

With all the focus and hype around mobile and payments, one major trend surfaced that has as much impact on financial service companies as anything mobile. In 2011 for the first time, consumers who opened financial products opened more of those products through digital channels (online and mobile) then they opened in a branch. 

Every year, Forrester surveys North American consumers and asks them about the products they purchased/opened in the previous 12 months and the channels they used to research and apply for the those products. In 2011 across products including checking, credit cards, mortgages, insurance and investments, 37% of US online adults that opened a product opened that product online with another 2% that opened via mobile. This compares with 36% who applied in a branch. These percentages are up significantly from 2010 where 32% applied online and 40% in a branch. The percentages for Canada are less for digital, but we expect those numbers to continue in the digital direction with the focus Canadian banks are putting on digital sales.

So why the big move?  In general more products were opened in 2011. In the US in 2011, 38% of online adults opened a product versus 32% in 2010. Other reasons for the move in digital sales include:

  • More digital bankers. Survey data has consistently shown that online bankers, mobile bakers and bill payers are more likely to apply through digital channels then those who are not digitally savvy. Those groups continue to grow. In fact, Bank of America announced today that they reached 10 million mobile bankers.
  • Greater familiarity. Applying for financial products online is no longer a new activity. Most consumers have opened at least one financial product online at this point. 
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Innovative Methodology: Incorporating Location Analytics Into Your Research


This shouldn’t come as a surprise, but I love talking about cool, emerging, and innovative research methodologies. Over the past two years, I have been focusing a lot of my time on researching these techniques and have written several blog posts on this topic. For example, how prediction markets can help determine which concepts will succeed or fail in the marketplace. And how 2012 is the year of mobile, and market insights (MI) professionals need to leverage this channel.

In continuing with this theme, I am launching a blog series focused exclusively on highlighting emerging methodologies that MI professionals should take notice of and examine whether to incorporate into their research tool kit. I will highlight any cool research techniques I come across, as well as any vendors that are building interesting technology tools for market research purposes. 

For this inaugural post, I will highlight location analytics. Essentially, market insights professionals can use a consumer’s location information that is transmitted by their mobile phone to understand what they are doing in their daily lives. For example, you can understand where your target customer is shopping, how she got there, and which competitor stores she drove past. The consumers being tracked do not have to “check in” every place they go to gather this information. Instead, all of the location data is passively collected after a consumer opts in.

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Apple's Coming Plan To Take Over The TV Business

Last week, we released our newest report about the future of TV and argued in it and the accompanying blog post that the battle for the TV is not really about TV. It’s about the future of the platform giants like Apple, Google, and Microsoft that want to add the TV to their platform ambitions. Surprising to some was our claim that Microsoft was in the lead in the US TV platform battle with its base of millions of Xbox 360 owners generating more online video views on the TV screen than viewers of any other device. Many have challenged this assertion, putting the data about current use aside and asking a good question:

Won’t Apple easily walk away with the TV business once it releases its next big thing, presumably a TV?

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Bet On Always Addressability Now, Not Later

I read some  deceptively warm and fuzzy advertising riding on the subway this morning courtesy of our nation's top soft drink manufacturers. Together they have reduced calories of drinks in US schools by 88% by offering more low- and no-calorie options. "Gee," I thought, "I'd like to learn more." So as I exited the subway, I took out my phone and searched "no calorie soft drinks." The top link broke the spell; an article on msn exposing the same risks that no calorie drinks have of their sugary cousins.  My first thought was, "Well that isn't any better for our nation's children." My second was, "What the #$&?! Do these companies take me for a complete fool? Don't they know that I have the world's knowledge at my fingertips??" Apparently not.

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Selling Luxury Goods To Online Shoppers In China

We just published a report on the online luxury shopper in China, Selling Luxury Goods To Online Shoppers In China. The report looks at the demographic of the online luxury shopper in China and the nature of the online luxury marketplace in China — it also provides advice for brands looking to succeed in this rapidly evolving market.

In this report we note that:

Like all categories online in China, luxury is growing rapidly. According to the World Luxury Association, China is currently the second largest luxury market in the world — it is already clear that part of the demand is coming from online shoppers. In the past few years, a number of the world’s most elite brands have gone online in China. Going online now with a strategic approach will be key to securing long-term market share. 

There are many types of luxury shoppers in China. The online luxury shopper in China spans multiple income brackets and age ranges and lives in both tier 1 and tier 2 cities. Success in this space will mean being considerate of what each of these shoppers is looking for. 

The needs of the luxury shoppers with the most purchasing power are not being met.While a handful of luxury brands have gone live in China with localized sites, today’s online luxury experience is rarely compelling. Additionally, domestic online retailers primarily target online shoppers looking for a deal, with few websites offering sophisticated interfaces. In this report, we look at what is and isn’t being done and what changes will offer the luxury shopper a satisfying online experience.

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Outside In: The Power Of Putting Customers At The Center Of Your Business

Customer experience is, quite simply, how your customers perceive their interactions with your company. In Forrester’s soon-to-publish book, Outside In, Harley Manning and I show that customer experience is a fundamental business driver and — in an age when customers have access to vast amounts of data about your company and its competitors — it’s also the only sustainable source of competitive advantage.

In most industries, customer experience is the greatest untapped source of decreased costs. Fidelity Investments recently spent a modest $20,000 to fix a problem that made it difficult for customers to log into their accounts through the company’s automated phone system. This single fix saves Fidelity $4 million a year by averting calls to customer service. And it’s just one of more than 160 projects that came through Fidelity’s experience improvement system in 2011. Together those projects account for more than $24 million in annual savings.

Customer experience also drives increased revenue. Several years ago, B2B technology reseller and service provider CDW added a question to the customer survey it fields: “What additional things would you like to talk to your sales team about?” The company funneled the answers to this new question to the appropriate account managers. The account managers, in turn, closed the loop by getting back to the customers with a simple message: You told us that you have a need, we’d like to offer you something that could meet that need. And guess what? Customers took the CDW sales reps up on it. This seemingly simple innovation drove more than $200 million in incremental revenue in just one year.

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Announcing Outside In, The Latest Book From Forrester And The Topic Of Our Upcoming Forum In New York

Since October, I've been heads down on a big project. We're all delighted that the project is now at a point where we can talk about it publicly.

It's Forrester's next book, titled Outside In: The Power of Putting Customers at the Center of Your Business. You'll be hearing a lot about it in the coming weeks, both from me and from my co-author Kerry Bodine. And if you want to see what the cover looks like, it's already online here and here.

Although the book won't be available to the general public until August 28th, attendees of our Customer Experience Forum at the end of June will get digital copies of the manuscript.  They'll also hear keynote speeches from some of the people who appear in the book, like Kevin Peters, the president of Office Depot North America; Laura Evans, chief experience officer at The Washington Post; and Laurie Tucker, senior vice president of corporate marketing at FedEx.

If you'd like to get a preview of some of the concepts in the book, check out the video below — and then stay tuned for more announcements!


Where Does Commerce Technology Investment Stand Today?

As customer behavior continues to evolve, and digital channels become ever more important to businesses, eBusiness budgets have been steadily rising since 2008. In 2010, the average company invested $34.4 million on their customer-facing online presence, and the average mobile and social spending both passed the $2 million per year mark. There has also strong growth is spending in eCommerce technology, with nearly two-thirds of eBusiness professionals citing an increase in eCommerce technology investment in 2011.

So where do firms stand today? Help us find out by taking our latest eBusiness & Channel Strategy Panel Survey on eBusiness budgets and commerce technology investment. It will take only about 10-15 minutes to complete. We invite Forrester clients and non-clients alike to participate in the survey. For non-clients, as a thank you for completing the survey you will be given a choice of one of three complimentary Forrester reports.

I really appreciate your help in understanding the state of eBusiness budgets and spending and we look forward to putting that research together for you. 

Click here to take the eBusiness survey

We're Hiring: Analyst Serving eBusiness & Channel Strategy, Amsterdam Or London

We're looking for a new analyst or senior analyst to join our eBusiness and channel strategy team, based in either Amsterdam or London. We're looking for someone with an analytical mind, good communication skills (listening, not just talking!), strong views on the impact of digital technologies on eBusiness and channel strategy, and experience of the complexities of retail financial services and of different European markets to help our clients make great business decisions and shape their firms' strategies. 

If this sounds like you, or like someone you know, please contact me at or see the full details in the job description.