The Future of MSPs: A New Paradigm

March 10, 2021 The Future of MSPs: A New Paradigm

By Captain's Chair

In the face of commoditization, pandemic disruption, talent wars, and other market forces, what does a successful future look like for Managed Service Providers (MSPs)?

The key will be navigating constant change, based on evolving client needs. This will involve becoming comfortable with the discomfort of change — as well as a fundamental paradigm change.

Traditionally, MSPs have based their value proposition on supplying customer support in these areas:

  • Break/fix
  • Reactive, on-site support
  • Hardware maintenance
  • Maintaining on-premises servers

Based on current trends, the path forward for successful MSPs will require pivoting to focus on:

  • Service offerings rather than maintenance of hardware
  • A consultative approach based on clients’ business objects
  • Cloud technology
  • Niche industry approaches rather than a one-size-fits-all approach

Commodity or Partner?

The most urgent threat to MSPs today may be the growing tendency of clients to view them as a commodity. In an age in which there are multiple ways to achieve baseline IT goals, what is to prevent clients from just going straight to Google for their needs?

To mitigate this and pave the way to greater success, MSPs will need to align themselves more with their clients, seeing them as business partners. This may require a paradigm change for both sides.

Specialization by MSPs — including the work needed to achieve a deeper understanding of the client’s industry and business goals — will be key. For instance, an MSP working with a dental client may need to develop value-add services like HIPAA compliance reporting. In that scenario, the MSP will have to enlarge its vocabulary to think more like the client.

The imperative is on the MSP to show clients it understands their paradigm and can help achieve success, by speaking their language rather than technical jargon. It requires a migration from being an on-site break/fix specialist to a more consultative approach.

As Vital as Ever
Despite a perception as a commodity, good MSPs are as vital as ever — that remains a constant. What has changed is the way MSPs must approach clients. Clients need to be engaged differently, which is why we developed the Captain’s Chair dashboard. The clean interface and ease of information access help validate the MSPs value proposition by visually displaying regular progress towards the client’s stated goals.

The first key is to know those goals. This requires frequent communication between MSPs and their clients, which may be counterintuitive to the former, accustomed as they may be to only being called when something breaks. It involves engaging in strategic discussions with clients — and then communicating progress towards those goals, using a product like the Captain’s Chair dashboard.

Needs Rather Than Wants

The most successful MSPs are finding ways to give customers what they need, not just what clients think they want. That ability to think presciently will bear fruit, much like it did for Apple when it invented the iPod in response to the Sony Discman.

When introduced in 1985, the Discman presented a way to play CDs on the go. It was envisioned by Sony as the way forward for customers enamored with the Sony Walkman, a portable cassette tape player.

The future of music listening clearly wasn’t embodied in a portable CD player, however — which became apparent when Apple invented the iPod. Providing a way to easily play digital music, the iPod led to the future of music listening, helping to migrate the paradigm of music listening from the hardware of CDs to ubiquitous digital access via the iPhone and streaming.

For MSPs to deliver what clients need, rather than what they seem to want, new business plans (and even some soul-searching) will be required. Clients need an MSP that can give them peace of mind. Discovering an MSP’s north star — which is how it can truly add value to achieve that goal — will help point the way to greater success.