The Technology Assurance Group (TAG) is a little difficult to define in a sentence. It’s part educator, part business coach, part buyers group, part financial analyst, part technology consultant and part marketing resource, and I am sure I have left some parts out. What I do know is that members seem to get a lot out of being a part of the organization.
I recently attended their 20th annual convention in Dallas, where I watched dealers, resellers and solutions providers engage in a four-day-long event focused on best practices, new solutions, accelerating sales, improving EBITDA, and new strategic partnerships. Whether it was cloud providers or cybersecurity firms, TAG’s technology provider-partners wanted to work with dealers and resellers to sell their products and services, and even train dealers to support and maintain those products and services on their own. We also heard some great insights from the finance crowd, who discussed M&A in the post-COVID era.
There are plenty of vendors that want to lend you a helping hand
The event included not only breakout learning sessions and workshops, an awards dinner, and networking events (Top Golf!), but also a vendor showcase exhibit hall. It was in that vendor showcase that cloud solutions dominated. TAG talks about a path to earning 37% EBITDA and cloud is a critical piece of that journey. BTA dealers take note: the cloud might be a threat to print in general, but it’s actually an opportunity for print dealers. The people who would traditionally buy print are also prime targets for cloud solutions. And since you’ve spent years or even decades earning their trust and helping them improve their business, you should have no problem getting their ear to hear about new ways you can help to optimize their business.
But selling and managing cloud solutions is a lot different than selling copiers. The conversations are different. The pricing and business model is different. The technology is very different. So, while you’ve got the attention and trust of your customers, you might not have the skills or know-how to talk about and deliver cloud solutions.
One of the vendors in the exhibit hall that I visited was Sherweb. They describe themselves as an all-in-one cloud marketplace, offering partners a full-fledged cloud management platform. They partner with IT providers to help them modernize their business. The company has three models: White label, co-branded, and Advisor. White-label partners are MSPs or VARs that own the entire customer relationship, from billing the customer to providing technical support. The co-branded program is similar, except the solution is branded as Sherweb’s product, and Sherweb can help you provide customer support. The Advisor program is suited for IT providers with little or no experience selling cloud solutions. In this case, you act as an agent for Sherweb — collecting a one-time fee, plus monthly recurring commissions for the life of that contract — and they handle everything else.
The tiered levels of engagement offer a unique, tailored approach. It allows your dealership to gain expertise as you transform your business. You can start as an advisor to get the business off the ground, then invest more later to take on more responsibilities — and make more money.
And as your customers continue their digitization journey, they will need the right tools and partners to defend themselves from cybersecurity threats. This too is very different than selling copiers. But there are players in this space as well that want to help dealers launch their cybersecurity practice. ConnectWise is already well known to the BTA channel and is a key TAG partner that was at the event, but another TAG partner I visited was WatchGuard, a network security, multifactor authentication, secure Wi-Fi, and endpoint security solutions provider.
WatchGuard has a security-as-a-service program through TAG, which rolls all the hardware and subscriptions into a single SKU. It’s a points program, and dealers get quarterly rebates from WatchGuard depending on performance. There are no quotas or minimums, so dealers who are just getting their feet wet can learn without dealing with the anxiety of losing a certain status.
Many dealers are actively buying MSPs right now and without your own private (and expensive!) consultant, quality information is difficult to obtain. But TAG has been consulting on acquisitions for years and has collected extensive know-how and benchmarks to help guide their members. During one of the breakout sessions, Tim Shatz from TAG discussed the finer points of M&A, including how much you should and shouldn’t be paying for a company, and some best practices for buying or selling your business.
As a rule of thumb, businesses should sell for two to seven times the EBITDA. That’s a pretty wide delta, but Shatz explained that there is a good reason. Everything from the structure of the deal — cash upfront versus payments over time — to the size of the company being acquired, to the number of customers they have (and how that revenue is distributed across the customer base) and several other factors can push those multiples up or down.
But the price is not the only important factor. The session also included Steve Cochran, CTO of ConnectWise, who reminded everyone that due diligence isn’t just for accounting. Doing your due diligence as it relates to cybersecurity is very, very important. Cochran shared a horror story about a company that acquired a business that had already been breached. Upon integrating the two companies, the malware spread into the purchasing company. “There were 33 waves of attacks over the course of four months,” said Cochran.
Where do we go from here?
The print industry is at a crucial crossroads. It’s not going to disappear tomorrow, and a good many dealers are going to continue to make a lot of money selling print. But print will not be the core business for many for much longer. Fortunately, there are a myriad of ways to evolve and you don’t have to do it alone. TAG showed just how varied the options are and reiterated the importance of having a good partner that can walk beside you and support you in the process.
Patricia Ames is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.