Articles
RSSBe An Original: Collaborate And Avoid Commoditization
June 27, 2008
There's no question that some solutions providers have figured out how to make real money with managed services. Successful MSPs (managed service providers) are enjoying the stability that comes along with the recurring revenue associated with their services. They also realize the efficiencies that can come with using tools that automate both the delivery and the management of many IT services. Even in a challenging market, many MSPs are reporting healthy profits, solid revenues, and measurable gains in tech utilization rates.
The steady proliferation of managed services over the last couple years has been driven by an increase in the number of solutions providers getting into the game, as well as from established players increasing the number of MSP offerings in their IT services portfolio. Growth is also being fueled by a new wave of MSPs who are offering turnkey managed services that solutions providers can simply resell to their customers.
So, what's wrong with this picture? To put it simply, the delivery of basic managed services — such as remote monitoring, patch management, and e-mail protection — has already become somewhat commoditized, and as more managed services enter into the mainstream IT channel, the impact is going to bring a steady increase in competition and accelerate commoditization.
This means that VARs and MSPs need to re-think what their real 'value-add' is in the delivery of these services. And the answer is the unique knowledge of their clients' business needs, and the unique relationship they have established as trusted technology advisors.
For many VARs and MSPs, this is a tall order and one they may not be able to take on alone; nobody can be an expert on everything. That's when an IT services platform can help. I believe that to be successful now, and in the future, solutions providers and MSPs should use an IT services management platform that not only manages their internal operations, but also enables and facilitates working collaboration with other qualified services providers, vendors, and networks.
Some would call this model 'co-opetition,' but I believe the whole is greater than the sum of the parts. It can be easier and less expensive for solutions providers and MSPs to build a network of trusted partners and peers with unique technology expertise than to cover all the bases internally with additional technology or headcount to support. By outsourcing to specialists those services that you only need to occasionally deliver, or that have already become commoditized, you can focus more of your resources on building your client relationships and establishing specialized offerings.
Bob Godgart is a founder and CEO of Autotask, an innovative software company whose products help tens of thousands of IT service professionals worldwide build stronger, more profitable businesses by automating their IT services and helping them to manage their people, projects, and processes with added efficiency and precision.
