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November 9, 2026
Loyalty, the channel likes to tell itself, is dead – customers shop around at every renewal and tenders go to whoever is cheapest on the day.
A partner can look after a business for a decade and lose it in a single procurement round to a competitor it has never heard of, armed with a sharper price and a fresh acronym on the email signature.
Michael Feldbauer has a client who has stayed with him for 28 years. That is a year longer than Territory Technology Solutions – the Darwin-based business he founded in the late 1990s and runs as Managing Director – has existed.
That relationship hasn’t lasted almost three decades on price. It has lasted on something that never appears on an invoice.
“Trust,” Feldbauer said.
“We ensure our customers trust us, and that in turn provides longevity in our relationships. We have been in business for 27 years now, and I’ve had one client for 28 years. That comes down to us providing guidance as a trusted advisor.”
That puts Feldbauer at odds with a sizeable chunk of the Australian market.
This is a business owner who is scathing about partners who call themselves managed service providers (MSPs) without the capability to back it up, about vendors who let opportunists pick off deals that loyal partners spent years cultivating, and about growth bought through acquisition rather than earned customer by customer.
He also holds a view few business owners say out loud: some customers are better off somewhere else.
According to Feldbauer, running a partner business has never been harder from a planning perspective.
“It’s definitely trickier than it ever used to be,” he explained.
“There are supply constraints, cost increases on a weekly basis and unpredictability in the market. As always, clients are still indecisive around hardware purchases. But on services, and on cyber protection legislation, things are still moving forward quite well.”
That split runs through his whole outlook.
Hardware remains the part of the market where customers stall, sit on decisions and wait for a better number. Services and security, pushed along by legislation and by a steady drumbeat of breaches in the headlines, are where the momentum is.
But the better number on hardware, he warns, isn’t coming. Customers arrive with expectations set decades ago, and it takes the noise of the wider market to bring them around.
“Some customers still expect genuine 1970 prices,” Feldbauer challenged.
“But because there is so much information in the market about what’s happening, they do eventually understand that that is never going to happen again. It’s no different from going and filling up your car. Things are changing on a weekly basis.”
The fuel comparison rings true for a market where component shortages, currency swings and vendor price lists move as often as the board swinging outside of a service station.
In the current climate, nobody expects last month’s price at the pump, and Feldbauer’s point is that customers are slowly learning to see technology the same way. Partners are feeling the same squeeze from the other side of the counter.
According to Moxie Metrics – Partner Ecosystem: Australia FY26 – rising supplier and material costs weighed on profitability for 53% of partners during the last financial year, and 59% named supplier or vendor price increases among the biggest drivers of their own cost changes. Only 10% said improved pricing or margins had helped their bottom line.
Price rises are flowing down the supply chain, and partners have little room to absorb them.
Feldbauer’s response to tighter budgets has been to stop fighting the cost of hardware and help customers buy less of it. With the peak of the Windows 10 end-of-life deadline now behind the market, the hard refresh has been done, and the conversation has moved on.
“Yes, clients are looking at their budgets,” he acknowledged.
“But now that we’ve upgraded everyone onto Windows 11-compliant devices, we’re working with the majority of our clients to extend device life cycles.”
This is an unglamorous strategy, and a telling one.
A partner that lives on hardware margin has every reason to push the next refresh. One that lives on recurring services can afford to tell a customer to keep their laptops another year, and put the money saved towards protecting the business instead.
That is where Territory Technology Solutions has placed its considerable market weight, and where Feldbauer said customers are leaning in rather than pulling back.
“At the same time, we are pushing compliance, our MSP services and cyber security, and in most cases, clients are responding very well to that,” he observed.
“There is a deep understanding that there is a significant rise in cyber crime, business exposure and loss of reputation. We are capitalising on those market elements to continue to drive the business forward.”
The concern is broad.
Data protection and privacy compliance is ranked the most pressing cyber security challenge facing the Australian economic heartland, as cited by 52% in Moxie Metrics – SMB Outlook: Australia FY27, a survey of 400 SMB decision-makers. Malware (61%), phishing (57%) and ransomware (39%) top the list of local concerns.
In other words, the threat is real, the customer knows it, and a partner that can do something about it should be in the room. And in the Northern Territory, that conversation comes with a local advantage that partners elsewhere in Australia would envy.
“We’re also lucky in the Northern Territory that the NT Government provides grants to businesses to assist them with cyber security, physical security and a number of other elements they can draw down on,” Feldbauer outlined. “We’re assisting with writing most of those grants, to ensure the customer is successful in their applications.”
Writing a grant application earns a partner nothing directly. It takes time, it involves paperwork most technology providers would rather avoid, and the reward only comes if the customer is successful and chooses to spend the money with them.
Feldbauer does it anyway, for most of the customers who apply. In a market of SMBs spread across a vast territory, it is often the difference between a security uplift happening this year or not at all.
The other conversation dominating his customer meetings is one the industry has largely created for itself. The rush to put artificial intelligence (AI) into every product has left customers confused about where information goes, and about what they are agreeing to when they switch a new feature on.
“The AI bubble is causing issues in relation to clients’ understanding of data sovereignty, and now AI sovereignty requirements,” Feldbauer said. “So again, education is key for our clients to proceed with a solution that works for them.”
For years, the sovereignty question was relatively contained: where is my data stored, and under whose laws?
AI adds a much more complicated layer, however: Where is my data being processed, which models are touching it, and what happens to what goes in?
For a two-person business, or for an organisation working with government, those are not abstract questions, and Feldbauer sees the role of Territory Technology Solutions as answering them before a customer commits to anything.
Because most customers won’t build AI themselves.
Moxie Metrics finds that 51% of SMBs plan to get the benefit of AI through products with the technology already built in, compared with only 12% building capability in-house.
That means AI arriving through software updates and new licences, often before anyone has asked where the data goes. It also explains why data security (56%) and AI security (44%) now lead SMB cyber security priorities for the next 12 to 24 months.
Education, for Feldbauer, isn’t a marketing line. This is the business model, and one that the MSP started building long before the current wave of interest in partners as ‘trusted advisors’.
“We have definitely moved our focus over the last five to seven years towards providing guidance and advice, a lot of which is done gratis, to help businesses better understand their compliance requirements,” he explained.
“We assist with business analysis, and then we are able to provide services that are paid for by the client at that point. We essentially set the scene for them, and then invite them to come and participate with us.”
Giving the advice away is the part many partners would baulk at.
Feldbauer sees it as the cost of a relationship that pays back over decades, not quarters. The customer learns what they are exposed to and what the rules require of them – only then is there anything to ‘sell’ in a sense.
But this is a role that few partners hold.
Only 10% of SMBs regard their current MSP as a critical strategic adviser, according to Moxie Metrics. Most describe the relationship as operational support (33%), occasional project work (36%) or transactional (21%), and external advisers lead only 7% of SMB technology decisions in Australia.
“The sale of hardware is always transactional,” Feldbauer accepted.
“But at Territory Technology Solutions, we have been a lot more focused on recurring revenue services, and on stickiness with our clients, to ensure they keep coming back to us for anything that changes in the ICT sphere for them.”
The wider channel is moving the same way.
Managed services contributed to revenue for 86% of Australian partners in FY26, compared with 55% for one-off product sales. In other words, projects should open the relationship rather than define it.
“I do think there needs to be a change,” Feldbauer challenged.
“There needs to be qualification for MSSPs and MSPs, as they seem to be popping up everywhere, and some of the advice I’ve seen from them has been horrific. There needs to be quantification of the services being provided by this group of companies, because it seems anyone can be an MSP or an MSSP by adding it to their email signature.”
When the label costs nothing, the reputational damage from poor advice lands on every provider that wears it, and the customer has no easy way to tell the difference until something goes wrong.
The same gap, in Feldbauer’s view, runs through the national cyber framework that many of those MSPs and MSSPs sell against.
The Essential Eight – the Australian Signals Directorate’s baseline set of mitigation strategies which has recently been updated to ASD Essentials – has become a common reference point for businesses trying to prove they are secure.
Feldbauer wants it to go further, and faster.
“The cyber security practice in Australia has to evolve,” Feldbauer observed.
“It’s encouraging that the Essential Eight has been updated to become more relevant to business needs, but that needs to be continually uplifted sooner rather than later. Again, there are really no guidelines for a business to ensure this is completed correctly, and that the client has actually been protected.”
Put the two complaints together and the problem is plain. MSPs and MSSPs need no qualification to sell security, and customers have no standard against which to check what they bought.
A business can pay for an ASD Essentials uplift, receive a report, and still not know whether it is any safer than before.
The data backs this up.
According to Moxie Metrics, only 18% of SMBs can clearly demonstrate that their cyber security investments have reduced risk, and 39% have limited or no evidence at all. Most are already relying on outside help: 61% outsource at least part of their security operations but only 16% describe their relationship with a security partner as a deep, long-term one.
“The reseller models for many of the tier one vendors need to be addressed as well,” Feldbauer explained. “We still see drive-by assassinations on tenders, which eventually come back and bite everyone.”
Anyone who has spent time in the channel will recognise the pattern.
A partner invests years in a customer, understanding the environment, shaping the requirement and earning the trust to be asked. Then the tender lands, and an MSP or MSSP with no history in the account undercuts the field to win it.
The margin vanishes, the delivery suffers, and the customer, the vendor and the incumbent are all left worse off.
On tenders, Feldbauer puts the fix squarely with the vendors, and questions whether partner programs always match partnership rhetoric.
“Loyalty needs to be rewarded by these vendors, and long-term relationships need to be addressed, to ensure there’s longevity in the market for everyone,” he outlined. “These short-term players, and companies that are growing by acquisition, are not reflecting the true intent of what should be happening in this industry.”
Acquisition-led growth lands at a time when consolidation continues to reshape the Australian channel.
This isn’t an argument against scale, however. It is that a customer base assembled by purchase isn’t the same as one earned through years of service, and that vendors who reward the former over the latter are undermining the partners they will rely on in the long run.
By Feldbauer’s measure, the top-performing partners in market don’t have a product advantage because everyone can buy from the same distributors.
The difference is in what happens between the sales.
“We can all sell equipment and widgets,” he stated.
“But providing guidance, compliance assistance and even a regular chat goes a long way to ensuring the relationships are solid and they continue to come back. We do this for all levels of customer, from two-person businesses to 2,000-seat clients. It really doesn’t matter.”
That last point is easy to say and harder to do.
“We also assist in transitioning customers who don’t fit our model,” Feldbauer added.
“Not everyone is a good match with the way we operate, and we want to ensure we have reciprocal relationships with our clients. Not every customer is a good customer.”
Note the verb. Feldbauer doesn’t drop those customers; he helps them move.
This is the same principle that powers Territory Technology Solutions – from the free advice to the grant applications to the critique of the drive-by tender. A relationship has to work for both sides, or it isn’t one.
The research points the same way.
Moxie Metrics urges partners approaching the mid-point of FY27 to ‘be prepared to subtract’ – to reduce the customers, offers and vendor relationships that consume capacity without creating value, and, where costs can’t be recovered, to reconsider whether the revenue is worth keeping.
After 27 years in business, and one client who has been along for longer than that, Feldbauer has earned the right to be selective.
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