Make Money, cash

The Big Moneymaker Many MSPs Give Away for Free

SMBs are eager to pay for the knowledge that most partners have yet to package into a solution.

When Progress Software strategic partner program manager Richard Stone thinks about the channel opportunity in 2018, there’s an old cartoon that comes to mind: The one where the dog that’s chasing the car finally catches it, and as the car speeds down the road with the dog’s jaws locked on its bumper, the poor pooch thinks to himself, “Now what?”

This, says Stone, is what SMBs are thinking as they look at the vast oceans of data they’ve gotten so good at collecting. These customers have been chasing the Big Data car for years. Now that they’ve finally caught it, they don’t really know what to do with it.

Luckily for them, there’s a channel for that.

“Everyone is struggling with what I like to call ‘bigger data,’” says Stone. “There’s a huge opportunity for partners to specialize in these data applications and take the complexity away from customers.”

The biggest upside to being the one SMBs call to outsource that complexity? The core competencies needed to wrangle all of that data are ones that MSPs already have, and just have yet to package into a solution. The partners that have figured out how to monetize that expertise have grasped the essential key to success in today’s channel, according to Stone: Stop focusing just on technology, and educate yourself about your customer’s business. Anything else is just a race to the bottom.

Richard Stone

“The world is changed forever,” he says. “The days of being able to offer relatively simple, straightforward services are over. They’re all now commoditized by the Big Three. MSPs need to think about the problems customers face and turn it into a value proposition. They need to think beyond the service.”

The big opportunity in cloud Stone says many partners are just starting to understand is that it has a magic ability to enable SMBs to produce highly disruptive business models that generate the kind of true competitive differentiation that business owners drool over. SMBs know what’s possible. They see it happening in the market and on the covers of business magazines. But they’re trying to discover new worlds without knowing how to navigate the ocean between where they are and where they want to be. They need the channel to guide that ship, but partners that only focus on technology are probably going to set sail in the wrong direction.

The good news is that gaining the knowledge these businesses need shouldn’t be a stretch for partners. Most customers Stone sees fall into four broad industry segments: manufacturing; finance and insurance; transportation and logistics; and health care. And most businesses today are struggling with three main areas of complexity: security, multi-cloud management and building out application-level capabilities. The revenue opportunities lie in where those customer segments intersect.

SMBs don’t need tech solutions. They need business solutions that happen to use technology to make running a digital business with a global reach a little simpler. Stone says there are real opportunities where MSPs can make big money now. All it takes is a little research, a lot of conversation and a leap of faith.

“Most MSPs have these competencies; they’ve just never packaged it up as a solution. When they do, they become strategically relevant to their customers.”

Security

There’s a big change happening in global business, where legislation is moving beyond just data security to encompass data privacy, which is a whole different ball game. The EU’s General Data Protection Regulation (GDPR) changes the data-usage rules for just about everyone in a global economy, because it doesn’t matter where the company is based. It only matters where the customers are. If a business touches customers in Europe, they have to comply with GDPR. And even if GDPR doesn’t apply to them today, it’s only a matter of time before they’ll have to comply with a similar regulation, since most of the world is grappling with how to protect citizens’ digital privacy.

“From a managed-service point of view, it goes way beyond data encryption and authentication. It means their customers have to understand new rules,” says Stone. “This is even more important in the SMB sector, where the same legislative compliance requirements exist, but these companies don’t have the skills or expertise.”

But partners do, and SMBs know that no matter how much MSPs might charge, it’s nothing compared to the fines for non-compliance.

Multi-Cloud, Multi-Site Management

Here again, partners have a global economy to thank for a big revenue driver. Increasingly, companies are deploying different workloads to different clouds – often across multiple geographies – for legislative, performance or cost reasons. EU customers concerned about GDPR have to host their applications within Europe, for instance. Businesses with customers in Tokyo risk performance issues if their applications are hosted purely on Amazon East. It’s complex and costly for individual companies to manage these workloads, whereas many MSPs already have the skills and tools in-house to do it profitably.

“Not long ago [cloud management] was a relatively simple operation — one cloud, one customer. Now they’ve got to manage all their assets among all these different clouds,” says Stone. “That’s really, really hard to do. But it’s the kind of skills that exist inside an MSP, so they can offer that as a service.”

Building New Application-Level Capabilities

The cloud is enabling the introduction of solutions that were simply not possible a few years ago. While applications are becoming increasingly affordable for smaller companies, they are still very complex to manage. MSPs can bridge that gap by offering specialized competencies in these new applications to assist their customers on both the technical and business side of the house — making them more strategically relevant.    

The global cloud business economy is mind-numbingly complicated, and while the cost-to-entry for many SMBs is now achievable in unprecedented ways, the knowledge gap is nearly insurmountable. MSPs don’t need to sell business owners on their services. They just need to convince them they’re the shop to provide those services. The two things partners need to make that sale are technical knowledge and an understanding of their customers’ business landscapes.

So they’re already halfway there.

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