Unlock the secrets of modern IT channel partnerships with Philip Wegner, the CEO of TechGrid. Discover how his remarkable journey from the telecommunications sector to founding TechGrid shaped his understanding of the evolving IT landscape. Philip shares how the limitations of traditional infrastructures fueled his ambition to create a groundbreaking platform for the digital age, revealing the essential role of digital transformation in the channel model.
Explore the nuances of shifting from a product-centric to a customer-centric approach, with a focus on real-time tracking, special pricing, and seamless integration across multiple tiers. Philip unpacks the challenges vendors face in standardizing operations and the critical importance of API-first frameworks in simplifying reseller and MSP processes. Drawing parallels to consumer expectations, he emphasizes the need for efficiency and immediacy in B2B transactions, urging industry professionals to embrace these changes for enhanced customer experiences.
Philip shared the link to the summary of the API Mandate sent out by Bezos.
Philip's LinkedIn Profile
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Hello, welcome and thank you for tuning into to Channel Voices, the podcast for future channel leaders, where we learn the ins and outs of partner ecosystems through casual conversations with channel professionals from a variety of industries, partner types and geographies. My name is Maciek and I'm your host, philip Wegner. Welcome to Channel Voices.
Philip:Good to be here. Thanks for having me.
Maciej:Thanks for joining me for this episode. As we typically kick this off, can you please introduce yourself briefly, tell us a little bit about your channel background and we'll take it from there.
Philip:Sure, yeah, so I'm CEO of TechGrid. I also run a product which is a chief product officer, but I've been in the IT channel for basically my entire career. I started in telco, if you remember, back in the C-LAC days, when people use that terminology. That's kind of how I got my career started. And then I started a VAR in 2006, and we were doing like large scale networking schools and hospitals, airports back in the day when people were scared of wifi schools and hospitals, airports back in the day when people were scared of Wi-Fi and so we were putting in networks in schools, hospitals, airports and things like that. And I ran that company for 15, 16 years, made it an MSP and then, as I was running that company, I started building software and that software is what became TechGrid today. And so today I'm just CEO of TechGrid and we're a software company.
Maciej:Great stuff. So you've run a partner company, you've partnered with vendors, you brought their products to the market, your additional services, et cetera. That's great background to have, obviously, etc. That's great background to have, obviously. But can you tell us what spurred the idea of tech grid and maybe you describe it a little bit? You know, what does tech grid do?
Philip:yeah. So I mean I guess we have time to talk about, so I'll go in a little bit more detail. So the story is, um, when I was running my uh var business and I was a var and an msp, we evolved into that. I think that's your natural progression is you start reselling and then you build services around it and then you support whatever it is that you're providing. And AWS had come out, if you remember. They came on the scene really quickly and I started thinking about could we provide a network and make it seem like more like an AWS type experience where our customers could log into a portal, they could buy a network like a physical network and go into a building. And we tried to build this.
Philip:And so I started investing in software many years ago as the MSP and I was trying to build this customer portal and which is funny that we're talking about connectivity and stuff in the channel because what I was trying to just do is, hey, I just want to have a modern customer experience. I mean, that's what our customers are asking. I joke a lot because I had customers that would call and say hey, man, I can track all my toilet paper online when I order it and I'm buying like a million dollars from you and you can't even tell me where my stuff is. You know, and. And so it got me down this path where I was trying to build a customer interface that was modern and a modern customer experience.
Philip:And at the time I was building it on top of, you know, psa software, like connect wise. I tried to build it on top of, like Salesforce, you know, at HubSpot, some of these other systems, and I spent three years and lots of money trying to build that kind of interface. And finally my team said there's no way we're going to build a modern experience on the current infrastructure, if you will, in the industry. And my one of my guys said poor guy, he was like we're going to have to build it and I was like you are out of your effing mind, like there's no way we should ever do anything like that. That's the dumbest thing that I've ever heard.
Maciej:Ground up right.
Philip:Yeah, exactly, I'm like that's too big, we can't do that, john, like that would be insane for us to try to do that. And that's what we ended up doing, because we ended up starting to build that kind of that middle layer infrastructure to provide the modern experience to the customer.
Maciej:Perfect. Thank you for that.
Maciej:And as we are on that subject of connecting the dots, or even to put it into perspective connecting the channel as a whole digitally, into perspective connecting the channel as a whole digitally, like from your perspective and you and you know you mentioned aws how quickly they came onto the market. They revolutionized marketplaces per se from your perspective, like the digital transformation do you believe it has? I, I think it has reshaped the traditional IT channel model as we know it. But in your eyes, like, how radically did it reshape that model? And, as of today, do we really have a connected channel?
Philip:No, we do not, and so I actually would argue that we do not have a digitally connected channel in the current model today, and I think that the people that work in the channel should be scared shitless. That it's not, because if you look at what's happened with around AWS and Azure, we saw them come on the scene and it's felt like overnight they were this huge success. But if you go back and read books on Bezos and Amazon and how they operated internally, there's a famous letter that Bezos wrote to his team. I don't know if you know about this letter, but there's a letter that's like of folklore where he emailed his internal team and this is obviously everybody inside Amazon and he said we are going to communicate digitally from team to team and even if we are going to communicate digitally from team to team, and even if you're working in one organization versus another part of the organization, you will communicate digitally via APIs and if you don't, you won't work here anymore. I mean, it was a very like. There's a. It was like a seven point famous letter that he wrote to his internal team. Now, he could do that because that, because it was his company and it was everybody inside his organization and they had gotten so much mass, they could enforce that with the other companies that they'd worked with.
Philip:And the problem with the IT channel is nobody can enforce that. Nobody can like say, hey HPE and hey Cisco and hey, we're all going to work together, it's going to be open API frameworks and we're all going to communicate digitally. But the reason it should scare us is because Amazon is already doing this and a lot of these experiences that we see oh, it's really cool that they can tell me within a two-hour window when my toilet paper is going to be at my house. That's really, really great. But you have to think about why can they do that? And it's because Bezos enforced this 15 or 20 years ago, where he said this is how we're going to do it. And these modern experiences can only be built whenever there's digital connectivity inside the channel.
Maciej:Interesting. I have not heard about that letter. I'll email it to you. I'll forward it to you. I'll do. Thank you, I'd love a quick read. I understand what's being said in that letter from what you said. It would be interesting to see the tone in which it was communicated.
Philip:Well, he has a very strong personality, so it was enforcing.
Maciej:I bet, and interestingly enough, the company I worked at previously was bringing to the market software testing tools. But the mantra of the company was always API first, yes, right, yes. And it really kind of translates to what we're talking about right now. Yeah about it, right now, right. If you design your software, your platforms, whatever it may be, with API first, I mean, it brings your software to a completely different level. Right, because now you can integrate, you can communicate, et cetera. So the partner ecosystem is changing, right, and it's growing more complex than ever.
Philip:Yes.
Maciej:What strategies do you think that vendors should be thinking of or starting to apply, and maybe even distributors in particular? Yeah, yeah, if they wanted to expand, you know, build and expand their partner networks like, what type of strategies should they be deploying?
Philip:Well, I think, contextually, just to talk about where the investment's been made right, the investment's been made so far with API frameworks. They've been made on the product side, and so a lot of these companies, whether it's Cisco or HPE or Fortnite or whatever they've invested heavily and done a good job at the API frameworks inside their products and they've got a cloud where you can essentially access that data, which is really really great. What you and I are talking about just contextually is really important. We're talking about the business, the business of providing the network to the customer, and when you're thinking about that, you've got to get out of this like it's my product mindset and you've got to get into this. What's the customer experience going to look like if we don't connect the ecosystem together? And what the customers are demanding is they're demanding as a service models. They're demanding hey, I want to consume this in whatever format I want to. I want to know real time the status of all my stuff.
Philip:What's so amazing is there's so many companies in the industry that are selling technology products to customers and they're not able to provide basic information like tracking on products and licensing in real time, and so it's this backend infrastructure that's running the IT channel that I would argue where we need to focus APIs and digital connectivity.
Philip:Whatever your customers do and I'm talking about the resellers and the actual business customers they need to have this mindset of starting with the customer and then working their way backwards, and that entire connectivity between the business customer buying something, the reseller that's selling it to them and then the partner ecosystem that's supporting the VARs and the MSPs that are selling to the customers that entire chain needs to be digitally connected. And so I know you and I are speaking, you guys, you and I think the same way, because I know what you do for a living. Yeah, and we're talking about how do we digitally like it's things like non-standard pricing, like we're emailing people and calling and it's just like that's right, this doesn't work, like it needs to be a button. Hey, I have a million dollars in stuff. What's my price? So it's just taking all these different things and digitizing all the functions that happen inside the channel is what we're after.
Maciej:And that brings me to the question. So there are so many platforms, there's so much technology available today. There are vendors like us that provide PRM solutions. There's all types of companies that have a product on the market to help vendors to communicate and do business with partners and vice versa. Very few of them, in my opinion, can connect a two-tier channel. A lot of them can do one tier and they can do it quite well. The two-tier channel. A lot of them can do one tier Right and they can do it quite well. The two-tier is where there is a bit of a struggle, from what I can see.
Philip:Yes.
Maciej:But from all of these different things that are available today, how else can the vendors specifically make their channels more digitally connected? The vendors specifically make their channels more digitally connected Because, in terms of the deregistrations, grabbing content, understanding what their earnings are, right, you talked about the special pricing. Some of that stuff may already exist in some of those systems, but maybe not to the extent that you guys do at TechGrid. Yeah, but what else would you suggest?
Philip:Well, I think it's a holistic approach in thinking about the functions that need to take place and how we digitize those functions. Okay, so we talk a lot in the industry with acronyms and things like that. We talk about ERP systems and PSA software and PRM software and all that stuff is all that's good, but we actually have to get down to what's the function that we need to provide. So if it's special pricing, that needs to work like an app on an iPhone where I press a button and I get special pricing back, and so you have to go, you have to take these kind of like microservices, if you will, and then figure out how can we digitize these things. And the problem just to explain why this is so freaking hard and why you have a business and I have a business as well why we're in the same kind of like thing is digitizing the channel.
Philip:It's because if Ingram Micro or TD Cinex has 1700 manufacturers, every single one of those vendors are thinking about their own kind of world. Hey, let me build my own coding system, let me build my own coding system, let me build my own partner program, let me build my own custom portal. And as that compounds, you have all this complexity, and what everybody needs to understand is that the customer doesn't give a shit about all the specs and things anymore. Really, they just want to buy a solution, and so that means that the VAR, the MSP, is buying six different solutions from different people and then they're packaging all those together with their services and then they're selling the customer a network or they're selling them a unified communication system or whatever. And so we have to think about how are we going to make it easier for the frontline, which are the resellers, the MSPs, to serve the customer.
Philip:And the answer is API first, frameworks being able to standardize, essentially things like quote formatting. Like if I email you a quote in PDF, what do you do with that? How are you going to give that to your customer? I think your insight there, with the we're good at one tier, but we're not good at two tiers is really important, because if you just email it to me in PDF, how do I convert that over to something else? So there's all these things that we have to address, and we almost need, like this cross-functional SWAT team, you know in the industry that's working on all these different companies, to bring it together and make it happen.
Maciej:Yeah, and it's crazy, as just regular consumers we are so used to just, you know, tap something on the iPhone and you know it happens, Whether it's buying something off of Amazon and straight away getting the confirmation, and the tracking is available. I mean, it's the same type of experience that we expect now in B2B, right? So, coming back to that example of special pricing, if I want special pricing, if I click that button, I want a result to be returned within seconds rather than you know. Okay, wait, somebody has to go and look at it. Our SLA is 48 hours for this and we'll come back to you on email.
Philip:But think about it tactically. It's really that transaction itself and let's unpack a little bit. So what ends up happening is a bill of materials gets built by a manufacturer. That bill of materials gets emailed or sent to the sales rep. Usually the company or the VAR is using Salesforce as an example to build that, and then they're sending that over to HPE let's say that also uses Salesforce and so the sales rep on the other end is hanging that in into Salesforce and then doing the deal registration in the traditional kind of process. That's absolutely insane. All those systems need to be digitally connected together or we need to manage some. We use some sort of PRM software. All that stuff needs to happen in real time and doesn't need to have all these humans kind of handling it, and then you could spend more time working with customers and working on things that actually matter than this kind of paperwork tracing it back and forth.
Maciej:No, I couldn't agree. More. Automation APIs, right, I mean, all of that is here and has been here for quite some time. But now AI, machine learning these are the new kids on the block, if you will, right, and AI especially, I mean it comes in such a huge wave like nothing we've ever seen before. Pretty much every company on earth today is deploying AI in some shape or form into their products. How do you foresee that these technologies are going to change the future of the channel?
Philip:I think, built on the right platform, it's going to transform the channel. But I need to unpack that just for a second. If I go to ChatGPT and I put in some inputs, it's useful and it's helpful. But what makes AI really good is when you can apply it inside of a digital workflow. And so if I can digitize things like we're talking about due registration and things like that, or maybe it's bill of materials generation, which is where our team spends a lot of time I've got an engineer that's expensive, spending a lot of time building bills and materials If I can standardize the inputs for that engineer let's say we're selling a network and these are the inputs I can actually use AI to produce the initial bill of materials, and that's actually where I think a lot of it's going to be, is going to be useful and so, and so my, my, my point is AI is great, but it's really great when you apply it inside of a digital workflow.
Philip:That's when you get this business transforming functionality and in the channel, where a lot of times the margins tend to be shrinking, if you can digitize workflows and then apply AI, you now have one human that can do 10 times the work using digital workflows with AI and I believe, and that's 100% what's going to happen in the channel and the companies that are transforming, I believe are going to be really profitable. And I think the traditional companies that are quoting in spreadsheets and a lot of companies still doing this and Word documents and all that, I think they're going to have a tough time in the future.
Maciej:I can absolutely relate to that because majority of the conversations that I have in my current role with people who run the channel or are just about to embark on the on the journey of starting this go-to-market strategy, they all talk about. You know we need to make it easy for partners to do business with us. Right ease of doing business is pretty much number one because a there's customer all the way down to the end user right, Not just partner, but there's customer satisfaction Right and there is partner satisfaction and the ease of doing business also drives that loyalty to a given vendor right 100% agree.
Maciej:Because the easier it is for me to do business with you. Yes, because the easier it is for me to do business with you. Ideally, I spent more time on the platform that you provided to me so I can order things of you for my set of customers, right, so you stay top of mind if it's easy to do business with you. And sometimes it is even more important for the partner that is doing business than the actual margin Right, because they can multiply it. They get their profit either way, right, but it's very interesting and I think it's of huge importance. So having that AI piece being built into those digital processes, that would definitely help with ease of doing business, right?
Philip:Well, I 100% agree and I think your point earlier about understanding the two-tiered nature of the channel is important and I think a lot of us, even when you're with a distributor, for example, they'll say the customer.
Philip:And they'll say, hey, I'm working with the customer and I'm like do you mean the actual business customer or do you mean the reseller? And most of the time they mean the MSP or the VAR that's selling to the customer, and that's how their mind has been wired because that's been their customer for, you know, 40 years. And I think to your point. You have to get all the way through, map the entire process all the way to the actual customer. That's the business buying the technology right, that's the end customer, if you will. And then you have to look at the areas of friction all the way through the sales and fulfillment process. How do I sell this thing in an all digital way? How do I fulfill this thing in an all digital way? And then you have to solve all those challenges for how you digitize that entire workflow all the way to the actual business.
Maciej:And we can complicate it a little bit further as well, please, because when a partner goes and tries to set up a solution for a customer and they know that the core product is with company X, but they also do have an alliance partnership with company Y and it makes sense to buy the two things together, yeah, not only it's the partner to vendor and backwards, but also the vendor to vendor, right?
Philip:There's an additional piece of complexity where the vendor needs to speak with the other vendor speak, communicate digitally right, because that's what we want to achieve so the way, the way that we think about the world and this is just from my running of our uh for 15 years is we think about what we refer to internally as a service provider team, and our concept is and, by the way, the name TechGrid and all that came from this idea that technology becomes a utility over time. So, if you like, when we provided Wi-Fi and people were scared of it, you know that was only like a three or four. You know that was only like four years or so where people were scared of it. And then, once people used it, they're like, oh, we got to have this, and then it became more like a utility, right, and then they have to have it. And today, in 2024, your point of sale system is running over Wi-Fi, your entertainment is over Wi-Fi. So it literally is a utility.
Philip:And if it is a utility, that means all the companies that are involved in providing that are service providers. So the frontline company is the service provider. They're not a VAR, they're not MSP, they're a service provider. They provide internet service via WAN and LAN to a business customer. And then all the partners HPE, Fortinet, checkpoint all these different companies are working to support that service provider as they're supporting the customer. That's the way that we kind of view the world, so we view it more like service provider teams. And so I agree that there comes a point where you got to say we're going to work together, not in different, 15 different systems, we're going to collaborate together so that the business customer gets that service.
Maciej:Yeah, apart from AI, which is obviously here to stay and moving so fast, are there any innovation that you foresee that's going to further enhance that digital connectivity within the channel?
Philip:Well, I think the first step, before anything else can happen, is digital connectivity. That's step one. We have to digitally connect the channel, which is really hilarious that we even have this conversation because it's the IT channel. We're the industry that sells networking products to businesses and we're not digitally connected. So it's hilarious that we even have to have this conversation. But that's like that's number one. I have to digitally connect the channel.
Philip:The second thing that you have to have is you have to have digital workflows, or a digital framework, if you will, that allows you to sell and fulfill to the customer and I'm talking about the business customer with the uh, with the service provider, the VAR or whatever. That entire framework kind of has to be digitized. And then the third step is you apply AI to everything. You have digital connectivity, you have workflow software and then AI changes everything, because then I can automatically place orders with vendors, I can automatically do special pricing, I can automatically special pricing, I can automatically, I can write a statement of work for a customer in software, I can create a bill of materials using AI. And so I think we just have to get it right in steps, with step one being digital connectivity.
Maciej:Right. If you were to give advice to anyone who is starting that journey to digitally connect their partner ecosystem and make sure that it is future-proof and it will definitely result in success, what advice would you give them?
Philip:It probably depends on the type of company and what they're selling. As to the advice, when it comes to a software business, that's a digital product, that would be one workflow of how you would get all the way to the customer. But I would just think about how can we build that all the way to the customer. I'll tell you a little story, a sidebar. When we first started talking about this digital connectivity internally, I was like because I thought it was dumb for us to even try to do anything like this. We first built this on a, we drew it on a whiteboard. I was like, okay, if we could actually digitally connect the channel, what would that actually look like? And it was a. We have a. We have a big kind of idea room upstairs in this building and we had 40 feet of whiteboard space and we we worded it all the way, all the way across the 40 feet.
Philip:It was all the different steps to get all the way to the customer in a digital way. And then that 40 page or 40 foot whiteboard went into a 10 page workflow document where we actually took all the different stages and we mapped it out in a workflow document and that's what we took and converted it into actually business software. And how do we digitally connect all these different systems together? And I think each manufacturer or each ISV has got to map that out for themselves. How are we going to go from hey, we're selling it to the channel all the way to the customer's interface where they're buying their product online in some sort of form, and then they have to solve all those things with the resellers that are selling their product?
Maciej:Perfect, as you're talking through this, and I'm just thinking from the portfolio of my customers alone. Yes, majority run on Salesforce, that's kind of you know, yes, it is the number one CRM out there, but there are plenty of other CRMs as well within that customer base. So when you're talking about designing those processes, regardless whether from vendor or from a distributor perspective, you have to be agnostic in terms of you know what are you going to be integrating with.
Philip:I 100% agree. I 100% agree and I can riff on that for a second. Some of the old software, if you will, and I'm talking about the stuff that was built in the nineties and early two thousands they were. They were designing all in one software. Hey, I'm going to, I'm going to build everything. So I'm not going to mention any names cause we're recording live. But there's a lot of these, there's a lot of these software systems out there where they developed a suite of stuff and then and and most of the suite is kind of like average or it's you know it sucks in some form or whatever, which is where salesforce came from, because there was a lot of these older erp systems that didn't have rms and they took it to the cloud and you know, and binoff made a you know, a enormous company out of it, um, and so I think we have to.
Philip:So that's what. So my point is, one approach is an all-in-one software approach. The other approach is what I would call the platform approach, and the platform approach is Shopify. In Shopify, they have kind of this core functionality that operates inside the platform, and then they have 10,000 apps in the App Store that you can customize your Shopify experience with, and that is what the industry needs. And so, if you look at what, well, what is Shopify? Well, they built a commerce kind of framework and then they built an API, first architecture, like we've been talking about, and then everything else is best in breed.
Philip:Hey, I want to use this payment gateway. Hey, I want to use this marketing platform. Hey, I want to plug this into HubSpot. Hey, I want to plug this into Salesforce. And so building that kind of core functionality and then allowing people to customize, I believe is what our industry needs. And so, once you connect things together in this platform kind of way, you're letting each VAR MSP. They're using like 30 to 40 different tools and a lot of times they don't even talk to each other, so they're putting stuff in Salesforce over here and then they're using a different CPQ system, a configure price code software, over here, and they don't even have connectivity between their own internal systems.
Maciej:Yeah, it is crazy, but I'm glad that you talked to that point and expanded on it a little bit more, because it is of huge importance. I mean, systems change and they can change overnight, like with those big ones. Obviously they're massive projects if you need to Right, if you need to change from one to another, because there's so much data in those. But those decisions are being made on at least annual basis, right. As companies deploy certain systems, they continuously re-evaluate whether it is was it the right decision to deploy this, right, and is there anything else out in the market? And gone are the days of reach out to me and I'll tell you all about our software. Everyone's doing that online and everyone comes to the table very educated, right, right, so we can be here all day, I think, and we're still going to have so much more to talk.
Philip:Yeah, sure.
Maciej:Because there's plenty, plenty to unpack and very, very interesting subject that has a lot of future, and only future will tell us whether we can actually connect the channel digitally, right? The one question I always ask of every guest on this podcast what is the one thing you wish you knew before you started your career in channel?
Philip:Well, I mean, if I could go back and talk to my young self, I would talk about, I would, I would tell myself the importance of development, and I mean self-development and I'm big into like reading you know all the books you know about self-help and things like that or just really like developing in your career.
Philip:And I think if you work in technology, you have to evolve and you have to change, and I think it's funny that we're that we're even talking about this in technology as well. But I just, I just believe that I would, I would tell myself to read as much as you can, develop as much as you can, learn as much as you can, because that really controls your career trajectory. I actually studied youth ministry in college and so I don't have a technology background. So like literally and here I am running a software company, you know. So I, you know I didn't have the background, but I was. I was essentially self taught and taught by other people as I, as I kind of grew up. So if I was young, I would probably try to find somebody to help me develop and then, if I couldn't find that, I would read as much as I possibly could and then I would develop myself even faster than I did.
Maciej:Fantastic. Thank you very much for sharing that with us. And, on that note, Philip, thank you so very much for coming onto the show introducing TechGrid to us and also speaking from your experience and what you see out in the market in terms of digitally connecting the IT channel Very valuable insights. Appreciate you coming on. Thank you, you really enjoyed it. Thank you for tuning into this episode of Channel Voices. I hope you enjoyed today's conversation and gained valuable insights. If you found this or any of our episodes helpful, please consider supporting the podcast by visiting channelvoicescom and clicking on support the podcast. You can also just visit the link in this episode's description. Your support helps keep these conversations going and allows us to continue bringing you more expert insights from channel professionals around the world. Don't forget to subscribe, rate and leave a review on your favorite podcast platform. Every bit helps us grow and reach more future channel leaders like you. Thanks again and we'll catch you in the next episode.