With the maturing of managed services, the compulsion to go with the lowest bidder has eroded in favor of more experienced partners who understand the business and help one achieve strategic goals. Establishing a strong and beneficial relationship with your MSP is essential in the long run.
Relying on a managed provider (MSP) to provide a subset of your IT services can be beneficial. Beyond just tackling an individual domain such as email hosting or CRM, an MSP as part of your IT infrastructure can help free your internal resources for more strategic purposes.
Sustained Growth
Managed services comprise the most popular business model in the channel today, as well as a leading generator of revenue in the IT field. The rate of growth of managed services though slow is more or less at a steady pace. Accelerated momentum is seen in the space around SaaS. This trend follows SaaS players being actually MSPs themselves with either being born in the cloud or existing MSPs who have added a SaaS component to their portfolio.
Bargain Shopping
MSPs are increasingly handling the IT needs of organizations hand in hand with the internal IT departments. Consequently, companies have become more confident with managed service providers and turn to them for specific IT needs, including CRM applications, email hosting, online storage, backup, recovery and network monitoring.
However, this is also resulting in commoditization due to oversupply, especially at the lower end of the pyramid. This is also resulting in CIOs to bargain hunt for managed services, a trend that should definitely be discouraged. To avoid that, it’s essential for MSPs to understand the business rather than mere technology. Organizations looking for a partner who understand business outcomes and how services can help further the goals of a business rather than a technology perspective.
Whats most important though is a proven track record — especially testimonials from existing customers. What should be a red flag is when an MSP offers a run-of-the-mill service-level agreement (SLA). On the other hand, a customized contract based on your business and needs is a very positive sign.
Extensive Offerings
Strategic MSP use need not be restricted to commodity IT services. MSPs who can deliver advanced services like application management, cloud infrastructure management and business process outsourcing too are increasingly in demand. There is also increased demand for offerings related to business intelligence, data analytics, and advanced application monitoring. While some of the top tier providers are gearing up to meet those needs, most MSPs are yet to extend themselves beyond basic offerings like network management and software infrastructure.
Partner, not substitute
While companies are increasingly taking to outside providers in part for their IT needs, MSPs are better off generally complementing rather than outright replacing internal IT.
In the past, cost savings were seen as the most significant benefit of MSPs. But now, cost benefits are taken for granted while customers are opting for additional aspects like generating revenue and making the operations more efficient.
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