4 Ways To Move Outside Your Comfort Zone And Win Big With Managed Services

The comfort zone for many channel partners revolves around their technology expertise. How many certs, how many vendors, how many techs? But where the big money is being made is in the application of this knowledge and the solutions it can create to solve business problems and deliver desired outcomes for businesses of all sizes.

To survive and thrive in the new era of managed services, managed services providers (MSPs) need to devise well-thought-out and focused business plans that tie into the customer’s goals, objectives, and pain points. They also need to become very self-aware and address these four industry-shaping trends: new competitors, rampant commoditization, cloud-based and application management services, and the mobile device explosion. All are interrelated, but each has its own impact on SMBs and the MSPs who support them.

Here’s a closer look at each, along with some advice from our MSP Elite.

1. Consider The Strengths And Weaknesses Of New Competitors

The high margins of managed services are attracting serious competitors from non-traditional areas. Big companies with existing IT expertise and customer relationships — in the copier, A/V and telephony domains — want to tap into new, recurring revenues. This convergence trend means existing MSPs must be able to compete.

These new competitors typically concentrate on providing low-cost, cloud-based services. However, they are not very good at integrating those services with on-premises technologies — a shortcoming that creates tremendous sales opportunities for MSPs to offer margin-rich hybrid solutions. Indeed, SMBs are operating in the cloud and on-premises, as well as everywhere in between, so addressing their needs across the full spectrum of IT environments simply makes good business sense for MSPs.

In addition, the customer relationships that MSPs already hold in the market give them a powerful edge. Building on the strength of these relationships is paramount to continued customer retention in the face of the new competitors moving into the managed services domain. 

2. Recognize That Rampant Commoditization Exists

The new wave of competitors competes on price, not value. They aggressively commoditize their services, forcing traditional MSPs to justify higher fees. A disturbing reality is that the price of traditional monitoring has fallen dramatically due to cloud services providers’ short-sighted focus on price above all else.

To compete on value, MSPs must do two things. First, they must expand their monitoring services to span the cloud, on-premises and hybrid versions of cloud/on-premises. Second, they must improve their operational efficiencies. When MSPs can deliver their services more efficiently and in higher volumes, they can better justify their fees — and still enjoy strong margins. Drag-and-drop MSP automation, a practice that is taking off as part of remote monitoring and management and other technologies, is unlocking the key to greater operational efficiency today, giving MSPs a greater competitive edge and a more streamlined approach to business.

3. Deliver And Price For A Complete Portfolio

As we are all too well aware, the cloud is omnipresent, delivering 24/7 services for just about everything for both consumers and businesses.

Ideally, an MSP practice should offer not just cloud-based managed services but also hybrid and on-premises offerings as well as application-level management. There is a shift with cloud that is pushing SMBs to move more and more critical and proprietary applications into a more scalable and elastic solution, like the cloud. By delivering a complete portfolio of services, MSPs will be able to satisfy any client need — while keeping their practices on the cutting-edge of technology and service. Obviously, pricing should reflect this new world of diverse services, with MSPs taking care to offer clients price quotes for cloud, hybrid, applications and on-premises services.

4. Embrace The Mobile Device Explosion

The ubiquity of mobile devices and the ongoing bring your own device (BYOD) movement open up excellent opportunities for MSPs. BYOD allows workers to move their work from PC to laptop to smartphone to tablet almost without thinking —a practice that adds new layers of IT complexity and puts added pressure on SMBs to seek managed services from trusted sources.

For MSPs, this multidevice reality brings with it new challenges and more applications, along with new revenue streams. To stay competitive and current, managed service contracts need to be more flexible and include service across all mobile devices — while delivering 24/7 help-desk support to ensure customers’ end users have the professional assistance they need, when they need it.

Clearly, the rapidly changing world of managed services is forcing MSPs to step outside their comfort zone, confront the trends that are revolutionizing the market, and devise targeted ways to sell and market their services to clients and prospects.

To succeed, MSPs must be able to offer value-based services that meet the diverse needs of the market — while at the same time driving the operational efficiencies that will allow them to protect their margins.