There's pain and opportunity for MSPs in the complexity costs of new technology.

March 30, 2020

5 Min Read

By Jim Lampert


Jim Lampert

Managed service providers have been around for more than 20 years but my, how things have changed since they grew out of the original application service provider model. Until recently, MSPs have focused primarily on remote monitoring, security, network management and other routine IT tasks that CIOs would rather outsource for cheaper than they can run internally.

But as cloud adoption grew, MSPs began to expand offerings to include public and private cloud design, migration and management services. This has contributed to a new purpose for MSPs, especially as software-defined infrastructure and automation have replaced some of their traditional skill sets. The trouble is, CIOs are wrestling with the complexity costs of new technology: unmanaged cloud sprawl, integration challenges between SaaS and cloud providers, security risks from shadow IT and so on.

But where there’s pain, there’s opportunity. MSPs looking to grow and survive amid IT marketplace disruption can today play a bigger role than ever before in enterprise IT. In 451 Research’s “Voice of the Enterprise: Cloud Hosting & Managed Services” survey, organizations highlight cloud platform expertise, advanced platform functions and cloud-native application development as areas where the necessary skills are lacking in-house. “As a result, enterprises are looking to service providers to fill some of these gaps — over the next two years, nearly half of businesses currently using cloud plan to work with a service provider to acquire cloud platform expertise,” according to the research firm.

IT leaders are under pressure to be real business partners, working directly with the C-suite on the future of the business. In turn, MSPs now have a fantastic opportunity to deliver a new suite of services:

  1. MSPs as strategic cloud advisers. .Cloud investments are expected to double as a percentage of IT budget over the next three years, according to Deloitte Insights Tech Trends 2020. How organizations invest is important, as there’s so much choice today in terms of vendors, solutions and architecture. CIOs and CXOs need expert, outside advice on how to design and implement the optimal IT environment from a cost, performance and business innovation perspective. They need advice on whether to choose a hybrid, multicloud or pure cloud architecture and how to manage it all. Certainly, MSPs can serve as filters in the market, recommending the optimal public or private cloud provider to the client, based on expertise, usability, price and other characteristics. They can help answer questions like: which assets should remain on-premise and which cloud provider can adapt most easily to future needs? MSPs should reconfigure operations and services (including their own staff composition) to meet these growing needs.

  2. MSPs as technology simplifiers. Tools and app sprawl are choking the ability of DevOps and ITOps teams to be efficient and gain needed visibility into status, cost and health of the infrastructure and production environment at all points in time. A recent study found that large companies receive nearly 3,000 alerts daily in IT, and most of them are either redundant or irrelevant. This adds cost and confusion for IT organizations, and hinders the ability to quickly see issues of real business importance. Another survey, conducted by my employer, OpsRamp, found that the proliferation of legacy IT operations management (ITOM) tools is among the top three barriers for IT modernization. MSPs can help IT leaders analyze the tools environment and rationalize existing investments as well as identify requisite replacement technologies. Top goals should be reducing data noise, bringing data sets together for central visibility and applying analytics in the right areas to continually improve IT performance.

In addition, MSPs are in an optimal position to recommend new technologies, helping enterprise IT leaders rapidly …

… filter the continual onslaught of new solutions for those that truly deliver ROI. Large MSPs are regularly experimenting with and vetting products for a broad customer base, which brings efficiencies and faster time to value for customers.

  1. MSPs as automation experts. The strategic application of automation can help IT teams work smarter and faster. But determining which solutions to use and for which use cases requires ample investigation and domain knowledge. MSPs that can develop this credibility and help CIOs select and optimize AI, machine learning tools and robotic process automation technologies will bring a lot of value. As well, MSPs that can bring data science and machine learning and cloud development skills to the table will be hugely valuable, since IT organizations need help configuring automation platforms for specific use cases and analyzing the outputs to improve future policies and decisions. MSPs are well-equipped to deliver these new skills at scale for their clients.

  2. MSPs as innovation enablers. The end goal for MSPs in leading some of the activities outlined above is to free up time and resources so that IT organizations can focus on business alignment. If MSPs deliver expertise in strategic areas such as cloud orchestration, intelligent automation and platform modernization, they give CIOs the foundation for building new customer-facing services that can win market share. Progressive MSPs establish relationships across the business, working closely with the CIO on building bridges internally as well as externally, given their network of CIO customers. There’s a high value on real-world experience that can be quickly shared between companies knee-deep in transformation projects.

Technology complexity, sometimes called technical debt, is becoming problematic for many enterprises. It’s hard to gain benefits from investing in cloud, AI or IoT when legacy systems, processes and traditional skill sets are predominant. MSPs have long histories of helping IT departments implement new technologies and navigate change. Right now is the perfect time for MSPs to move out of the business of transactional IT – which automation is starting to replace anyway – and into the higher-value work of digital innovation.

Jim Lampert is VP of service provider sales at OpsRamp. He has 30-plus years of experience in the managed services industry, having worked at GreenPages, Cloud Technology Partners and Dell EMC. Follow him on LinkedIn or @OpsRamp on Twitter.

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