Ryan Morris on Why Vendor Growth Depends on Active, Profitable Partners—Not Just Big Numbers

Dave Sobel (0:14)

A backup company in Dallas has two partner numbers. More than 300 IT firms have joined its program since it started. About 125 are still active. The new owner, a former MSP operator, bought the company because of the second number.

Almost nobody else in this channel publishes that second number. The big players are busy with something else. Microsoft is retiring, it's hardest to earn MSP credential. ScanSource, a distributor, just bought an MSP outright. So this week, can a vendor grow by making the partners it already has better? My guest has spent 25 years designing partner programs, and he thinks the answer decides whether a vendor grows at all.

Welcome to the Business of Tech Lounge. This is where we break down what's changing in the IT services market, what it means for providers and vendors, and what to actually do about it. If you're running or supporting an MSP, this is about making sense of the environment you're operating in, not just the headlines. Now to make this conversation possible, a message from our sponsor.

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My guest today is Ryan Morris, Principal Analyst at Morris Management Partners and my co-host on the Killing It Podcast. He spent more than 25 years across solution provider, vendor, distributor, and analyst roles designing the channel programs. A lot of this audience works inside. Ryan, welcome back to the show.

Ryan Morris (2:11)

Thank you very much, Dave. Glad to be here.

Dave Sobel (2:13)

I'm glad to have you back. This is one of your favorite topics. I know you're itching to go.

Listeners, viewers, if you're watching this, you've got a question, throw it in the chat. We will put it in the Q&A section. We will bring it up and answer in real time. Now, a quick disclosure first, right here. The buyer in this particular story, Nancy Enriquez, leads the community at MSP Unplugged, which competes with Small Biz Thoughts, which I own. You can discount my read as much as you like. All my facts are sourced. Now, the story real quick. Dr. Backup is a cloud backup company founded in 2002 This month, it was bought by Hasvara, a company, Enriquez, a former MSP owner set up for the deal. She told us more than 300 IT firms have joined its partner program over the years and about 125 are active today. Now, she tells me she didn't buy it for the product. She called backup a crowded market.

She bought it for the partners and her plan is to rebuild the program through an owner's eyes, with coaching built in, so partners get help running their business and not just something to resell.

Now, Ryan, I thought this was a story right up your alley because you've spent years arguing that a vendor grows because its partner grows. And here's a vendor owner bedding everything on that premise. So I want you to make your case, make the case you've been making for years, that a vendor's growth is caused by its partner growth. Tell me what a vendor does differently, what it actually knows, how many partners stay.

Ryan Morris (3:41)

Well, it's a great topic, Dave, and it is something that I'm very passionate about. Think of it this way. A vendor has two routes to market in fundamental terms. They can sell direct or they can sell indirect. If they sell indirect to a significant portion of their total top line revenue, then their growth is by extension like inextricably linked to the ability of their partner community to grow.

We call it enlightened self-interest, right? If my interest is sell as much of my stuff as I possibly can, and the route to market that I use to sell my stuff is through partner organizations, then logic would dictate if A equals B and B equals C, then A also equals C, right?

If my growth comes from somebody else, my interest is to enable them to grow as much as possible. Think of it in three kind of fundamental buckets of growth from a vendor's program point of view. I can expand with existing active partners and make them more capable. I can recruit new partners and launch them into productivity, and I can go back and reactivate past partners that were once in my program and producing, but are no longer doing so at this time. There are three. That's it. You literally cannot get growth from anywhere else.