I had an opportunity to look at a few industry surveys that were designed to analyze the Managed Service Provider (MSP) market. One of the healthy trends I noticed was the increase in the market size over the last couple of years. With the uncertainty of the economy looming over the world, more and more enterprises from non-IT domain will look at MSPs to outsource their IT management work, so that they can concentrate on the tough task of saving and propelling their core business while MSPs take care of their IT.
MSPs face tough competition in pricing, which reduces their profit margins. Apart from this, they also have the daunting task of keeping their client’s IT running with five-9 figures of availability! Oh, and I see the number of 9s just keep increasing, don’t they? In this stringent environment, MSPs have to look for various avenues to reach their customers.
A few of the avenues which MSPs can adopt to grow include:
1. Embrace the ‘Infrastructure as a Service’ (IaaS) revolution
Infrastructure as a service (IaaS) has picked up at a tremendous rate over the last few years, thanks to all the hype surrounding the cloud and cost benefits it provides to the small and start-up companies. According to the recent research by a leading firm, IaaS is the fastest growing market in the public cloud-services segment, which is set to grow at a rate of 45.4 percent in the coming year. MSPs can leverage this growth in moving their IT management services to the cloud by utilizing infrastructure from various IaaS vendors that have arrived in the market today. With the simple architecture of hosting the service in cloud, MSP do not have to worry about any of the following:
Cost of the infrastructure
Addressing the infrastructure-capacity-planning
Getting into details of setting up a private datacenter
Rolling out services faster than the time it takes to manage it in-house
2. Unify IT Management
The cost and reliability of services are seen as most critical aspects to run this business. Cost is due to the operations that include various tools, plus the skills required to run them.
Reliability is a critical aspect due to various following reasons:
Visibility into various modules
All the above-mentioned problems can be addressed if the MSPs can view IT as one and are able to manage them as a single entity rather than working in silos. To enable this, MSPs have to look for the tool that can give the single pane of glass to monitor and manage customers’ IT infrastructure. Needless to say that the tool becomes more cost effective if can be deployed in the public cloud.
3. Expand Your Service Portfolio
I have seen many MSPs getting stuck in same vertical for several years and trying their best to increase the revenue and profit margins. Today, business runs on IT, and MSPs have the opportunity to run that. Most medium-sized MSPs limit their service portfolio with Desktop management/Anti-virus management or Patch management. There are several other services which are yet to be explored completely and Enterprises are looking out in the market to outsource them.
A few of them include:
Remote monitoring of the entire IT infrastructure
Network Operations Center (NOC) services
Mobile device management
Managed storage, back ups and disaster-recovery services
Help desk and Patch management
Cloud services (Hosted emails, storage, VDIs, Web site, etc.)
Financial and Banking sectors have been the sweet spot for MSPs over the years, but the core industries are looking for MSPs to outsource their IT so that they can concentrate on their business. Horizontal expansion lets MSPs to expand their sources to increase the revenue while using the expertise they gained by managing specific verticals.
4. Evaluate Your Vendor Selection
No MSP is complete without possessing a right tool and the tool is only as good as the vendor’s knowledge of specific market! Choosing the right vendor determines the success of the MSP.
A few of the areas that the MSPs must check before choosing the vendors include:
The relationship that the vendor has with channel partners;
The way vendor sees MSP market: For example: Checking the availability of specialized tools designed for MSP, which includes features like Customer segmentation, Unified console, Partner re-branding, high-availability module, etc.
Vendor flexibility: While deciding the service portfolio, it is important to check whether or not the vendor is flexible enough to discuss the roadmaps, listen to the suggestions in rolling out features, and has flexibility in licensing. In doing so, it becomes far more efficient than when compared to a vendor who would keep them in the dark.
5. Pursue Automation
It is a near impossible task to achieve efficiency and productivity for today’s business with the traditional approach. Hence the way out is to bring automation in to the existing tasks. One of the major concerns for MSPs is the cost and that can be brought down if the MSPs automate the repetitive tasks in a standardized way. This increases the number of devices managed by each technician.
MSPs must be able to automate all the objects in the runbook which will allow them to scale and efficiently utilize their skill-pool rather than indulging the resource in daily mundane and repetitive tasks.
PS: The original article was posted in MSP mentor: http://bit.ly/X1W0On