The Four Trends Impacting MSPs, and Who Will Come Out on Top

posted by Brad Schow on Monday, December 12, 2016 in Unified Communications and IT Blog

One of the benefits of working with over 450 MSPs through our peer group organization, HTG, is that we get to see trends as they develop.  Heading into 2017, here are some of those trends we’re observing.

  1. Traditional hardware sales are slowing and many companies are forecasting lower product sales for 2017. We are seeing continued movement of traditional infrastructure to the cloud.  Office 365 is now the norm.  More and more server infrastructure is moving to some kind of cloud hosted solution.  MSPs are building and leveraging relationships with hardware, finance and cloud hosting partners.  These MSPs are putting themselves in a position where they maintain a voice strategically with their clients about what, when and how compute moves to the cloud.  They are building the necessary relationships to offer the right cloud hosting options to their clients.
  1. Security is becoming table stakes. MSPs are either including some “security as a service offering” with their standard product to begin branding security services, or they have spun up a separate “security as a service” product offering.  The need is there and the product sets are just becoming mature enough that MSPs can put together an offering to deliver a security value proposition worth paying for. 
  1. There is an emerging new breed of MSPs.  These MSPs are born in the cloud companies and are looking to do a land grab. They have a minimal staff that is mostly sales and they leverage cloud partners to deliver computers and service.  Their goal is to snatch up as many client seats as they can as they look to be become efficient at delivery. Once they begin to make money they will eventually have enough numbers of seats to make the model viable. The best MSPs continue to have a relationship-based conversation with their clients and put resources in the cloud when it makes sense.  They maintain the value they deliver by helping the client set a sound strategic approach.
  1. The number of devices continues to grow and it’s expected to mushroom in the next 3-5 years.  The Internet of Things is still a bit of a gray box, but the unrelenting reality is the staggering number of devices that will be connected in the next few years.  The best MSPs have their eye on what industries will be affected first, what that means for the services they currently offer, and are forging plans about what they will do to cover the influx of devices.  They are also positioning their value proposition with clients to ensure they can monetize this change.

These emerging trends are significant and the leading MSPs are responding appropriately.  How?  Along with the behaviors previously discussed, there are common behaviors among the best MSPs: 

  • They have well-functioning leadership teams in which they continue to invest. 
  • Those leadership teams are aligned around a consistent, well planned strategy.
  • The company leaders are good at delegation and are deliberately building and equipping strong leaders.
  • They are focused on maintaining culture.
  • They are focused on building the right vendor and distribution partner relationships. 

Inevitably, things will change.  Threats, opportunities, and competition will continue to push us.  The reality is that the basics of business still hold true and work through – and especially in – changing times.

Finish 2016 strong and have a great 2017.

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About The Author

Brad Schow is the Chief Operating Office of HTG Peer Groups and is part of a team of coaches and consultants serving the IT industry. Prior to joining the HTG Peer Groups staff, he spent 20 years helping grow a managed service provider that was a member of HTG. His path of technician, service leader, operations leader, president and partner provides a unique perspective allowing him to relate to a broad spectrum of business challenges. Brad loves investing in people, thinking ahead, building teams, and helping others find success.

  1. cloud
  2. managed services
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