By Mike Cullen, Senior Vice President, Sales, N-able by SolarWinds
There’s a shared sense that we’ve reached a major inflection point in the managed service provider (MSP) industry. A perfect storm of change has already made its mark, indicating that the immediate future is unlikely to resemble the past. So if you’re feeling the effects of cloud, mobile computing, IT anywhere, commoditization, and other movements that have turned the IT world upside down, then hold on tight — get ready for even more change in the next two years.
But don’t fear that change. Embrace it. Change always brings explosive opportunities and challenges. The way I see it, automation will unlock the key to a successful business and technology roadmap for today’s MSPs in the year ahead, and my biggest recommendation for anyone that wants to seize the day in this fast-moving market is to automate everything — as quickly as possible. With that in mind, here are five reasons why automation matters to today’s MSPs:
1. Get Lean: Automation is the use of control systems and information technologies to reduce operational costs and increase staff efficiencies in the delivery of IT services. Your company needs to run as efficiently as possible to stay ahead in the managed services business. Automation is hands down the fastest and easiest way to achieve that — and indeed, to embrace the changes that are transforming the managed services industry.
2. Combat Commoditization: The IT industry is the worst offender when it comes to commoditization. Managed services is reaching that stage now — driven in large part by the entry of aggressive new companies that are productizing their services. Once IT companies start productizing, they commoditize. That means you’ll see competitors who will stop selling on value and start selling on price. How are you going to justify a fixed fee, managed desktop service at $60 when a bigger, aggressive competitor offers to provide the same service for $50 per desktop? The reality is that price-driven customers shouldn’t be on your target list. But in order to stay competitive and free up your staff to demonstrate and differentiate true business value, you’ll need a strategy for achieving new levels of operational efficiency and that means greater IT automation.
3. Maintain Profitability: No doubt, commoditization is the biggest threat and challenge faced by traditional, pure-play MSPs. This is the change driver that is keeping MSPs up at night. In an ultra-competitive marketplace that’s rapidly being productized by new, bigger, well-resourced competitors, automation is your secret weapon for guaranteeing the efficiencies you need to maintain your profitability. This is particularly true as prices get driven down, as we fully expect in an increasingly commoditized marketplace. The only way to compete when your customers demand lower prices is the ability to deliver your services more quickly, efficiently, and profitably. When you are more efficient, you also gain a significant other benefit from automation: scalability. You are able to ramp up the number of devices supported by a support desk employee. Your business may grow — but your headcount stays. Automation drives-up the productivity and efficiency of each of your technicians and help desk employees, which also drives-up your revenue per employee. Automation, again, also helps keep your more advanced technicians and experts focused on higher value projects and services.
4. Demonstrate Value: Automation is also the key to profitably addressing the needs of SMB customers who are operating reactively at the break-fix, chaotic stage of the market. Automation allows you to demonstrate value and transition these customers into proactive, fixed-fee contracts. Automation equips you with a commodity fighting, “fixed-fee at a lower price” value proposition. And not only does automation extend to management of the cloud, but it also enables you to deal with the threat of cloud. Why? Because your customers are being told that migrating to cloud-based solutions is easy. The reality is that it’s not. Interfacing with the cloud requires complex technologies like PowerShell, Citrix VMWare, HyperV, and others. What you need is a strategy for inoculating your business from these complex cloud interfaces — while delivering to your end customers the management capability of the cloud. Again, automation can help. An automation solution that provides you with pre-automated policies based on best IT practices is the ultimate answer and solution for dealing efficiently with complex cloud technologies. Policies are basically pre-written scripts that perform tasks seamlessly in the background. So you don’t need to know PowerShell or VMWare or how to write complicated and usually expensive custom scripts. All you need to know is the workflow for your customers — then you select a policy and let it run.
5. Take Command of the Cloud: Another important consideration when dealing with the challenge of the cloud is this: your customer will actually have more points of failure that need to be monitored and managed in the cloud. In this respect, cloud adds complexity and drives demand for a trusted MSP. For example, at the top of the stack you have Office 365, which needs to be managed or administered: adding, deleting, changing users. This is complex to do, and no end user is going to do it on their own. You also have all the points of failure that sit below this: the Internet, the firewall, the router, the desktop, etc. All of that complexity still needs to be managed. But you are not delivering the capability of interfacing with the cloud — you are delivering the management capability of the cloud, made possible in large part by automation. And with that management comes a much bigger opportunity to leverage the relationship you have with your customers and become a trusted advisor.
So how can you ramp up your automation capabilities to get ahead of the game? New remote monitoring and management (RMM) tools and technologies — purpose-built for MSPs — offer IT service providers the ability to automate over 95 percent of standard IT tasks. And these new offerings are simple to use, with completely codeless and customizable features that allow MSPs to meet varying business needs. These RMM solutions offer hundreds of pre-built automation objects and policies based on IT best practices, enabling MSPs to leapfrog technical challenges with ease and extend and scale their managed services to the cloud and mobile users quickly and efficiently — all through automation.
The bottom line is that change is here and the market’s moving fast, but there’s no need to sit on the sidelines. Get on board with automation now so that you can set the stage for a big year ahead in 2014.
As senior vice president of sales for N-able by SolarWinds, Mike Cullen brings over 20 years of corporate sales experience to his MSP customers, and has assembled an equally experienced sales force. Prior to joining N-able, Cullen was vice president of sales (Ottawa Branch) and interim president of the Québec region for IKON Office Solutions. He grew the Ottawa business to $24 million in just five years, resulting in the Ottawa office's recognition as the branch office of the year in 2000. Cullen joined IKON in 1995 as a result of an acquisition of Fulline Office Products, an office equipment company he co-founded in 1988.