The Talent Factor

In the midst of the gathering storm, providers must examine what it will take to continue to thrive. Two important aspects to consider are keeping/retaining good talent, and the health of their operations.

The outlook appears to be very good for MSPs (well-run MSPs, being the distinction here) that have both talent and operational sophistication. This industry is first and foremost a people business. The issue that many MSPs will face is the race for quality talent in the marketplace. The end-user community, as well as the larger MSPs, have deeper pockets than many of the smaller MSPs. The simple fact is that these pocketbooks will make things more difficult for smaller MSPs, especially shops that are unable to keep their quality talent.  

“When the economic outlook lessens, with the threat of recession looming, there will be more end-user firms looking to outsource,” Neil Medwed, executive director of strategic partnerships at MSP Meriplex, told Channel Futures. “They will be seeking MSPs with not only top-notch talent, but also sophisticated operations. That means that as opportunities increase, so does the need for the talent to keep up with the ‘wins.’ Many smaller MSPs compete mainly on price, whereas the larger ones can normally show greater value-add and compete on price whenever the opportunity is right.”  

From an operational perspective, the same fight for talent is there, as well as the demand for their services. For example, every MSP says that they have great cyber talent and capabilities. The issue is that many MSPs cannot afford to employ the talent necessary to back this up (as it were). Sure, they can outsource certain things, but the fact remains that they must be sophisticated internally as well as externally. 

“As the economy gets worse, the need for quality MSP outsourcing will grow,” added Medwed. “So, as an industry, the outlook is good. The issue I foresee is that clients will demand quality at any per-seat price. Many MSPs are running at little or no profit, and their outlook going forward is going to be more and more difficult as our economy worsens.”