The managed services provider (MSP) marketplace is changing, and it is changing fast. The managed IT services industry has been in existence since the early aughts, serving primarily small- to medium-sized businesses globally. With IT being so integrated into every aspect of business, to say that it’s been an interesting evolutionary path for MSPs is putting it lightly.
COVID introduced new pressures to the MSP industry, from heightened cybersecurity vulnerabilities to rapid remote working adoption to cost pressures to facilitating new methods of collaboration. On the plus side, along with these increased pressures, come increased opportunities. And James Davis, Managing Director, APAC for Sea-Level Operations, a key provider of MSP coaching consulting services, shares a few key things MSP decision makers should be thinking about as we ease into the new year.
The Disruptions Will Keep Coming
It’s been a couple of years that have been chock-full of disruptions, and this isn’t going to change anytime soon. Here are a couple of upcoming disruptions that really need to be on the MSP radar.
Microsoft commerce platform
Microsoft’s new commerce experiences are coming in the early part of the year and are going to force a lot of change. MSPs need to be thinking about the mechanisms around how this will actually impact their business. Getting locked into your distributor. Changing and upgrading licenses. Managing subscriptions when clients change MSPs. All are food for thought.
Changes to insurance
MSPs need to consider pending insurance changes that may have the capability to dramatically influence their business.
“I think we’re going to see insurance providers really disrupting our market,” Davis shares. “Firstly, it’s probably going to be with the clients. MSP clients are going to start to see changes in premiums and more standards in place. And for the MSPs that don’t have enough standards in place, it’s going to dislodge clients and send them to these larger MSPs that are developing more robust security policies.”
The Cloud Is Only Going To Get Bigger and Bigger
Migration to the cloud is showing no signs of slowing down. Just consider these statistics:
- The cloud computing market was worth $370 billion in 2020 and is expected to reach almost $850 billion by 2025.
- Almost half of all businesses store their most critical and classified data on the cloud.
- Cloud data centers processed 94% of all workloads last year.
“As far as the cloud goes, we’re seeing more SaaS being used, less on a server environment, so there’s a lot to manage there,” Davis explains. “The traditional MSP infrastructure support is adapting and changing and commoditising, but not really updating their offerings, which is going to become more important from a cybersecurity perspective.”
Client Cybersecurity Education Is Critical
Are you having those critical high-level business security conversations with your clients? If not, you need to be. Operationalising security best practices must be prioritised. It’s no longer sufficient to simply throw some technology and security controls in place and call it a day. Security awareness education and training is now more important than ever. Cybercrime is up 600%, courtesy of COVID, and the average cost of a data breach is up by $137,000, due to an increased remote working environment. While the technology and security controls are definitely required elements of proper cybersecurity, 95% of breaches result from human error, and cybercriminals are continually adopting new social engineering strategies with this startling statistic in mind.
Understanding and Serving Your Clients
To be successful moving forward, your 2021 approach to serving your clients needs to change. A great place to start is by taking the time to get to know your clients, how they engage, and truly understand how their space has changed in the past two years. How is your MSP differentiated? With such similar language and similar tools being used on an industry-wide basis, MSPs need to get very intentional about their competitive advantages in order to stand out from the rest of the MSP market.
Business reviews and quarterly business reports (QBRs) are proven tools that Sea-Level Operations endorses using as ways to differentiate yourself, as Davis explains.
“That QBR can be a really good starting point because it identifies what the clients actually valued. So many MSPs jump right to technology and performance reporting, but I can guarantee that a good portion of your client base doesn’t really care about this reporting. A QBR really allows you to dive in and get clear about their pain points and what they truly like.”
However, QBRs may not be right for every client of an MSP, and they should undertake an exercise of understanding what a client wants and actually needs from them as a provider. “Business reviews may be of more value to your clients, and a good MSP will take the time to listen and schedule meetings as appropriate,” says Davis.
MSP Organisational Success
What kind of MSP do you want to be? Sea-Level Operations teams of coaches provide one-on-one MSP coaching designed to help your organisation build processes and frameworks for optimal success. With decades of experience under our belts, our proven 5 Phases of Operational Excellence framework as a guide, and with a rich resource library (including diverse content – this video on common challenges with PSAs and project management and this blog outlining their 5-step process for managing the company), Sea-Level Operations understands the changing needs of the MSP space and how to remain competitive. Connect today and schedule a time to chat about how we can help your organisation best take advantage of all the opportunities that 2022 has to deliver.