“Managed Service Providers will be obsolete in the next five to ten years.” Really?

“The cloud will put MSPs out of business,” according to a senior software architect[1] with one of those MSPs.  His (and others’) concern was that as customers moved more of their infrastructure to hosted environments, monitoring and managing “assets on location” (the cornerstone of the MSP model) would become less necessary. The need for remote monitoring and management (RMM) would remain, but the fear was that any MSP relying solely on RMM would soon be out of business.

No need to panic just yet though.

Firstly, because the remark was made in 2011 and while the MSP market has undoubtedly become more challenging since then, most MSPs are still hanging on in.

Secondly, because those same harbingers of doom also offered a glimmer of hope to MSPs hoping to avoid the IT services scrap-heap – and it’s become a familiar message:  in a commoditised market, “you need to look at your capabilities and analyse what else you might bring to the table that makes your IT service more valuable to the customer.”[2] Over the last few years, forced to reassess their business model, that is just what many MSPs have done.

One of the key challenges they have had to face is how to position their services vis à vis new technologies. The recent Forrester Report (The Top Emerging Technologies to Watch: Now Through 2020) lists the 15 top emerging technologies[3] to take note of (see summary in Forrester’s chart below and further information available on http://www.zdnet.com/forresters-top-emerging-technologies-to-watch-now-through-2020-7000035370/)

emerging_tech

 

Among the organisations canvassed (many of whom could be actual or potential customers of MSPs) Forrester found “high expectations” that emerging technologies would help them stay competitive. Results showed less confidence, however, in specifically which technologies should be the focus of their attention:  Cloud?  Mobile? Social? Big data?

The survey data indicated that between 2012 and 2013, the number of businesses that were unhappy with their firm’s ability to introduce emerging technologies almost doubled; enterprise architects were struggling with the speed of new technology delivery combined with constantly changing business strategies and requirements.

And Forrester expects the picture to be worse for 2014-2015.

Why is this significant for MSPs?

Firstly, because the Forrester report encapsulates the areas in which MSPs need to invest and skill up if they are to continue to add value to current and prospective customers – and so avoid a drift to the bottom of the ‘IT stack’. But also if, as the data shows, many of these companies are struggling to implement the new technologies so necessary to their business and their customers, there must be significant business opportunities out there for the MSP who can help them to achieve this.

‘Cloud’ appears on the Forrester list and is being explored by a significant number of MSPs. Even the pessimists in 2011 felt there were two cloud trends they could take particular advantage of: hybrid cloud environments; and cloud consulting – since the best MSPs already enjoyed “trusted advisor” status with their customers.[1]

Autotask’s 2014 ‘Metrics that Matter’ report reinforces the significance of cloud to MSPs and ITSPs.

top_3_tech

Don’t throw the baby out with the bath water!

To enable them to deliver higher-margin services and innovative technologies such as cloud, mobile and ‘always on’ computing, MSPs may opt to switch in-house resources away from RMM – but this certainly doesn’t mean abandoning it. They may instead decide to outsource to a partner, giving them more time to focus on building client relationships in value-add areas rather than being distracted by day-to-day ‘noise’

NOC RMM and Service Desk – still a crucial part of an MSP’s business

A Special Executive Report from N-able[1] underscored the importance of an efficient and profitable NOC and help desk – both as an important source of recurring revenue and an ongoing point of contact with end-customers.

And we shouldn’t forget that monitoring and remediation can extend into the cloud, making NOC and Service Desk even more valuable:  cloud services still need to be monitored and maintained – plus there are opportunities to sell managed cloud services to boot.

As your thoughts turn to 2015 and you contemplate the resources you will need to meet your existing commitments – and the increased expectations of your customers – look at where your skillsets can be used most profitably. RMM should continue to be a valuable aspect of your business – but this doesn’t mean it should be consuming your internal resources to the detriment of higher-value services such as cloud.

Outsourcing NOC and Service Desk to a trusted partner means this needn’t be an ‘either/or’ decision. You can move your business up the value chain by offering new services based on the latest technologies, while ensuring that the day to day bases are securely covered.

And you won’t be risking obsolescence!

 

 

 

 

 

 

——————————————————————————-

[1] See more at: http://www.channelinsider.com/c/a/Cloud-Computing/Cloud-Computing-Era-Could-Mean-MSP-Extinction-759379/#sthash.xDCdwxzN.dpuf

[2] : http://www.channelinsider.com/c/a/Cloud-Computing/Cloud-Computing-Era-Could-Mean-MSP-Extinction-759379/#sthash.xDCdwxzN.dpuf

[3] http://www.zdnet.com/forresters-top-emerging-technologies-to-watch-now-through-2020-7000035370/

[4] http://www.channelinsider.com/c/a/Cloud-Computing/Cloud-Computing-Era-Could-Mean-MSP-Extinction-759379/#sthash.xDCdwxzN.dpuf

[5] Critical Success Factors for In-House NOC and Help Desk Operations : Why your NOC and Help Desk is the key to success and survival in the managed services business

 

Comments are closed.