Managed Service Providers (MSP)

A collaborator in my network recently posed the following on LinkedIn and I wanted to take the time to create more of an in-depth response to this important question:

2018 demand for the unspecialized managed hosting provider: a one-act play.

Is your brand just riding the demand wave for generic web hosting into the ground?

Dozens of other graphs do run the opposite direction right now. They're diamonds in the rough, though.

I can't name an MSP to survive the past two decades without some special quirks. Some are subtle, but they're there.

What are some of the most overlooked and impactful ways to differentiate a managed IT offering in 2019?

The Proactive Bird Gets the Worm

Differentiation is not a strategy unique to managed service providers (MSPs). The best businesses—and MSPs—are proactive in evolving their service offerings. The trend that seems to have taken hold is to wait for customers to ask for new technologies before adding them to the portfolio; however, this is a mistake. Reactively running your business takes you out of the running as a thought leader and can be damaging to credibility. The real leaders are the ones who anticipate customers’ needs and bring new technology to them before the ask. Not only does it set you apart from the competition, but it puts you in a position to guide users and present yourself as an authority figure on navigating modern IT environments.

Staying ahead of demand has financial benefits, too. Obviously, better profit margins are often the result, as well as the ability to get services to market quicker. At the pace current IT services are developing and evolving, being “first in” is a coveted spot. It puts brands in a position of power, especially as services become commoditized, to be an expert rather than just a follower.

This doesn’t mean, however, that you should ignore customer requests and simply toss them in the bucket of “too late”. Certainly be responsive and build service offerings and bundles that are built upon your core competencies and tailored to customers unique needs. The key is to be proactive where possible. Survey customers about their top pain points and concerns. Anticipate that customer needs will evolve and meet them with a solution before your competition gets an edge in.

Partner Where Possible

We live in a vastly interconnected world where new innovations spread like wildfire. To keep up, MSPs face a significant challenge in terms of time and resources it takes to continually be building out new capabilities. Building out new services and infrastructures eat away at internal resources, are costly, and take time. Worse yet, they can land MSPs behind the curve if not well-executed.

An alternative, to maintain speed to execution, is to partner with providers that can augment your core offerings. By working with rather than competing against those that already develop in a particular line of space, MSPs can add valuable benefits for customers by reselling services. This reduces the cost and time-to-market burden, while still enabling your business to compete and satisfy customers. The key is to partner with vendors that offer excellent support services and solid reseller resources.

In looking at how MSPs are sliced, it’s easy to see where there is room to leverage the expertise of third parties to bolster your own offerings. Consider how one or a few of the following may be an add-on service that creates additional value for your customers:

  • File collaboration
  • Security
  • Consulting
  • Disaster Recovery
  • Analytics
  • Monitoring
  • Server Administration
  • Networking/LAN/WAN
  • App Hosting/SaaS
  • Helpdesk

Poke Your Head into the Cloud

The trifecta of an excellent MSP business is: 1) great product, 2) top-notch service, and 3) quality customer support.

This can be stifled by faulty or old infrastructure, poor management of said infrastructure, or inefficient processes. Many times, MSPs build up their business by offering new services and then building custom processes or mechanisms around that service. The machines, mechanics, and processes around these new services then become silo’d, making the entire operation laden with complexity and labor-intensive processes.

The cloud has been a huge solve for many of these downfalls. By leveraging cloud infrastructure and the associated management processes and tools, MSPs can more easily launch new services without the complexity, time-drain, and costs.

MSPs should aim to reduce or eliminate ad hoc, customized systems and replace them with standard practices, automation (where possible), and easy-to-scale platforms.

Last Word

The managed IT services market is crowded. These businesses must go above and beyond when it comes to delivering what they say they can deliver and anticipating customer needs before they arise. Having the right technology tools, partnerships, and infrastructure are all critical components of differentiating in 2019.

The idea is to focus on what you’re good at but also augment with value-added services that will keep current customers happy—and compel new customers to buy into your well-rounded services.