How “Done for You” Services will save the MSP Business
It is no big secret that many Managed Service Provider (MSP) businesses are struggling in the current economy. Though many have speculated that the economy is turning around, industry leaders like Karl Palachuk have voiced their concerns about another five years of instability.
This same instability has forced technology equipment and software vendors to change their strategies, and look ahead to a future that relies less on a channel network. With fewer orders from IT solution providers, vendors have had no choice but to come up with direct models.
The MSP model has inadvertently created a genre of services I like to call “Done for You” Services. With the breadth of products and solutions required to run an MSP practice, a sometimes high learning curve, and a minimal staff; MSP’s required service based solutions that helped address each of these problems. “Done for You” services address these by providing end to end solutions, allowing MSP’s to become aggregators of services and focus on sales to grow their revenues, rather than the ins and outs of deploying new services.
A number of vendors have provided just these types of solutions to partners. They provide the installation, setup, support, and some even include billing. Cloud services, marketing and web solutions, help desk and support, and even backup vendors are providing “Done for You” Services.
Some of the advantages that MSP’s using “Done for You” services realize are low to no startup fees, no certification requirements, minimization of staff requirements, ability to maintain the client relationship, as well gained efficiency and time management. The biggest advantage for MSP’s is the high profit margin that comes with services that require no support and only vendor and client management.
In this model sales and relationship becomes the main focus of the business. Though this may be difficult for many tech-focused providers to adapt to; a sales and relationship focus is what will save the MSP business.
As we move into the future of a very different IT landscape, MSP’s will once again need to adapt to change. Just as it was required to move from a traditional break-fix model to an MSP model; I see the new “ASP” (Aggregated Services Provider) model taking shape to be the next evolution of our industry.
Have a Safe and Happy 4th of July from Looks Cloudy! Tales from the Cloud- Episode 7
Frank,
Interesting post. I don’t agree though. I Think that a lot of these “done for you” take away from the value that the service provider brings to the table. With “Done for You” we are all just brokers of someone else’s knowledge. A critical components that makes me valuable as an MSP is the valuable relationship that I bring to the table for, with and at a client, on all facets of the relationship – sales, service delivery and customer management; if I rely on someone else for everything except sales that minimizes my value. Don’t get me wrong, I sell other vendors services but it’s not all I sell. and I make that crystal clear to my customer. Vendor relationships are critical to be successful as an MSP and I highly value them. But Even franchise MSP’s have to perform some of work locally. You can’t outsource everything.
We do agree that the ‘relationship’ is the critical focal point for an msp now, otherwise dell would eat everyones shorts. In my experience you can only be tech focused for so long. If you want to grow as an msp, you have to, as Arlin Sorenson says, become a sales organization.. That becomes a critical barrier to growth at a very specific stage of your business growth. A small MSP can use their “geek ness” as their focus and even a differentiator to less mature clients but that only lasts so long.
Finally, a business based on brokering significantly lowers the barrier to entry in our industry, which IMO is what is doing more harm to our industry than anything else.
Otherwise, sorry it’s been so long since we’ve spoken, buddy. Hope all is well!
Scott
Hi Scott,
Definitely been a while my friend… I do agree as well that you must be able to set yourself apart and expertise is key to doing just that. If you look at the current state of managed services and the IT solution provider community, you will see that vendors in the space are changing their focus and partner initiatives are becoming less important. The point I was hoping to make with this post was a successful future for IT companies will rely heavily on bringing together services (aggregating or brokering) if you will, though technical expertise and break fix will be just as important to provide instant gratification, sales and relationship skills will become even more important than they already are. The industry is seeing more and more non-tech minded people come in, let’s call them business focused and some are finding success in the model. To me a mix of tech skills, business focus, aggregation of services, and slim, efficient organizations will be enable MSP’s to stay on top in a changing environment…
Frank