The Forecast

Is CSP the new MSP?

MSP or “Managed Service Provider” has been around for some time now and has become “the” term to use for IT companies, replacing the outdated term VAR or “Value Added Reseller.” Recently there has been a shift in the way IT businesses, media outlets, and industry experts describe IT companies.

Names such as IT Solution Provider and IT Generalist come to mind as new terms that are being used by the industry. These terms tend to provide a less specific description and provide a wider coverage of services and solutions that may make it easier to build a business that provides a vast array of products.

These terms which are being used but have not yet completely caught on have some competition from companies and organizations such as Gartner, IBM, Microsoft, and others who are coining a new term to describe a specific segment of the IT industry. This new term CSP or “Cloud Service Provider” describes those IT companies that are installing and delivering cloud services to their customers.

With cloud services becoming a clear standard for IT companies, the CSP term just may have some legs. Microsoft is making a strong push to the cloud with its entire product suite and is forcing users to make the shift as well. Most software companies have provided IT companies with “as a Service” cloud-based solutions and the cloud movement doesn’t appear to be slowing.

Current CSP companies are those that have built their businesses around a complete set of cloud products. With low overhead, very little stock, and decent margins, this business plan may be seen as a good startup environment for new or up and coming IT companies.

Many vendors provide white-labeled products and services making the vendors transparent allowing CSP’s to provide their own branded solutions. This provides a way to easily market a number of services without the need to develop internal products making the CSP model an easy and potentially lucrative venture.

Whether, MSP’s will become CSP’s remains to be seen. As more cloud services are adopted and deployed by IT companies and as hardware sales and service continues to decline, it is likely that cloud services will become an integral part of all IT Solution Company portfolios.

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