Stefan Diedericks, OracleNow is a good time to be a managed service provider (MSP). More and more sectors are looking for the dynamic benefits of modern technologies, a trend led by cloud. This thirst for innovation and evolution can’t be quenched by more traditional IT solutions models, because companies aren’t simply looking to offload operational burdens.
According to Stefan Diedericks, alliances and channels director at Oracle, companies want something more specific. “In the enterprise space, these opportunities aren’t volume based, but rather based on an exceptionally close innovation and transformation strategy execution relationship with the client.”
Buyers are more studious and arrive at deals already with much of the groundwork done. As such the focus falls on business outcomes, for which MSPs are well suited as they don’t go into large deployments or major overhauls.
This focus is distinct from more general outsourcing offerings, prompting change among some service-driven companies. This includes Dial a Nerd, which in 2013 started adopting MSP norms.
“The main aim was to provide additional value to our customers while reducing costs through increased efficiency,” says Aaron Thornton, Dial a Nerd’s operations director. “But the hope was that it would provide a new source of recurring income and solutions to allow us to acquire more business. It has delivered – not only have we found increased efficacy in our business due to the software we deploy, but we were able to start billing customers for purely monitoring and management solutions instead of labour and time.”
Services extend to detailed reports, which helps build confidence among the business executives for the technology they use. MSPs also typically work in a collaborative fashion, advising on new ways customers could harness existing technologies. It involves a significant capacity for consultation, prompting more sales. As such, vendors and large solutions providers have been creating MSP offerings or partnering with MSPs. So what is it that they look for in an MSP?
Meet the client
In order to answer this question, we must first consider the MSP’s potential customer. As mentioned before, managed services is not outsourcing, though it developed in the nineties as a variation on the practice. The major difference is that with outsourcing companies look to offload commodity technology they don’t have to understand.
But an MSP often covers services that are central to business strategy and the customer wants ownership of. Yet they often lack the skill, capacity or insight to truly advance their technology investments, gaps which MSPs can fill.
This suggests a mature customer with an appetite for new technologies such as cloud, says Jason Roos, director of Mimecast’s EMEA channel and alliances. “The ideal client is a mature tech customer seeking a decentralised solution to IT management. This speaks to cloud maturity and trust that there is no ‘loss of control’ in the movement to cloud.”
There’s not a particular limit to the size of the customer, since MSPs typically don’t take on massive contracts. Their purpose is often more surgical and aimed at specific areas in the business. Those services can expand, usually under the guidance of the MSP’s advice coupled with the customer’s roadmap. regardless, MSPs serve SMEs and startups as easily as they work with large enterprises.
The ideal MSP
For this reason, clarity of goals and vision is key, Roos explains. “Entrepreneurs shouldn’t chase every piece of business that comes their way, so a partner with a clear direction and strategy will, in my opinion, have the upper hand.”
Appropriate certification and a good security posture were also cited. But paramount, in Roos’ words, is business relevance. A singular focus and consultancy heft are the crucial ingredients for MSPs. Diedericks reflects a similar view: good MSPs offer a cohesive ‘one contract’ solution that includes provisioning, monitoring, reporting, optimisation and advisory services. A pedigree in cloud doesn’t hurt, either. “We find that those providers, which have control over reliable in-country datacentre capabilities, matched with unique business services, are key,” he says.
Yet while MSPs should be specialists, they can choose to cover many different areas. They also should possess all-encompassing skill sets, because skills are often the big reason why companies would consider an MSP. Thus it’s crucial that an MSP can talk with a customer along the scope of its technology plans, even if those don’t fit directly with the MSP’s role.
An MSP can become the conduit between the customer’s problems and appropriate solutions, says Roos. “Customers should select MSPs that understand and can articulate the roles, responsibilities and relationships between the customer, MSP and OEM.”
Aligned or agnostic?
This raises the question of how agnostic an MSP should be. Is it worth the time to become married to a particular solution stack? There are numerous service companies that do this already, delivering turnkey products to address commodity technology in organisations. But, again, this is a point of distinction: MSPs can offer such features as part of their solutions, but they should still cast a wide net in order to offer ongoing value.
This is particularly important as cloud behaviours evolve, says Diedericks. “As with on-premise computing, customers don’t only utilise one cloud and therefore the ability to navigate the integration, deployment and utilisation of multiple clouds reliably and with least risk has become a huge value to end customers. For this reason, most MSPs don’t offer solutions from only one cloud vendor but rather offer a unified business service from multiple industry-leading cloud vendors.”
Agnosticism is the wrong word, he says, as it suggests the customer will drive the selection of technologies. Instead, MSPs rely on their own partnerships to tailor solutions that fit specific situations in a company. For example, an MSP could specialise in data and AI, thus relying on different platforms and methodologies from different partners. The customer should only care about the outcome and that the solution is in harmony with its current investments and strategies.
Still, it doesn't hurt to be a little brand loyal, Roos concludes: “A belief in the capabilities of each of the products is key. The most successful MSPs I’ve seen are consumers of the products they sell and believers in a subset of complementary products. This drives an authentic understanding of, and desire to help customers deliver on their business outcomes. A ‘jack of all trades’ approach adds confusion to the buying cycle and complexity to the customer’s decision-making process."