The Biggest Challenge for MSPs…What the Heck is an MSP?

In IoT by Daniel Newman1 Comment

The term managed service providers—or MSPs—has been around for nearly a decade, but what it really means is one of the biggest conundrums in the IT industry. We all know an MSP is a company that manages and maintains the day to day operations of the network and/or IT functionality on behalf of its clients, outside their premises. But, that sounds just like outsourcing, right? What’s the difference?

These are probably the questions your clients throw at you every time you give them some version of the aforementioned, slightly clichéd definition of who you are and what you can do for them. I can’t say I blame them. MSPs and outsourcing do overlap at some points, so although some confusion is understandable, MSPs and outsourcing are not the same thing.

MSPs and Their Identity Crisis

In reality, MSPs go way beyond outsourcing, in effect becoming an extension of their client’s business. The MSP, as Kenneth Hess pointed out in his article, is “always there, working in the background.” The relationship between MSPs and their clients “is a symbiotic one where both parties benefit from the other’s successes,” he says. The existing or more popular definitions of MSPs fail to draw attention to this very important aspect.

Other benefits that MSPs offer over outsourcing are:

More client control. They allow management to retain total control over certain areas of their organization, while “partnering” with them in other areas.

Enhanced flexibility. Companies can leverage MSPs to make up for their lack of in-house infrastructure and/or talent, and easily make adjustments if and when they are ready to move that position back into the business.

Fixed subscription fees. With fixed pricing, businesses can better predict their costs and budgets, and control them as and when they want.

Pay-as-you-grow model. This is a great option for businesses looking to scale, since it helps them manage growth and expansion.

I agree with CompTIA Senior Director Carolyn April who said in a press release that “[t]he definitional issue is an enormous one” in the field of managed services. The truth is, this industry suffers from an identity problem and if we want to fully achieve what is possible in terms of offering high value managed services we need to turn the corner on creating a better “public” identity. This requires a re-thinking and rebranding of the whole concept, which currently is vague and misleading, at best.

Identity Creates Opportunities

“MSP” means different things to different people. In fact, just like technology, the MSP’s role has evolved quickly over the past decade or so, and is still evolving. From the traditional break-fix business model, MSPs have transitioned into providers of more complex and higher value services. For instance, an MSP can remotely manage a client’s network and infrastructure while also supporting their endpoint devices and building solutions around mobile device management. At the same time, some MSPs provide security services like remote firewall administration or disaster recovery, while others have ventured into cloud services.

When MSPs fail to relate the wide-ranging nature of their business to their clients, their job often gets relegated to mere IT project management, or reactive rather than proactive work. This not only limits the opportunities for MSPs, but also proves to be a detriment for clients. Moving forward, MSPs need to start thinking more like the businesses they serve, especially when it comes to the way they market and publicize their value proposition.

How Can MSPs Do That?

Avoid the MSP label. While marketing their services, MSPs need to drop the misleading and vague label and instead focus on the specific services they offer: For instance, managed network monitoring, managed data hosting, software-as-a service (SaaS), and so on.

Ask the right questions. To be able to suggest the right combination of solutions from their repertoire, MSPs need to know what their clients need. The following questions can help them easily figure that out.

  • How big is the client in terms of employee strength and infrastructure?
  • Do they know their current requirements, if yes, what are they?
  • Which needs do they feel are not being addressed?
  • Are there additional services they may be interested in? What are they? (This is where MSPs can tell them all about their service offerings and which solutions might best drive their client’s business goals.)
  • What is the level of support they need?

Embrace modern marketing tactics. Modern marketing techniques like content marketing can help MSPs drive brand awareness, as well as educate potential clients about their service offerings and the possible benefits.

For MSPs to sustain and grow, it’s important to solve their identity problems, since “identity” ultimately reflects on two of all of our most important success factors—relationships with clients and overall service quality.

Additional Resources on this Topic:

Four Things World-Class MSPs Do to Grow
The Perpetually Valuable MSP: Determining What Should Be in Your Portfolio
MSPs, IoT, and How Consumers Think About Privacy

This post was brought to you by IBM for MSPs and opinions are my own. To read more on this topic, visit IBM’s PivotPoint. Dedicated to providing valuable insight from industry thought leaders, PivotPoint offers expertise to help you develop, differentiate and scale your business.

Photo Credit: pherjtay via Compfight cc

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.


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