Being the New Year, I thought it best to start off with an industry prediction and a little advice to those who may be sitting on the fence when it comes to managed services.
First, the prediction, which I believe you can take to the bank: The next two years (we’re talking 2008 and 2009) will be remembered as the Great MSP Land Grab.
When I look at the market today and talk to our partners and industry investors, there’s an enthusiasm for business growth that I haven’t seen in years. Even with the economy’s unpredictable twists and turns, it seems opportunity is everywhere. And a number of market analysts seem to be in agreement with me on this.
I heard one stat from AMI-Partners that reported that the global market offers up more than 66 million SMBs, with 900 million employees, that spend over $500 billion dollars on IT — pretty big numbers. In North America, estimates show that among the six million or so SMBs and 72 million employees, IT spending will approach $200 billion dollars annually.
Those are impressive figures, but what’s more is that only a small fraction of North America’s SMBs — perhaps as few as 5% — are currently under a managed services contract. And according to CompTIA, many MSPs are already racing to do more with nearly half expecting revenue growth of at least 26% this year.
As a passionate entrepreneur and business enthusiast, I certainly want to see N-able, as well as the IT channel and especially our partners, prosper from this profitable business opportunity. It’s so rewarding to see and hear from MSP partners who are winning big with managed services.
Take, for example, our partner Michael Drake of masterIT in Memphis. At our recent N-able Partner Summit in Chicago, Michael shared the secrets to his success with a room full of solution providers and MSPs. In under an hour, he talked about what it took to double his engineers’ capacity, increase the company’s EBITDA profitability by five-times and create a healthy recurring and predictable revenue stream that pays the bills and rings in the profits.
It was truly remarkable to watch and the one piece of advice that he had for the 300 folks in attendance was this: If you’re delivering managed services and haven’t already done so, get a business plan in place for 2008.
It was simple advice really, but I couldn’t agree more. The plan doesn’t have to be fancy or even more than a couple of pages, but it does have to be written down so you can establish a clear path for growth that can be measured and accounted for. A business plan will help keep you focused and looking ahead so that you can provide your customers with unique, high-value services and support over the long term.
For those of you who are looking to get into managed services, or may be toying with the idea of automating a select few of your IT services — your timing to get into the game couldn’t be better!
The barriers to entry (like cost, technology procurement, support desk resources) have been virtually eliminated by the advancements we’ve made in remote monitoring and management technologies, as well as MSP reporting and interoperability with third-party professional services automation software. Many manufacturers and software developers, as well as industry groups such as MSP Alliance have also put forward a number of IT best practices to guide you. And some, especially N-able, have made a number of notable investments in partner enablement resources and support.
Talk to other people in the business and take a look at the resources available to you. It’s never been easier to build your MSP practice and it’s definitely not too late to cash in on the market potential that awaits all of us in the New Year.
Happy New Year and cheers to the continued success of us all in 2008.