3 Modernization Trends Shaping The Future Of MSPs

By Eric Weast, ECW Network & IT Solutions

From our perspective as a continually-evolving MSP and in conversations with colleagues, it’s clear that the industry is now in the throes of particularly significant modernization.

Whereas services based on physical infrastructure were once the cornerstone of MSP offerings, cloud adoption – paired with security that can protect client data wherever data resides – trend among the top priorities that clients seek from MSP partners right now. Clients are increasingly looking for support migrating to 100% cloud-based architectures and maintaining no physical servers at all. More client employees now work remotely, of course, requiring remote security measures able to match those used in centralized offices. Modernized technology is also transforming MSPs’ reach, with telepresence and even AR/VR solutions making it possible to serve clients and apply expertise without physical limitations.

While these rapid shifts have been accelerated by the pandemic, they represent the shape of things to come which would have arrived regardless and client requirements that MSPs must adapt to and deliver. Here are three key modernization trends where MSPs would do well to get ahead of the curve:

Embracing The Cloud And Serverless Architecture

In the past, outfitting clients with on-prem infrastructure represented a significant portion of our business. However, in the past year, our company has sold exactly one server…while growing by 30 percent. Modernized MSPs are now cloud-first, security-first businesses. Clients are flocking to modernized MSPs in pursuit of their cloud transformation goals. We’ve had multiple clients come to us with plans to close down their offices and operate purely on the cloud going forward.

If you’re an MSP leader already calculating the new cost structures these changes would necessitate as you read this…well, your heads in the right place. My recommendation is to streamline cloud service pricing. As modernizing MSPs provide less and less physical infrastructure, the days of metering servers will likely come to an end. In its place will be simple per-user support fees, with MSPs eating any remaining server costs to transition them to the cloud or another stateless setup.

In our case, a few surprising initial quotes for serverless clients made it clear that we needed a new cost strategy. The initial challenge was to deliver optimized cloud offerings without taking a bath on the revenue that used to come from server infrastructure, backup and disaster recovery (BDR), and other on-prem services. Our modernized approach now brings cloud clients onto Microsoft Azure and our Azure AD service, while backing up all data on Azure in our own data center using Veeam. In this way, we can better protect data and provide valuable BDR services, along with cloud infrastructure and simplified billing.

Changing Security Requirements Call For Every MSP To Be An MSSP

Just as clients are replacing physical servers with the cloud, their physical offices are becoming abstract and distributed as well. This shift is upending traditional security models, driving clients to ask their MSPs for modernized solutions. If employees don’t work in the main office, they don’t have localized platforms like a SonicWall or a Fortinet securing their workspaces. VPNs are present in most traditional security stacks but, if an employee is disconnected, they lose that layer of protection at the firewall. Any employee-used device with access to company data also requires robust data encryption and security measures in place in case that device becomes lost or stolen.

In our case, we use BeachheadSecure to implement encryption and remote data access controls on all devices used across a client’s organization. We then also can allow or deny data access based on geofencing data, which is well-suited to securing devices in modern work-from-home scenarios. We’re also pursuing R&D into next-generation IT security solutions, such as persistent VPNs and firewalls able to protect individual employees wherever they are.

MSPs face increasing pressure to become modernized security-first providers. But at the same time, we’ve found it’s important to keep offerings simple from the client perspective, even as the technology delivered becomes increasingly complex. Just as with the cloud, there’s near-limitless nuance to the bells and whistles a security stack can include. But at the end of the day, clients outsource that technical understanding to you, and peace of mind is the real product. Again, it’s best to provide a straightforward pricing model that delivers a security stack with all the features a client requires, with perhaps a few bonus options for those that need SIEM or that have specific compliance checkboxes. It’s also important to stick to your guns if clients ask for a bargain-basement approach that cuts corners: compromising your crafted security stack just raises dangerous risks for both the client and your own business.

Geographical Limitations On An MSP’s Reach – And Competition – Are Disappearing

A MSPs’ location no longer determines where it does (or at least where it can do) business. While our company is headquartered in South Florida, we’ve now hired remote employees across the country. We serve clients in almost every state, with a majority of them using cloud-hosted infrastructure. Once MSPs overcome the traditional mindset of seeing distance as a limit, they can simply focus on delivering services wherever clients happen to be. Modernizing MSPs should explore this approach, as both clients and competitors increasingly realize that the industry landscape needn’t map to the physical one anymore.

Looking forward and to get a little more specific into the “how” behind this, I expect AR and VR technologies to play an increasingly important role for MSPs. With an AR headset, you can put the brain of your best engineer on any set of hands in the country. Any technical service or repair job can be accomplished just by keeping an AR headset at the client’s site. This shift in how services are physically delivered will open up countless possibilities for the MSPs ready for them.

As traditional physical barriers fall, MSPs will be able to capitalize on tremendous advantages if they can acknowledge and embrace modernization, and then adapt their technologies and practices accordingly.

About The Author

Eric Weast is the owner of ECW Network & IT Solutions, a managed services provider headquartered in South Florida.