Historically, the role of the MSP was clear, built on stability and clarity.
Yet as the industry enters 2017, and end-user appetite increases, the market is moving towards a new future.
Driven by new technologies and increased competition, market forces are combining to push MSPs towards the next phase of growth.
But that’s just the tip of the iceberg, with the onus now on the channel to alter relationship models and strive to address customer needs.
Consequently, questions are now being asked about how an MSP structures its business - such as cost, staff and technology - to meet new end-user demands with the fluidity and agility required to succeed.
“Whether you’re a value-added reseller (VAR), systems integrator (SI) or MSP, customers don’t care about that,” CCNA director, Craig Sims, said. “They care about relevance what can you offer them.”
During the past three years, MSPs have moved away from traditional practices, as partners re-evaluate end-user relationships.
“As MSPs start to understand finances, they realise that holding on to certain customers is an expensive exercise, which costs more money,” Webroot Asia Pacific strategic alliance manager, Demetrios Georgiou, added.
“This has resulted in MSPs letting go of vendor portfolios and downsizing key offerings.”
Echoing Georgiou’s observations, Artis Group managing director, Chris Greatrex, acknowledged the difficultly MSPs faced when attempting to keep pace with changes in vendor solution offerings.
“As an MSP, customers expect you to go up to them with answers to their questions,” he explained.
“But at the same time, the customer questions some things and will be disappointed if you don’t have the answer they’re looking for. There’s a delicate balance that needs to be addressed.”
CAPEX vs. OPEX
In light of a growing desire for “as-a-Service” business models, MSPs must now be flexible when providing products and financing options, as the CAPEX vs. OPEX debate runs into the new year.
“Some customers want an upfront payment model, some want monthly or a mixture, but more are moving towards a monthly model,” Cavalry director, Barry Silic, said.
“Some partners will have to turn to the vendors to help us out with it.”
For Tecala managing director, Pieter DeGunst, the channel acknowledges that vendors are open to helping MSPs make the transition, yet also remained constrained by ongoing industry challenges.
“The MSP subscription model is currently quite immature in vendor land,” he said. “Hardware vendors must get on board with the model that software vendors have adopted.”
While having access to both styles of purchase remains a valuable asset for MSPs, for some partners, the deal represents much more than a simply a financing option.
“It’s more about that fluid asset,” NTT Communications solution design enterprise services director, Joseph Vijay, explained. “The recognition that you can transfer the asset from one entity to the other and keep it going beyond that traditional lifecycle.
“If we can achieve that, then we’re making progress.”
To succeed as a new-age MSP, an evolving partner must uncover new value in niche plays, avoiding the mainstream in favour of a more tailored market approach.
“You cannot be a master at everything,” Net Affinity Managed Solutions service delivery manager, Kabie Senga, said.
“You need to identify your forte. Strengthen your play and skill sets in one particular area and keep your focus on just that.”
ASI Solutions head of professional services, Daniel Johns, suggested partners also approach channel collaboration in a new light.
“You need to understand what your core strengths are, for you to offer solutions to customers,” he said.
“You then need to pick out partners that have specific skill sets that can then deliver on your behalf and you then end up with better solutions.”
Enablis chief technology officer, Nick Sampson, said that as the demand for agility heightens, the focus now shifts to identifying the end customer, analysing size and licensing needs, alongside future requirements.
“When deal registration and named account managers get involved it makes things very difficult,” he said.
“Customers are seeing more complexity and it ends up being us as MSPs that take on that complexity. So strategic partnerships help alleviate that.”
As a traditional MSP, Allcom Networks service delivery manager, Savraj Narula, believes the market has moved towards service outcomes, and the agility built around that.
“We want to be able to effectively control and manage infrastructure that impact businesses,” Narula said.
“We work with a lot of the carriers that don’t have the agility to support customers in a fast pace as compared to traditional SIs.”
In terms of choosing brand or best of breed when it comes to aligning with a vendor, Linktech Australia managing director, Ahmed Latif, believes such a conversation should be based on best fit.
“We signed up with a non-traditional international storage vendor that was new to the market and we realised that we were doing ourselves and our customers a disservice,” Latif said.
“We pulled it back. We then found another vendor that fit that space and it now works smoothly for us.”
But as the industry changes, sole responsibility should not be placed entirely with the MSP.
Rather, vendors also have a key part to play in this evolving ecosystem, changing as customer wants and need alter alongside.
Kaseya Asia Pacific technical director, Craig Allen, believes vendors must change the way they sell technology to provide MSPs with a business benefit, use case and an outline of what that service will potentially look like, before back filling that with technology.
“If your customer has a particular business problem, talk to us about it and we’ll provide the solution and educate how you can go off and deliver that,” he said.
“You will put your own spin on it, but we need to give you that capability to maintain that expectation.”
Endorsing Allen’s approach, AC3 software solutions manager, Kirk Jones, believes MSPs should take an “active approach” to providing feedback to vendor partners, emphasising the need for greater channel communication.
“It’s about customer business requirements,” he said.
“We need to consult with the customer, find out exactly what they need then go back and negotiate with the vendors to pool together programs to meet those needs. But some vendors are struggling to bring in those managed services programs.”
According to Adatos Australia regional sales director, Paul Dovas, MSPs represent the “voice of the customer”.
“The product sells itself if it’s the right question that you’re trying to answer or the right problem you’re trying to solve,” he said.
Looking ahead, NTT Communications HP practice director, Joy McKay, believes there needs to be more collaboration across the channel.
“Large vendors need to be more collaborative and work with MSPs to work towards flexibility and understand the needs of MSPs better,” she said.
“This will also improve communication lines and business between the businesses.”
A new need for skills
As an MSP in a specialised market, the biggest role of the partner now centres around providing the most relevant skills to customers.
“It’s not just technical skills, product skills, and delivery skills, it’s also about sales skills,” APC by Schneider Electric Pacific channels and alliances general manager, Muralee Kanagaratnam, said.
“The sales ecosystem we’re working in is going through absolute disruption - conversations on the vendor sales side were around a product or technology or service but now it includes other aspects. That talent pool comes from the MSP.”
This article originally appeared in the December issue of ARN magazine - to subscribe, please click here