Should MSPs Offer IoT Managed Services?
By Megan R. Nichols
Early adopters aren’t the only ones using Internet of Things (IoT) devices. There's now a serious market out there for business IoT devices. Even businesses that aren't particularly tech-savvy are increasingly interested in services that help them manage and coordinate enterprise IoT equipment.
The MSP market has responded. Many managed service providers are already offering IoT managed services as part of their portfolio or are considering supporting the tech.
A growing number of MSPs are providing IoT managed services, and the market for these services is growing fast. However, MSPs that want to provide this service will face numerous challenges that may outweigh the benefits and profitability.
Below, we'll break down how most MSPs have tackled providing these services and whether offering managed services for IoT will be the right choice for your MSP.
How IoT Has Impacted MSPs So Far
For the most part, MSPs view branching out into IoT managed services as the correct business move. A March 2020 CompTIA survey found that more than half of all MSPs already provide some form of IoT service. This phenomenon is occurring despite lagging enterprise adoption of IoT tech, with only around 29 percent of all enterprises currently using IoT devices.
The number of MSPs offering IoT services makes up a serious chunk of the market. This number may be a sign that in the not-too-distant future, IoT managed services may simply be standard offerings from MSPs.
Not every MSP is moving in that direction, though, and for many of them, IoT services aren't profitable yet. Fifty-five percent of respondents to the same CompTIA survey said IoT presents a revenue option today. Another 37 percent said they believe we are still a year or two out from IoT being profitable.
What IoT Managed Services Are MSPs Offering?
What "counts" as IoT managed services? If you want to add these to your MSP's portfolio offerings, what kind of hardware and software will you be investing in?
IoT is a broad term. Anything from radio frequency identification (RFID) tags to smart lights to smart sensors on heavy machinery can fall under its scope. For MSPs working with smaller clients, providing IoT managed services may mean coordinating a handful of Internet Protocol (IP) video, audio, and security devices.
Larger businesses may have different needs. Steve Garrett, chief product officer at OptConnect, a wireless MSP, told IoT World Today that he has worked with customers who "have rolled out 4,000 to 5,000 sites on cellular and have become overwhelmed and have learned they can’t scale their businesses anymore." These businesses will require an MSP that can manage robust platforms capable of coordinating these devices.
Some verticals also have specific needs. Demand for IoT in healthcare, for example, is increasing as hospitals look for devices that can streamline patient care and monitoring. MSPs that manage IoT healthcare devices like smart patient monitors may need to integrate these machines with specialized networks and platforms, like electronic health records.
In retail, managed services for IoT may enable more advanced marketing strategies. Before making a final purchase decision, 75 percent of patrons visit stores in person. Many retailers are working to create multichannel marketing strategies that integrate data from both online storefronts and physical locations. IoT devices in stores can collect valuable customer data but will need to be coordinated with other solutions, like e-commerce platforms and marketing automation tools.
Advantages Of Offering IoT Managed Services
The demand for IoT managed services is weaker than managed services for other technologies, like cloud-based solutions. However, many companies out there are struggling to deploy IoT devices or manage growing IoT fleets. MSPs that begin offering IoT managed services will provide these businesses with a service that many MSPs don't have yet.
The flexibility of IoT devices may also be valuable for some MSPs — many IoT machines are multipurpose. For example, an IoT speaker connected to a system that also controls a smart lock can serve as an office personal assistant (PA) and smart buzzer system, allowing visitors to talk with staff before being let in.
The IoT is not likely to be a major source of revenue for MSPs in the next year or two. However, the rapid growth of the IoT market and demand for this tech point can lead to the IoT becoming significantly more valuable in upcoming years. Experience with deploying and managing IoT services may quickly become an asset for MSPs. Early adopters of managed services for IoT may see their decision pay off significantly through the next few years and toward the end of the decade.
Challenges Of Offering IoT Managed Services
You can expect to face some unique challenges with IoT that you wouldn't have handled if your MSP didn't branch out.
Cybersecurity — and related concerns, like user privacy — will probably be the biggest difficulty. Despite major strides in the past few years, IoT devices remain challenging to secure. IoT equipment dramatically expands the attack surface of a business's network, making security difficult even for staff with significant, non-IoT cybersecurity experience. Compliance with industry-specific data privacy regulations may present additional challenges for MSPs with clients in certain sectors.
There are some steps a business can take to keep their network more secure after adding IoT devices. Creating asset maps, establishing network segmentation, and choosing to work with manufacturers that prioritize device security can all protect a network. However, you also will need to be prepared to train your clients and assist them with securing a network made more vulnerable by IoT devices.
The learning curve associated with IoT tech may also be a challenge. You and your staff may need to learn how to manage fleets of IoT devices, secure the networks they connect to, and learn to work with the necessary platforms to coordinate these IoT fleets.
Demand For Managed Services For IoT May Grow Quickly
As the demand for IoT managed services increases, MSPs will do well to take the opportunity for what it is. The IoT comes with its challenges, but it also offers plenty of benefits that can prove lucrative if the technology is effectively employed.
About The Author
Megan R. Nichols is an industrial writer for sites like Thomas and IoT Evolution World. Megan also publishes easy to understand manufacturing articles on her blog, Schooled By Science. Keep up with Megan by subscribing to her blog.