According to Datto’s latest MSP report there has never been a better time to be a Managed Service Provider.

With over 70 per cent of MSPs questioned confident they’ll add up to 10 new clients over the next 12 months you’d see why. Powered by a changing attitude to payment models and a necessity to look externally to protect business, the MSP has grown exponentially to be a staple acronym in the IT channel.

But from being born out of a need to adopt, Managed Service Providers are now evolving and differentiating, aiming to appeal, not necessarily solely on price, but also on the level of service and the length of the agreement.

According to Barracuda Networks International MSP Director Jason Howells the whole MSP offering, and MSP space, is evolving as it needs to with the whole IT space being so fast paced at the moment.

“There are several models in place, some people will offer a full service, some will offer a partial service. We are seeing the rise of managed security service provider more that I have ever known before and it’s interesting to see how managed service providers are evolving and becoming more relevant through that evolution.

I guess if you look at it a typical MSP model is a provider of a company that will remotely manage all the customer’s IT infrastructure, all the way down to the end-user systems, completely running the network and everything attached to it. That is, ideally, something that every MSP wants to do.”

Julian Box, founder and CEO of Calligo agreed but added that the “next area of evolution” that Howells talks about is going to be “totally different” to the market we see at the moment.

“The main area of evolution for MSPs in recent years has been in making delivery models more efficient and proactive, as per the move away from the break/fix model towards true managed services.

Now, prudent MSPs are now looking beyond simply maintaining networks and devices, or monitoring security, or even supporting cloud environments, and are instead focusing on helping clients with wider services across the entire data lifecycle.”

With Spiceworks finding that just shy of 90 per cent of businesses are expecting IT spend to increase or stay “steady” over the next 12 months in their 2020 State of IT report, the rise of the MSP model is a logical step for many businesses with an inability to manage that IT infrastructure.

This, according to George Anderson, product marketing director at Webroot, especially applies to the SMB market.

“The models that MSPs use to provide services vary but usually involve an annual contract with a monthly billing cycle, some offer a month-by-month contract and some offer other variations on this model. There also are wide variations in their technology services stacks, with some offering a single tier of services that the client can cherry pick from, while others offer a standardised – good, better, best package.

Small businesses face ongoing challenges with managing their digitalised services. For instance, most SMBs find it too expensive to maintain full-time IT staff, and even if there is an IT team on site, they often struggle to manage and solve every computing challenge themselves.

Managed Service Providers (MSPs) are an excellent way of providing IT services such as systems monitoring and backup, and emergency services such as disaster recovery, more cost-effectively and efficiently.”

AIDING THE TRANSFORMATION

From originally being asked about a certain field, the call for a completely managed IT solution has grown as businesses continue to pursue avenues to digitally transform their businesses, be that in collaboration, automation or the network infrastructure that the company is built on.

“Digital transformation projects should be driving new business for Managed Service Providers” said Christ Tate, business development director at Datto.

“Microsoft Teams, for example, is a great platform to enable SMBs to transform their processes and there are lots of applications that integrate with it that can bring business processes into the 21st century.

For MSPs to realise this opportunity they need to spend time with their clients to understand how they currently work and what could be transformed. Once they do, they can approach their prospects and current customers with a strategy to help them transform their digital processes led by the MSP.”

“It's always been about helping customers make the right decisions about their overall infrastructure, the direction they're going, influencing that and putting the right solutions in place.” Said Neuways managing director Martin Roberts. “That is about trying to automate as much of the troubleshooting and problem solving as we can, putting an agent in every machine, every device and reporting back to us so we can pick up on things before they are aware.”

However, despite the benefits that can be found from a MSP, Roberts says that the mindset of decision makers can be one of the hardest obstacles.

“Convincing customers of the value of going beyond break-fix and having that total managed service can be quite a difficult thing to do.

I sat down with one customer recently who was on break-fix for year and we tripled or quadrupled the monthly fee and there was quite a debate about why they should be paying that.

But actually, having sat down and gone through what we provide that organisation, the service and disaster recovery, the business continuity, cyber security, they actually saw the value of this a bit like insurance.

So on reflection, they looked at what they were getting and the number of times they contacted us and realised that they were actually value for money but it is quite a challenge to move from somebody who's paying, a consistent figure related to devices to a different figure that covers everything.”

VoIPCloud Wholesale managing director Arron Lewis said that, in is experience, the adoption of a technology from a provider’s perspective, has always been driven by what the customer wants, and he is seeing similar trends today.

“The adoption of Microsoft 365 was massive and has brought in the question of ‘why can’t I use Teams or Skype for Business to replace my phone systems’.

So, in a way the MSPs have been forced into looking into options because they don’t want to lose that segment of customer and if that customer finds another provider who can offer them teams, the chances are they’ll probably lose the MSP contract with them.”

FACING UP TO THE SKILLS SHORTAGE

Despite the dependence on the customer, with the shortage in skills that the IT market in the UK is experiencing at the moment, MSPs are capable of finding appeal in having a dedicated team to undertake digital transformation projects on behalf of a business rather than that company attempting to undertake such a project in-house.

“Digital transformation is a major focus with most businesses across every sector” said Anderson from Webroot.

“Organisations are being challenged to reinvent themselves, their business models and the way they interact with customers. A combination of process changes and technology adoption is creating entirely new digital lines of business and services.”

“Yet, to integrate sophisticated capabilities into technology, massive volumes of information must be collected in order to provide a seamless experience. By allowing technology to do this, consumers are inherently placing their trust in organisations to protect their sensitive information.

“The MSP approach also removes any struggles to install and maintain newly purchased products and stops diverting end user resources towards laborious IT support tasks or ad hoc break/fix reseller charges.

“The role of MSPs has become more important than ever, helping businesses navigate the increasingly complex space, especially when it comes to cybersecurity. The professional services and support offered through MSPs are helping businesses to attain a successful digital transformation strategy.”

However, as Tech Data Europe vice president of security and mobility solutions David Ellis said, with digital transformation comes an increase data which, in turn, brings an increase in risk.

“The thing about digital transformation projects is ultimately about getting value from data and I think the more companies that use data and the more valuably, in terms of monetary value that brings.

Digital transformation should give you a competitive advantage as a main customer. That competitive advantage comes from monetary value but if that monetary value is high then you’re going to be more of a target for cyber criminals.

So, security is absolutely critical in the digital transformation process and a lot of these projects are dependent on having confidence in your security is prerequisite of these projects happening.”

Julian Box added “Every function in the business is constantly creating, distributing and receiving data and, if it can be examined, have data science applied to it. However, few businesses, especially SMEs, have the skills available to them to either examine the potential of their data or to start data science, AI or automation projects that can make the most of it.

These businesses also lack the deep expertise to ensure their data processes abide by the national, international and industry-specific data privacy obligations that may apply to them. This is because data privacy requires more than a legal team.

Its implementation requires a heady mix of legal knowledge, understanding of technology and info security, and the ability to project manage major business change. There are very few businesses that possess all these skills, leaving them open to regulatory scrutiny and customer resentment.

If an MSP can provide proven services that ensure that data is collected and treated responsibly, and that support the monetisation of the data as it flows through the business they can then become a trusted advisors on so much more than simply how to use technology.”

SECURING THE TRANSFORMATION

It’s not just in digital transformation projects that security is a priority. With every report that is published the threat of ransomware, phishing and denial of service attacks get worse.

But, as with new technology adoption, SMBs face the challenge of resources and manpower, opening up an opportunity for MSPs.

“Security is absolutely front and centre stage right now, in the press and in the news every day of the week” said Jason Howells.

The speciality needed to be able to cope with the sophisticated attacks that are happening today mean that many small businesses don’t have the budgets or the ability to put those defences in place. So, to have a managed service providers to be a specialist in certain areas is hugely valuable to business right now.

It doesn’t really matter the size of the business; we are seeing small businesses who want everything managed by their managed service provider. Then we have larger organisations that have their own IT capabilities but need that additional layer of complex security knowledge to make sure that they are also secure. So, we are seeing it right across the board.”

Ellis also said that he believes that the trend for businesses to look to MSPs for Cyber Security has come as a result of businesses wanting a flexible approach to the services they take and the associated cost.

“Right now, people want to buy as a service so they can turn it on and off. They want more flexibility with pricing, which means there is a real big trend towards MSP delivering services, particularly in the security world because it’s a moving target.

The skills shortage in the area also means small to mid-sized companies can’t keep and can’t afford the people in the first place. So, if they can work with an MSP then that MSP takes ownership of that security project it’s one thing that these SMBs don’t need to worry about and don’t need the skills in house that are becoming increasingly important in this market.”

ADDING UP THE OPPORTUNITIES

Arron Lewis of VoIPCloud Wholesale said that this trend towards MSPs has been somewhat dictated by new buying behaviours we see today.

From Office 365 to the devices we use for calls, text and whatever else, the idea of paying for multiple products or services at a recurring, monthly rate (or bundling) is now a staple of our consumer lives.

Distology CEO Hayley Roberts said that this is a trend that MSPs are cottoning-on to. She said “Our resellers are now having some form of managed service proposition and our vendors that we are working with are creating their products to fit with an MSP model because that’s the way they see things going.

They realised that if it was easy to procure and it was easy for resellers to adopt and sell out then they have more money as a vendor because the cost of sale goes down. A lot of the SaaS products that come out will have an MSP offering so it naturally filters down through the channel.”

However, for any reseller interested in adopting an MSP model, the advice is clarity when combining services is something to aspire to. That goes for vendors, as well as providers.

Pete Hughes, technical director or Aura Technology said “One of the major pain points for modern MSPs is productization of services.

Having a clear product portfolio allows an MSP to go to market with a clear understanding of exactly what should be sold, delivered and supported. Vendors like Datto help by providing services that can easily be consumed by MSP’s and taken straight to market.

Support with product information, competitive comparison and pricing methodology is very important here as it needs to be uncomplex and easy to transform through to the customer.”

Barracuda International MSP director Jason Howells aggreed that clarity is paramount to success alongside knowing the right businesses to work with.

“I think it’s important for a managed service provider to go out there and promote themselves, their own services and what their capabilities are” he added. “That is what will differentiate them in the marketplace.

It’s also important for MSPs to be able to take several different solutions and bundle them together by choosing the right vendors and solutions to work with them and piece those solutions together.”

The Calligo CEO agreed, adding “Many businesses employ an MSP because they lack IT skills internally.

“Providing a long list of itemised services can often confuse a customer with no IT expertise, and even cause misinterpretation.

“However, if those services are bundled, and underpinned by clear service level agreements and deliverables that align with the business objectives, then the service is far easier to consume, measure and ultimately, trust.”

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