Managed Services: What’s Changed and How Do I Fit In?

Posted by amy on Apr.17, 2014

I had a wonderful week in San Diego meeting with long time friends and colleagues at CompTIA’s Annual Member Meeting (AMM).  I was able to participate in a few of the Community meetings and in particular I spent some time with the Cloud Community listening to statistics, predictions, and proposed solutions to the dilemma we all face, “How to evolve in the new Cloud era.”  I heard things like, 50% of the Channel will go out of business in the next 5 years if we don’t evolve our model to the new hybrid cloud model.  I heard that the one most significant things we can do to increase our chances of being in the 50% of the Channel that will survive the next 5 years was to evolve our marketing and sales to be able to articulate the value of what we do.  This got me thinking about a few things.  Most significant was that I remember 10 years ago we were all being told that 80% of use would not survive the next 5 years if we didn’t evolve into Managed Services.  We were also told that we must learn how to market and sell Managed Services in order to survive.  As we were 10 years ago for Managed Services, we are definitely right in the middle of the Hype Cycle for Cloud!

The core of the issue here is that as the cloud has brought massive upheaval and change to the channel, MSPs are looking at how they can evolve to stay relevant.  Some of this change may involve their core messaging, but I really don’t think that’s the core issue for most MSPs today.

I think that what holds most MSPs back right now, today, is that they are struggling with thinking they have to come up with a new value proposition.  This isn’t the issue.  MSPs have been offering “Cloud” services for a decade – we just didn’t call it “Cloud” ten years ago.  We hosted our technologies in our own data centers or in a co-lo somewhere.  What we were doing was called “Managed Services” and part of that meant we had to deliver our services from the data center (cloud) and on-premise, and we had to manage it all centrally and remotely.  By definition this is a “hybrid” model.

The reality is, MSPs are in the same situation we were in a decade ago – we have technology management needs that vendors have not been able to meet fast enough.  We have RMM tools, but they aren’t evolving fast enough.  We have security tools, but they aren’t evolving fast enough.  We have data protection tools, but they aren’t evolving fast enough.  And the biggest problem of all is that there is no fully integrated solution that allows an MSP to manage it all – data, users, mobile devices, applications, cloud solutions, on-premise solutions, etc. from a single dashboard.  And I haven’t even mentioned provisioning and billing which are just as important.  So, just like a decade ago SMB MSPs must piece together vendor management solutions to get by – to be as efficient & productive as they can so that the solutions they provide can help their clients be as productive and efficient as they can.  Not a whole lot has changed from this fundamental problem.

So, what fundamentally has changed?  Mobility and Vendor Routes to Market which have caused Channel Disruption and Confusion throughout.  The network started to become much more distributed within the last decade, but now technology (enter the cloud & mobility) has allowed any of us to work from anywhere.  This requires a new or evolving approach to “IT Management” in all aspects: data protection, network management, user management, security, application management, etc.  These factors require more than a change in or adjustment of your messaging.  It requires better network management tools, better security tools, better application management tools and better data protection tools all integrated and manageable from anywhere. It also requires the MSP to elevate their solution set to encompass all of these things and not “just” LAN management.  Managing technology has become much more complicated as the Cloud has become “real.”

And, with new routes to market for vendors the Channel has been disrupted and confused in a fundamental way not seen in a very long time, maybe never seen before.  It is now not only possible but very easy for cloud vendors to completely by-pass Distribution and the Reseller Channel and sell direct to the end user.  Some of the largest companies in the world are wholly capable of delivering the exact same services that the MSP has been delivering for the last decade the difference being that it’s “instant on” and very cheap.  Basic network management is no longer a viable service to deliver to their client for the MSP regardless of the messaging they use.  Anybody can do it.

As cloud became real and users and devices became mobile, the need for better tools to manage it all has elevated dramatically.  Couple this with the massive disruption the cloud has brought to the channel model, MSPs must continue to evolve at a faster pace with an elevated solution set that delivers beyond basic network management.

I think the most significant challenge the Channel faces today, and always has faced is evolution.  Technologies change and the Channel always has to strike a balance between delivering the best solutions at the best price and value with knowing how to discern where the world is moving and how they can stay relevant.  Staying relevant to their end users is a significant challenge and no matter what technologies are disrupting us today from mobility to security, the Channel will always be trying to reinvent themselves to continue to provide the right solutions coupled with the right value proposition and doing it profitably.

Amy Luby, SVP Sales & Marketing

JetStream Networks, Inc.
39355 California St., Ste 100
Fremont, CA 94538
864-881-7150 [desk]
864-991-6221 [cell]