Has Managed Services Jumped the Shark?
When Best Buy sold off mindSHIFT (its managed services provider (MSP) business division) to Ricoh last week, MSPmentor was not surprised. But that move — combined with MSP software industry M&A throughout 2013 — begs the question: Has the MSP industry seen its best days, ultimately jumping the shark and landing in dangerous cloud and mobile waters?
I tend to be an eternal optimist. I see glass-half-full opportunities for MSPs across the world. But the easy money — server and desktop monitoring coupled with help desk services — is now off the table. IBM is exiting the low-end x86 server market, the latest sign that small and midsize businesses are shifting assets to cloud computing.
Still skeptical? JumpCloud, a startup, just got $3 million in funding to help develop and expand its IT management platform — designed for cloud servers and on-premises servers (if you still want those…).
Traditional MSPs — like traditional resellers before them — will increasingly get pinched as cloud and mobile services trump PC and server management capabilities. Best Buy tried to expand mindSHIFT from an MSP into a CSP, but ultimately I think the company couldn't figure out how to compete with Amazon Web Services, Windows Azure and other cloud services.
As I've stated before: MSPs should not try to compete with big IaaS providers. Instead, you should ride those IaaS railways, much in the way that big transportation companies like CSX and Union Pacific ride the U.S. railways.
But back to the headline of this blog: Has the Managed Services Provider (MSP) market jumped the shark?
- Absolutely yes if you think PC and server maintenance is a good opportunity.
- Absolutely not if you managing, monitoring and monetizing customer workloads on public clouds.
That's all I have to say about that. For now.