Mike Puglia of Kaseya discusses why differentiation is critically important in what has become a highly competitive market for MSPs – and explains how they can stand out.

Managed services is already a huge and competitive market – and it is expected to grow further over the next five years. Research suggests the global market will expand from $152 billion in 2017 to $257.84 billion by 2022, at a compound annual growth rate (CAGR) of 11.1%.

Fuelled by the huge advances in technology of recent years, including the cloud, big data, mobile and the subsequent need for increased security and data protection, managed services providers (MSPs) have been described as “the driving force for IT industry growth”. The changing role of IT within business – from being merely a business facilitator to becoming central to business strategy – has brought a change of focus for MSPs too. No longer are they mainly product-centric but now act as trusted advisors and consultants that focus on providing a total solution rather than a standalone product.

However, a market with such huge potential is something of a double-edged sword. More and more companies swarm round the promise of sustainable profits like bees around a honeypot. As a result, every business is looking for ways to differentiate itself and to stand out in a crowded sector. Also, research by Kaseya, a leading provider of complete IT management solutions, has shown that within the MSP market, growth is not uniform, with some businesses raising their revenues by considerably greater percentages than their rivals.

Differentiation for MSPs
So what are the successful MSPs doing that the others are not? The same research shows that the high flyers have often moved away from offering just the bread and butter such as back-up and disaster recovery, for example. High growth MSPs frequently offer a choice of different backs ups such as cloud-to-cloud, onsite-to-onsite, cloud-to onsite and onsite-to-cloud.

However, it’s not just in this area that they have diversified. They appear to offer more options around security too. When MSPs were asked about the most important challenge for their clients last year, the majority said ‘meeting security risks’.

The same is true when it comes to network and infrastructure monitoring. It appears that high-growth MSPs are scoring plenty of hits with network operating centres (NOCs), another emerging service category. It’s interesting that 47% of high-growth MSPs report that they offer NOC services around the clock, compared with just 27% with lower growth.

In a nutshell, it seems that higher growth MSPs get it right because they give the market what it wants. However, devising a strategy around this can mean spending an immense amount of time gathering business intelligence to provide direction.

Staying ahead
There’s little doubt the MSP sector is active, thriving and in some cases, highly profitable. This in turn is attracting innovation around the MSP role, with the emergence of tools to help these businesses become even more supportive to their customers.

The latest of these, a true industry first, is Kaseya’s MSP Insights, a business intelligence and benchmarking tool that can cut through all the manual information gathering. Built on proprietary technical and business data, the online portal allows MSPs to quickly and easily benchmark their business metrics against other MSPs in their region, analyse new and emerging MSP service offerings, evaluate bundling and pricing strategies and review detailed technical trends.

Competitive analysis, though extremely important, can be costly and time-intensive. Using this portal, MSPs can now benchmark their business services and strategies against the wider MSP community. Users can easily access the critical information they need and focus on what is most important – running and expanding their own business.

It’s clear that the difference between a fast-growing MSP business and the not so successful is that the former continually has its ear to the ground, looking for ways to hone, improve and expand its services. The challenge here is that it can take considerable time and effort to gather this information, especially when it comes to a competitor’s data. Using MSP Insights this data can be used, discussed and analysed in an instant.

Guest post by:
Mike Puglia, Kaseya on how MSPs can differentiate

Mike Puglia

Chief product officer, Kaseya
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