How One Partner Tinkered with Its Business Model and Conquered CommoditizationHow One Partner Tinkered with Its Business Model and Conquered Commoditization
As managed IT services act more like ubiquitous products, partners seek ways to increase value.
March 27, 2019
If there’s one word that universally makes managed service providers (MSPs) and other partner types concerned, it’s commoditization. Everyone recognizes that the commoditization of IT services is among the biggest threats to the traditional MSP business model, and there are a number of ways partners are trying to adjust and evolve along with market demand. They’re moving up the stack, for instance, or developing niche expertise in specific verticals and lines of business — or, as in the case of one MSP that recently reinvented itself, developing its own IP and turning from traditional channel partner to provider.
Last month, managed service provider Shield Watch executed a pivot that had been in the works since 2016 by launching Captain’s Chair IT, a proprietary business intelligence platform to allow its customers to access information about their network and IT assets that was previously only available to MSP service teams. The company rebranded as Concertium simultaneous with the product launch.
Concertium’s Pratik Roychoudhury
“The Captain’s Chair software was born out of Concertium’s desire to provide full transparency and data insights to its client companies to drive digital transformation,” said Pratik Roychoudhury, CEO and President of Concertium. “Outsourcing of MSP services often carries the stigma of ‘giving up control’ to an outside vendor without having visibility of one’s own IT assets. Concertium wanted to provide its clients with full visibility of their infrastructure’s performance.”
Roychoudhury says with the rise of the cloud and SaaS software, businesses today have to use too many separate systems to run operations, and there are too few options that integrate all digital assets, hardware, cloud and line-of-business applications into a single platform. The midmarket is beginning to really see technology as a business asset, but the proliferation of tools makes it difficult to create differentiation in a field of competitors all using the same tools and having company data dispersed among a multitude of SaaS systems can make many business owners and managers uneasy.
So when Concertium began to truly understand it needed to pivot to combat the commoditization of the perceived value of MSPs, it had a unique visibility into its clients’ biggest areas of worry. The company saw an opportunity to transition from being a pure infrastructure management vendor to becoming a business partner with a platform that spoke directly to those areas of concern. The pivot carries both benefits and risks.
“Being a business partner to our customers means that we can create a much deeper connection that allows us to understand our customers business opportunities, pain points and present technology solutions, explains Roychoudhury. “It also helps us enable growth in our customer base, which is mutually beneficial. The disadvantage is that it raises customer expectations and required [us] to develop additional capabilities.”
Concertium’s evolution to a digital-transformation company has changed its target customer profile, in terms of customer mindset. Instead of businesses that view technology as a necessary evil that is the sole domain of the IT department, it now goes after clients where the executive suite is engaged in the technology discussion and is looking at technology as a competitive asset. The change from partner to provider has similarly changed the company’s conversation with customers.
When you think about it, Captain’s Chair IT is, in fact, the commoditization of managed IT services. The tool makes consuming and understanding business intelligence easier. It brings data from all of a company’s software platforms into a single pane of glass that’s always available as both a web and mobile app, then makes that data useful to users. It gives users visibility into and power over IT operations and brings value in the form of insight.
If that isn’t a description of a good MSP, we’re not sure what is.
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