When managed service providers (MSPs) talk about their profession becoming a commodity I always get a little anxious. The reason being is that more often than not MSPs discount their value and importance in the world and allow others to define their profession rather than build their own brand and promote their services. This lack of self assertion and confidence is damaging to the livelihood of the IT channel and if left as is, will have a devastating impact on the global managed services community.
The truth of the matter is MSPs and software manufacturers have always feared the commoditization of their industry. Yet over the years this fear has permeated into those companies who have not yet made the transition to managed services, and that’s what concerns me. There’s far too much talk about commoditization and not enough focus and action around the opportunity and longevity managed services brings to the channel. That said I’d like to dispel three of the most common falsehoods concerning managed services, and turn your focus toward the future and profitability of this growing profession.
First, it is important to understand that just because managed services is a hot topic today doesn’t mean the opportunities for MSPs are short lived and will become scarce. On the contrary, at the current adoption rate, end-user demand for managed services should continue to outpace the number of qualified MSPs for the next few years – building a steady stream of opportunity for those who are truly delivering managed services.
Second, there’s some speculation that the recent moves by some larger companies to break into the managed services profession will ultimately result in rapidly falling prices and commoditization of services. Nearly a decade ago the telecommunications companies decided that managed services would be their next strategic service offering, much to the horror of smaller MSPs. Many of these smaller MSPs believed that their practices would soon be driven out of business by falling prices and increased competition. In reality what happened was service prices increased and more MSPs entered the managed services profession, helping to establish best practices, build awareness and accelerate the adoption of managed services worldwide.
Last, the inevitable lifecycle of MSPs is to seek out new, high margin managed services while automating and partnering for lower margin services. For example, 10 years ago managed anti-virus and anti-spyware were high in demand by end-users. Today, these same services, while still important, are generally regarded to be low margin services that should be automated by the MSP in order to focus on more important and higher margin services. This process of ever-evolving services keeps the MSPs in constant demand by their clients, as well as insulates the MSPs from commoditization of services and falling prices.
Being a managed service provider means more than just reselling products and delivering services remotely. Real MSPs proactively protect clients against the constantly changing threats and challenges their businesses face. And because these threats will never go away and will always mutate and adapt, MSPs (including aspiring MSPs) should be encouraged by this promising future in the managed IT services profession and embrace the worldwide adoption of managed services. With the economy driving more businesses to right-size, build efficiencies and establish predictable spends, there’s no better time than the present to make your move to managed services and take your company to a new level of service excellence and business value.