IT Management Drives MSP Revenue Growth

CIOs want to leverage IT management services offered by providers, many have concerns about gaps in MSP skill sets. Here's what MSPs must do to close those gaps, real or perceived.

May 6, 2013

4 Min Read
IT Management Drives MSP Revenue Growth

The next two years offer unprecedented business growth opportunities for MSPs in the surrounding areas of IT Management (ITM). The results of a comprehensive International Data Group (IDG) ITM study indicate that Enterprise IT will have larger budgets for ITM through 2014. These budgets will be used to outsource more IT Management services to MSPs.

The Enterprise customer’s view of ITM is rapidly evolving. Over half of the Enterprise CIOs interviewed claimed to “see IT Management as an architectural choice” as opposed to simply an “element of the infrastructure”.

The good news for MSPs is that we are seeing customer shifts that are all focused around ITM.  The proof is in the percentage of IT budgets spent on ITM.  Approximately one third of all IT budgets will be spent on some form of ITM.  So a critical question to ask is “are you presenting ITM as a cohesive architectural choice?”  That is specifically how Enterprise CIOs prefer to see it presented by MSPs.

MSPs Need To Offer “Strategy Formulation”

The Enterprise customer’s approach to ITM is becoming more strategic.

One of the specific areas where CIOs are looking for help from MSPs is in consulting services and strategy formulation. Over half of Enterprise IT CIOs will expect MSPs to help them develop their ITM strategy.  This is in addition to the more traditional need for expert installation and integration services. 

More good news for MSPs is that Enterprise customers need help across the entire spectrum of services.  Overall, Enterprise CIOs expect that all phases of service handled by MSPs will increase, especially in the areas of architecture design, integration and post integration service.

CIOs Need More Confidence in MSPs

CIOs want to leverage services offered by providers, but require more confidence in MSPs. Despite the fact that over 80 percent of enterprise CIOs expect to use MSPs in the next two years, there is a lack of confidence in Service Provider abilities.

A majority of Enterprise CIOs believe that gaps exist within the skill set of MSPs.  The gaps are represented in these specific areas:

  1. Value pricing – CIOs are looking to MSPs to offer results-based incentives programs.

  2. System integration expertise on staff – CIOs seek expertise from MSPs on key applications.

  3. Hybrid Cloud integration expertise – Enterprise customers expect hybrid cloud customer stories

  4. Strong Bench – CIOs and IT Directors are looking for expertise on staff to fulfill ad-hoc requests.

  5. Demonstrates a Proven Methodology – Most critically, CIOs are looking for MSPs to demonstrate that their methods have been successful not only in a lab environment, but with real Enterprise customer use cases.

You Can Monetize What You Can Measure

The Enterprise customer’s approach to ITM creates opportunities for MSPs in the two areas of “customization” and “service”.

  1. Customization: There is no single “dashboard” for every Enterprise customer. Every customer will represent a unique and complex infrastructure. It is that customization of service from the strategy formulation to the installation to the post sales management that will drive new revenues for the Service provider.  Another way to put it is “you can monetize what you can measure”.

  2. Service:  Over the next two years, CIOs will be looking for MSPs to provide services surrounding integration and implementation as well as offering a host of post-sales support and management offerings. These services represent new territory for most MSPs.

Take Advantage of the Migration to Hybrid Cloud

MSPs have a unique and unprecedented opportunity to take advantage of the migration to hybrid cloud.

  1. Analysts predict 2013 to be the “tipping point” for hybrid cloud. Enterprise IT is rapidly migrating infrastructure off premise in an effort to shift budgets from general maintenance to “innovation programs”. This trend is pervasive across all Enterprise verticals and sizes.

  2. Enterprise CIOs plan to cut expenses on hardware, software, interconnect and services as they move more of their infrastructure off-premise and outsource more services. This will create bigger budgets for ITM in the next two years.

  3. CIOs will hire a broader array of MSPs

  4. CIOs will be challenged to select the best MSPs as there will be gaps between Enterprise ITM needs and current Service provider abilities.

    1. Industry Expertise

    2. System Integration Abilities

To learn more about how to build your business with IT Management contact your CA Technologies Partner Representative today.

Bart Peluso III is Partner Product Marketing Director at CA Technoloiges. He has 18 years of technical product marketing experience for networking, hardware and software products including PowerEdge servers and EqualLogic storage. He joined the CA Technologies team to lead the Product Marketing for CA AppLogic Cloud Platform and now supports CA Partner Product Marketing. Bart attended the University of Central Florida and holds a BA in Advertising and a Masters in Business Management.

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