CIAOPS Podcast–Episode 32

In this episode I speak with Mark Giles from Phrixus Technologies about the challenges of marketing an SMB technology business. We discuss what has worked and what hasn’t when it comes to marketing spend and return on investment. There are plenty of great insights from Mark about the experiences he has had over the years and how he has been able to develop the successful results into real business benefit. If you want to know what marketing options really work, this is the episode for you.


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What did you do for SBS?

I see a lot of emotional reactions out there for the demise of SBS. I see statements like ‘this decision from Microsoft has ruined my whole business’ to which my immediate comment would be ‘so you are telling me you based your WHOLE business around a SINGLE product from a SINGLE supplier WITHOUT contingency?’. However, the more I look at the reactions the more I ask ‘If SBS was so important to you what did you do for SBS?”’.


Good business is a relationship, it can’t all be one sided and many who are claiming they have been ignored by Microsoft have in fact been exactly the opposite. For example:


– Have you actively participated in the many SBS user groups all over the world? Have you more than passively attended and sucked free information from presenters and other attendees? Have you offered to help run the group? Help doing presentations? Shared your knowledge with others? Networked with others from the group outside the normal meetings?


– Have you sat the SBS certifications exams? They have been around since 2003 days. Doing so provides a good indication to Microsoft of how people are serious about the product. It also helps Microsoft and customers ensure they are working with resellers who at least know something about the product.


– Have you blogged about SBS? Have you actively participated in forums? Have you again provided information rather than simply passively vacuuming everything up and using for your own business benefit? Have you helped create build wikis? Knowledge bases on the product?


– If you haven’t written about SBS have you supported those who do? Have you comments on their blogs? Said thank you for all the hard and largely unpaid work they do? Have you supported the publications that these people have created? Do you read their blog? Their Twitter stream? Have you even sent an email just saying ‘thanks’?


– Have you attended conferences and events that focus on SBS? Have you listened to webinars on the product? Have you bought books and other material about SBS? Have you tried to network with your peers doing SBS, share ideas and best practices?


– Have you even told anyone at Microsoft how good SBS is? How much it means to your business? Have you provided constructive criticism or feedback on the product to make it better? Have you shared you experiences from the field with customers to make the product better?


My experience has been that a very small group of people did a hell of lot to support the SBS product. They deserve recognition for getting it this far but without wide spread support from resellers what other choice does Microsoft have? Let me illustrate.


The average SBS install is say 15 licenses. Thus Microsoft makes money when a resellers sells these 15 licenses. But hang on, they only do so on average every 3 years when an SBS system is upgraded. They also typically make less on these licenses as they are bought via OEM (i.e. with the hardware). In the 3 years between SBS upgrades what revenue does Microsoft get? I’d say they get zip but they still need to support the product, provided patches, updates and service packs as well as be working on newer versions. That all costs money.


In all honesty the reseller is the one that makes the money in an SBS transaction. They make some on hardware, they make some on SBS, they make some on other software, they make some on migration, installation, setup and configuration. They typically also continue to money as an managed services provider (MSP) by charging the client a monthly fee to maintain everything. On balance the reseller makes a great deal out of SBS over its typical 3 year life but REALLY what does Microsoft get? Once the volumes of pure SBS sales drop below a certain point Microsoft really has no other option but to can the product. That point obviously came recently.


Does this mean resellers IT skills are suddenly null and void? No. Does this mean SBS can’t be bought tomorrow? No. Does this mean SBS won’t be support for the foreseeable future? No. Does this mean that there are no other options in the IT landscape to suit the need? No.


What it means is that the disruptive effect of the Internet is now reaching IT providers. It has gone through the music industry, news and print media, entertainment and so on. Did you really think that the IT industry was immune from such changes? As I mentioned back in 2008 blog post on the death of SBS


you know what? Clients don’t care about SBS, they care about ‘their stuff’. They simply want access to it. It is the IT resellers job to provide a solution, how it is done really doesn’t matter to the customer. I was initially quite taken aback by the comments of Paul Thurrott which basically said SBS didn’t have any fans it simply had resellers making money from the product. However, upon reflection I can see his point (as I mentioned above). Client’s want simple. They don’t want complexity. Most technology is complex and SBS is one of the most complex products Microsoft made.


It seems to me that most resellers lament the loss on an onsite Exchange server, which is what most use SBS for. Most reseller deride SharePoint and Companyweb labelling it irrelevant and unused by clients. Even if that is the case (which I don’t agree with anyway) guess what? That is part of SBS and guess what? Even if you never use it you need to update it as it is part of the SBS package. I can’t tell you the number of updates that have blown up SharePoint Foundation 2010 on SBS when PSCONFIG is run of late for no consistent reason. You want a challenge? Try and recover an SBS installation that has a bad PSCONFIG update.


Again, too much complexity. Resellers are demanding more and more features be integrated into SBS. It just can’t be done within the limitations of SBS. Many have stretched SBS well beyond what its initial purpose was and that is testament to the product but you simply can’t keep doing this forever and keep the price down. Because you know what? IT is becoming a commodity and customers can’t see the value in paying for large server installation with lots of RAM and disk space all up front when they face an uncertain business future.


Sure this is painful. Sure this mean many need to retool and retrain. It will mean some may not make the transition. However, I honestly don’t believe that you can claim to run a business if you don’t have a contingency. I’ll bet you tell clients not to have backups, but you don’t have a backup business plan? How is that helping your customers and let alone you if you don’t?


As the as the famous quote from Edmund Burke mentions – ‘all that is necessary for evil to triumph is for good men to do nothing’. For those who claim Microsoft has ruined their business by killing I simply ask, what have you (and those around you) done for SBS up to this point?


An announcement on the Official Microsoft Small Business Server blog that the current version of SBS (2011) will be the last cannot be allowed to pass without comment I believe. This is going to be a long post so hang in there as I share some thoughts.


Firstly, I have to congratulate Microsoft on providing such a fantastic product that has lasted so long. According to the Wikipedia article, the initial version of SBS (4.0) was released on the 22nd of October 1997. I am proud to say that I have been involved since day one with the product and have been lucky enough to generate a living from the product over many of those years. For that I thank Microsoft.


I however want to turn my attention to the reaction I have seen from many resellers who are bemoaning the demise of SBS and their cries that Microsoft is not listening to them and the SMB market place. In all honesty, I think it is these resellers who have it completely back to front in that it has been them who have not been listening.


Back in May 2008 I wrote this post:


which spoke of SBS 2008 being what I considered the last version. Rereading the article, I found this a little prophetic:


“I can’t see that in another 5 years we’ll have SBS 2013. I’m sorry, but I think it will be gone.”


Back then I saw the EBS server as an option but that is also gone, however the gist is still as valid today as it was back then.


“You have either to move up market with EBS (which will be tough for one man bands) or embrace “cloud computing” (but if everything works right why do customers need you?)”


I have spoken before about the concept of having to specialize or upscale.


I also found this article about SBS Essentials from 2 years ago that I posted:


Again, an interesting observation was:


3. If you are a reseller and you haven’t started learning about Microsoft online services a.k.a. BPOS well here is what Steve Ballmer recently told partners at the Microsoft world wide partner conference:
“If you don’t want to move to the cloud, then we’re not your company.”

I cannot therefore understand how ANYONE can be surprised by the demise of SBS as we know it. The writing has been on the wall for a long time, problem is most have chosen to ignore it.


Let’s look at some reasons as I see it.


A. SBS is Microsoft’s most complex product sold to the least technical and qualified audience (SMB). It is range of products such as Exchange, SharePoint, ISA (when it was on there) and so on, all crammed into a single server. That means compromises had to be made pure and simple. That also mean when update were made things broke. That’s what happens when you have complex devices, the chances of problems is much greater.


This also mean that SBS was out on it’s own in regards to development. I know for example that SharePoint is not supported on a domain controller or on Exchange server EXCEPT on SBS. So if it isn’t every except on SBS isn’t that going to spell problems? Sure is and this was the case will all products on SBS.


B. The technological landscape has changed. Sure cloud computing isn’t all that’s it’s cracked up to be and online services still can’t totally replace all on premises installations but guess what? The trend is that they will. Broadband link speeds are improving. Cloud based technologies are advancing so rapidly now that there soon won’t be anything that isn’t possible via the cloud.


I remember when SBS 4.0 came out. I was a Novell guy. Novell even had a small business server style offering that I considered for many clients but guess what? I looked past the immediate technical deficiencies of SBS 4.0 and believed that it would wind up being the product more greatly adopted. Luckily I was right. The same applies here, you have to look at the overall trend and not be blinked into what you BELIEVE is happening here and now.


I will also point out to those who point to low broadband speeds being a limiting factor for cloud adoption, I’ll bet you don’t remember having to get SBS 4.0 running with a 33KBps dial up modem? SBS survived that and prospered in the early days of broadband, the stage we are at now with the connections to the cloud is no different to my mind. The connection speeds are only going to improve.


C. The customer landscape has changed. Most customers work outside a traditional office now. They have employees and contractors all over the world, working at all different time and on all different devices. Their expectation of computing is now as a utility, they want to pay a monthly fee for exactly what they use.


Most business owners I speak with DON’T want servers. They DON’T to pay upfront for technology and most also DON’T want IT providers. Why? In short most have gotten screwed by IT providers who were no ‘professional’ enough. Much of the sour reactions to the demise of SBS has come from the traditional SBS User Group community. These guys do a GREAT job for their clients, they go above and beyond the call of duty HOWEVER they are the minority by far. I can’t tell you the number of SBS systems I have seen that are so poorly installed, configured and maintained that I shudder to even be considered an IT person when I see them.


In the end resellers serve customers and if customers don’t want servers then that has to be accommodated.


D. These same SMB resellers in my opinion have failed to band together in a way that allows them to present a united face to Microsoft. With some many tiny resellers out there Microsoft really doesn’t have any visibility on what is really happening out there.


I know there have been plenty of false starts trying to get a strong and united community voice to represent the SBS cause but you know what? Simply saying something doesn’t mean it will be heard, you have to frame it a context that the other party will understand. Microsoft has never really understood the SMB (sub 75) market and that is not all their own fault. You need to show them volumes to make an impact. Sure SMB represents a huge group, COMBINED I agree but the reality is it has been about to provide a coherent front.


As hard as this may sound, I firmly believe that there needed to be a united international organization to represent the needs of SMB resellers to vendors like Microsoft, but to my knowledge there is not one that has come close.


E. Microsoft is a corporation. It is a business. The main aim of a business is to generate revenue for its shareholders. If the SBS investment is not paying dividends and doesn’t seem to be well then good business logic says that it should be shut down and the resources allocated to where there is more opportunity.


At the end of the day, don’t forget SBS is Microsoft’s product. They LICENSE people to use it. I hear the complaint about what do businesses do who have based their business model around SBS? My argument is that if you blindly based your whole business around a single product from a single supplier and didn’t have the acumen to look at the trends in the market and learn from others who are in the same space subject to the same pressures then your business is going to struggle.


If you a single man IT reseller focused on SBS and you are surprised by the demise of SBS then you have not being doing justice to your shareholders i.e. YOU!


F. The support of SBS doesn’t end today. You can still buy SBS and you will be able for a while yet. SBS will still be supported but it is certainly on the decline as a platform. Know what? That means an opportunity to look to grow into something else. That means an opportunity to consider what options are available. The bottom line it means you gotta do some work to help clients understand what they need. As they say when you have lemons, make lemonade.


It probably means that you need to consider and develop your business model. As I mentioned before, it is really not the first time that should have had to consider this BUT even if it is that doesn’t stop you from making that a priority now.




An intelligent person understands that they cannot totally control their environment they can only control their reaction to it. Most people like me started out in IT because they loved change. They loved testing new hardware and software. They loved running things up in their spare time. They loved to learn what made technology tick and then deliver solutions to customers.


It seems to me that most people who bemoan the demise of SBS have become old ‘fuddy duddies’ who have become the mainframe people they used to mock. Change is a part of business as it is a part of life. An old Japanese saying is most appropriate here I believe. It says that the average man sees life as a daily burden weighed down by frustrations but a warrior sees it as an opportunity to test and hone their skills. It is what they live for. It is the spice of life that makes living so worthwhile. It seems to me that many SBS folks have become too sedentary in a field where change is the constant factor. 

Book Review–Book Yourself Solid

Book Yourself Solid: The Fastest, Easiest, and Most Reliable System for Getting More Clients Than You Can Handle Even If You Hate Marketing by Michael Port
My rating:
5 of 5 stars

I believe this is one of the few ‘must’ reads books I have come across for those that run their own business. I really got a lot out of the information provided and it have given me a list of things that I need to do to work on and improve my business.

The book is easy to read and takes you through a logic progression of helping you understand what your business is, what it does and how it can help customers. I particularly like the focus on building a business that aims to satisfy customers. I also like the take aways at the end of each chapter which provide you a list of tasks to perform. This, I believe, makes it much easier to transform the material into actions. The difference here is that is helps you understand what customers you really want and respond to which means you’ll provide a much better service to them rather than simply taking on any old client.

The book covers a lot of ground and includes strategies around web sites, Facebook, Twitter, and all the current technologies. I would certainly say that if you ran a business you should sit down and not only read this book but also but on your shelf for reference. To me, this an indication of a ‘must-read’ book. Not only is it worthwhile the first time you read it but every other time you do.

All in all, a really well laid out, easy to read book brimmed full of helpful ideas and steps to follow.
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Always a way

I have always been a big proponent of Linkedin. I was an early adopter and have seen its growth skyrocket in the last few years. Some say that it is Facebook for business, which ever way you look at it you really a place you need to be if you are serious about your career or your business. You can view my public profile at and if you are already on Linkedin then feel free to connect up with me directly.

One of the surprising benefits I found from Linkedin was the fact that once I linked my Twitter feed into the Linkedin my audience grew significantly. I also found far more interaction with what I posted in my Twitter stream from people who saw the information via Linkedin. I was therefore disappointed to read about the fact that this would no longer be available.

Twitter cuts off service to Linkedin

After some consideration I have found what I think is a suitable replacement using If This Then That.

If This Then That is a very simply yet power site. It allows you to create automation ‘recipes’ from other online services. I already use the user to send a copy of every tweet that I do to the online notebook Evernote. All I needed to do was create something similar but send it to Linkedin.

Once you create an account you think link in your online services or ‘channels’. Here you can see some of the ‘channels’ I have already configured (including Linkedin)

I can now start linking these services together via simple rules.

In the case above, if I tweet with Twitter post that tweet to an update on Linkedin.

So here’s the tweet and

Here’s the update on Linkedin (it may take up to 15 minutes to come through).

Pretty handy eh? If you haven’t looked at If This Then That then I recommend you do. There is a thriving community of people developing and sharing recipes, so you don’t even need to make your own!

If This Then That to me point in the direction we’ll see with cloud services. Basically you’ll be able to easily and simply combine them together and automatically share data and information between them. Very, very powerful when you think about it.