MSP Survival
Thursday, February 04th 2016 by Kirill Bensonoff
A recent Mordor Intelligence industry report predicts that the global managed services market will grow to $229.59 billion by 2020 at a CAGR of 10.20%, from estimate of $128.19 billion in 2014. While a seemingly promising outlook for MSPs, most haven’t realized the shadow: A lot more “newbies” are entering the markets and contributing to an unprecedentedly fierce competition.

For example, the 2015 IT Nation – a premier conference for managed services providers (MSPs) & technology solution providers (TSPs) and the largest event of its kind – has witnessed a 50% “newbie” attendees for the first time.

The result is clear: with increased competition and further commoditization of the MSP service stack, the majority of “mediocre” MSPs business will be stuck in one place. Growth beyond $2-3m in revenue for new MSPs will be even more difficult then it is today, and multiples for those exiting the managed services business will be diminished.

Here are 3 things that I learned while running an MSP for the last 10 years, these will help you grow, build lasting customers and stand out from the crowd:

  • Play an increasingly crucial role in architecting technology, not only on the technical, but on the business side as well.

  • Become a trusted advisor to your clients. Your largest clients should have your organization’s senior management cell phone and be able to call in case of major issues and important questions.

  • Develop a cloud and a hybrid strategy. Yes, most things are still on-prem, but think about this – most new businesses starting out today will get everything they need via cloud – applications and infrastructure. If you are not talking to your customers about cloud, someone else is.

While 2015 turned to be a year of concept of hybrid cloud and a “stepping stone” towards a “cloud world”, 2016 will be the time for MSPs to move beyond and take a more proactive role in helping customers transform their IT and take full advantage of cloud and hybrid approaches.
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