What does a “next generation” MSP look like? How does it act?

By | May 14, 2013
Topic: MSP

The next-generation MSP is business-focused, not IT focused. This means: in order to counter MSP commoditization, a next-gen MSP differentiates itself and understands how to sell the front office: the CMO, CFO, the procurement officer, the supply-chain officer. These are people who have traditionally dabbled in ERP. They’re increasingly becoming part of the conversation, so the successful next-gen MSP must have a business mindset in terms of how it sells. In other words, it’s about numbers: translating the benefits of what the customer gains into specific dollar amounts. Now, what are they selling? To differentiate against the creeping commoditization of MSPs, they’re specializing in verticals like healthcare and finance, horizontal SaaS, PaaS like gaming and mobile, and particularly BPaaS like marketing and human capital. The fundamental underpinning of a next-generation MSP is cloud. When you’re able to quickly deploy cloud applications in an integrated environment, you save money by avoiding technical mistakes. The next-gen MSP uses cloud to maximize margins, reduce errors, and deploy as quickly as possible. 5 tips for an MSP to get started transforming his business

  1. Assess how your company is different from the MSP down the street. Then ask: where are your profits based? Will you have to compete on price in a few years? Areyou starting to compete on price now? Light the fire.
  2. Take your existing service lines into the cloud. Managed storage is an easy example: create a Disaster Recovery service or Business Continuity capability. No investment appetite? Go SaaS to match your cash flow. Your clients are ready for cloud – are you?
  3. Start transforming your salesforce to sell cloud solutions, to new buyers likethe CMO, CFO, and CPO. They now control 50% of the enterprise IT spend. Sell offerings that minimize your risk and compliment your service catalog.
  4. Invest in next generation systems and storage which enable you to spin up client applications and new services in minutes, not days. Ensure those systems are based on software so you can be flexible, adapting your expense equation to client workloads and business cycles.
  5. Partner with ISVs. Think about the sea of change that every on-premises ISV is facing. They need help; you are their trusted advisor along that journey. Your reward will be further differentiation based on their customer base and an annuity stream from the services you provide them.

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