New Rules For MSP Survival

By Ron Dupler, GreenPages and Jim Lampert, OpsRamp

How MSPs can support and facilitate new IT operating and business models in 2020 and beyond.

Our nation’s healthcare providers, government agencies, school districts, businesses, and IT teams have been tested beyond measure since the Covid-19 virus disrupted daily life and we all know that the test isn’t over yet. In the coming weeks and months, business leaders will be learning many lessons of which operating models and survival tactics proved to be resilient, and which brought the house down. Managed service providers (MSPs) are not immune to these disruptions and should take time to evaluate current business models and customer needs to determine the best next steps. Having the right digital strategy in place is more important than ever.

We’re already seeing evidence that enterprise IT organizations that had a progressive digital infrastructure and mindset before Covid-19 are riding the wave of this pandemic rather than being smashed by it. Take Chipotle, the national Mexican restaurant chain, which just reported an 8 percent increase in sales for the quarter to $1.4 billion. Digital sales grew 81 percent. Since the company brought on a new CEO in 2018, digital investment has accelerated – with its mobile app, rapid pickup lanes for mobile orders, and online delivery partnerships. Covid-19 business continuity (and survival) tactics have centered on the ability to react swiftly with new digital processes and services to support government mandates for sheltering in place and social distancing.

If there was ever a time for MSPs to push faster on their digital transformation plans, it is now. This may result in changes to internal operations as well as the distinct services MSPs deliver to their enterprise customers.

First, It’s Important To Understand What Enterprises Are Facing Right Now

Most CIOs are being asked to analyze IT spend closely for critical near-term needs, such as remote workforce management and security. While some areas of tech spending will decline, overall, IT budgets won’t likely be slashed due to the criticality of infrastructure and apps in the WFH economy. A majority of IT leaders (58 percent) expect to either significantly or moderately increase their annual technology budgets right now and 73 percent expect to either accelerate or maintain digital transformation initiatives and projects, according to a survey conducted in early April 2020 by OpsRamp.

Enterprise IT organizations must help the business pivot in whichever direction is needed to maintain revenue or at least minimize revenue losses: this might entail new digital services, new customer service, and delivery processes and the creation of brand-new product lines altogether.

These are the tenets of business survival now, which MSPs must be able to support:

• Agile, adaptable culture: Organizations need leaders who can help employees quickly change the way they work and how they serve customers. Creativity and resourcefulness are the name of the game. IT and business leaders should provide clarity on the new mission and communicate frequently to keep their teams engaged and encouraged during stressful times.
•  Remote workforce-enabled: Employees working from home need security, reliability, and easy-to-use collaboration technologies. IT infrastructure performance and excellent digital customer experience is crucial: not only for employees but for customers who can now only interact with the company through digital channels.
• Video-enabled: Video technology has been a lifesaver for people during the pandemic. In some ways, it is facilitating closer, more meaningful connections between teams, partners, and customers. IT leaders will be focusing on security and networking capabilities in the coming months to ensure video calls continue without a hitch.
• Continual innovation: Enterprise resources and budgets may be constrained for the rest of 2020 and into 2021. Executives need to determine how to do more with less. The creative application of efficient technologies, such as cloud computing, coupled with a targeted business strategy is the way forward.

Adapting To Changing Marketplace Needs

MSPs have been moving to different business models over the past few years, as cloud computing, IaaS, and SaaS offerings have matured and become mainstream. Today, many enterprises have hybrid and multi-cloud architectures that have created unpredictable complexity from a cost and performance perspective.

MSPs, some of whom refer to themselves as cloud service providers (CSPs), can play an important role in delivering tools and expertise to manage this complexity so that customers can gain the maximum ROI from their investment in cloud and other modern technologies. Here’s how:

1. One vision: Many IT leaders are operating twin stacks to run this dual traditional-modern infrastructure. Technologies, skills, and processes need to merge into a single vision and execution model.
2. Central visibility and management: As well, the proliferation of legacy and best-of-breed monitoring and management systems have made it impossible to understand IT health across all locations and infrastructure. This needs to be rectified through a tool consolidation and justification strategy and the establishment of a unified platform from which IT can efficiently manage performance and cost.
3. Strategic skills: MSPs also can fill gaps in cloud and DevOps expertise which remain prevalent in IT. The OpsRamp survey found that technical expertise was the top benefit of working with an MSP.

Technology has been driving our global economy for many years, but it will be imperative to survival in many sectors from now on. The applications, infrastructure, and strategies companies invest in today may well dictate if they exit the pandemic in a position to compete or in one of bankruptcy.

If your business is behind the curve a bit on modernization, don’t despair. With hyper-converged architecture, software-defined infrastructure, and networking (SDN), container orchestration platforms like Kubernetes, and widely adopted best practices for cloud migration and DevOps, the path forward is simpler.

About The Authors

Ron Dupler is CEO of GreenPages and Jim Lampert is VP of Service Provider Sales at OpsRamp.