The Future of MSPs in a Cloud-Centric World, Part 2

Here's how MSPs in five simple steps can change the economics of their business models to adjust for "channel eclipse."

November 19, 2014

2 Min Read
MSPs should prepare for channel eclipse by reinventing themselves
MSPs should prepare for channel eclipse by reinventing themselves.

By Jim Lippie 1

As MSPs transition to selling more cloud solutions, they will lose their dependency on highly-priced, highly-certified network and infrastructure engineers. To stay on top of this shift, MSPs will need to adjust their business models accordingly.

MSPs will need to outsource back office functions to create efficiency and increase profits. They will need to maximize their value to their clients in a world commoditized products and declining margins. MSPs need to reinvent themselves, but not as drastically as predicted by the big companies at the conference referenced in my article from yesterday.

Here’s how MSPs can change the economics of their business models in five simple steps.

Step 1: Select a desktop as a service (DaaS) platform you can private label. DaaS is a misnomer, because it implies you’re just providing a “desktop,” but in fact the right platform allows the MSP to provide clients with all their servers, access to data and access to third party apps.

Step 2: Focus your client acquisition efforts on companies that require third party applications to run their business (Office 365 doesn’t count). There are thousands of business line applications small businesses use every day to run their business. Focus on those.   

Step 3: Host those third-party apps for the client with your private labeled DaaS platform. When you control access to the applications, you control the client relationship.

Step 4: Bundle your managed services with the DaaS solution to create a package that includes hosted servers, access to applications, backup, disaster recovery, hosted exchange and unlimited end-user support for a fixed monthly fee per user per month.

Step 5: Mine data from the DaaS platform and present your clients with business analytics that are meaningful to them.

Upon implementation of these five steps, MSPs can deliver a comprehensive portfolio that provides SMB clients with the IT functionality they want and need, and allow the MSP to deliver more value to their clients in the form of meaningful business analytics.

As MSPs make traction with this model they will be able to reduce their support costs, while increasing recurring revenue and will become “stickier” in the process. The MSP of future isn’t an MSP at all, it’s a TSP: a total service provider, a provider that not only delivers IT functionality, but also provides valuable information to enable better business decisions. Is your business ready to transition from MSP to TSP?

To learn how to transition from an MSP to TSP and get a list of the primary job roles for the TSP of the future, email [email protected].

How have you prepared for channel eclipse? Do you believe this phenomenon is forcing MSPs to adjust the economics of their businesses?

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