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It's that time of year again, where we look back at the past year and try to make sense of what will come next year. 2015 was another busy year for managed services and cloud computing. Some of it challenging, but most of it positive. 2016, however, is shaping up to be quite interesting and could afford a lot of MSPs fantastic opportunities for growth. The trick, as it usually is, is in knowing how to read the tea leaves and accurately predict what is likely going to happen so you are ahead of the curve and not chasing it after it has happened.
So, with that in mind, here are some of the interesting things we think are likely going to be worth tracking in 2016.
MSPs and the War on Terror
It's no surprise that the global war on terror has crossed over into the cyber world. To date, the role of managed service providers has largely been secret; at least least there are no known cases of MSPs being involved in preventing terror related activity. This could all change in 2016.
The role of MSPs (and Cloud Service Providers/CSPs) is becoming more prominent with each passing year. The likelihood of legislation being written which impacts MSPs is high. In fact, such laws have already been enacted in China, requiring the assistance of technology companies in assisting the Chinese government with terror related investigations. Look for this type of law in other jurisdictions around the world.
Password Management Becomes Standard Operation Procedure for MSPs
It sometimes takes a while before best practices become common practices. Like other professions, it can take time for an activity to become commonly practiced versus just discussed and agreed upon. The time has come for password management technologies to be used widespread by MSPs.
In the case of password tools, these technologies have been around for years and have been used largely by consumers. 2015 saw some MSPs begin to offer password management solutions to their customers, but it is not enough. MSPs also need to start using password management technology for internal purposes as well. There are now good options for password management, even some being offered by RMM vendors. If you don't have a password management solution today, get one in 2016!
3rd Party Visibility & Transparency
We've written about this in previous years but this topic continues to be an issue in 2015 and will remain in 2016. MSPs have been dealing with the issue of compliance, certifications, and transparency for a long time. In particular, 3rd parties like data centers, co-location facilities, and 3rd party cloud providers, have long been known but largely ignored by customers and their regulators. 2016 will be different.
CEO and co-founder of MSPAlliance. Founded the organization in 2000 and grew it from 5 founding members to over 30,000 worldwide. Author of "The Art of Managed Services & Cloud Computing." Featured in the New York Times, Wall Street Journal, and Inc. Magazine.
Due to a variety of converging forces, such as 2015's political email scandals and high profile data breaches have caused the "powers that be" to a) become aware of MSPs, and b) realize the role MSPs can and should play in Information Technology management. The more visibile MSPs become, the more transparent they will have to be, including all of their 3rd party vendors and partners.
Data and MSP Geo-Location
It used to be a common phrase in MSP sales that MSPs could monitor and manage anything as long as there was an Internet connection. The same is still true today. However, the prevailing political winds today are fast requiring MSPs to disclose both the location of customer data (while under the care of the MSP) and the location of MSP staff.
In case you are wondering whether this is just speculation on our part, consider the following. This past November, the US-China Economic and Security Review Commission (USCC) recommended that the United States Congress review "existing consumer right-to-know laws to determine whether a cloud-based computing company has an affirmative duty to identify the physical location of its cloud based assets."
This type of ongoing review and analysis of data privacy laws are going to continue to impact the MSP and cloud computing profession. MSPs would be advised to be aware of these discussions and begin preparing their service offerings in light of these trends.
Improved security for internal MSP operations
The security offerings delivered to customers is often more advanced than what MSPs practice internally. This needs to change in 2016. For example, if MSPs deliver multi-factor authentication solutions to their customers but do not have that same technology in house, that must change. MSPs need to look first to their own security and then offer those same technology solutions to their customers.
Password management, multi-factor authentication, strong perimeter scanning and monitoring, ongoing internal monitoring of checks and balances within the service provider organization, etc. These are all valid examples of solutions which should be employed in even the smallest of MSP businesses. 2016 must be the year when MSPs really bolster their internal security.
Enhanced security offerings for customers
It's time to refresh your service offerings. MSPs still relying on monitoring and management alone are at risk of being extinct. In our ever cloud relevant world, new threats are demanding new solutions.
Customers who increasingly use cloud computing systems need new technology offerings such as multi-factor authentication, single sign-on, identify and access management, data privacy and security protection, and more comprehensive data backup and restoration options.
MSPs would be well served to re-evaluate all of their existing solutions for the new year to ensure they are relevant and effective.
EU Privacy Laws and Cloud Computing
What happens in Europe can happen elsewhere in the world. I'm speaking about the European Commission's work over the last year or so to update their various laws regarding privacy. Specifically, the EC is trying to take steps to protect its citizens against public cloud providers and data privacy and security violations.
Whether these laws will be beneficial is not known. What is clear is that the EU is serious and MSPs must be aware of these new laws. More generically, MSPs need to be aware of the demand for a mixture of both public and private cloud solutions in order to be fully prepared for the next decade of cloud based customers.
Public and Private Cloud Strategies
This has been on our list every year and 2016 is no different. MSPs must be prepared to offer both public and private cloud solutions to their customers. While it is relatively easy to deliver a public cloud solution, developing a private or hybrid cloud solution requires a bit more planning.
The good news is there are plenty of technology vendors (both hardware and software) capable of equipping MSPs with the necessary tools to create a viable private/hybrid cloud offering. What is clear is that MSPs need both approaches to be competitive for 2016 and beyond. And, with the hosted private cloud market estimated to grow at 34% (or $40 billion by 2019), MSPs need to be prepared.
Critical Infrastructure & MSPs
It's no secret that regulated industries like banking, finance, and health care have been lucrative practice areas for MSPs for many years. In 2016, we can add critical infrastructure to that list. I'm not talking about IT infrastructure; I'm referring to public infrastructure. Water treatment facilities, power plants, dams, oil refineries, and anything related to public services.
These facilities have gone under the radar for too long and now are becoming very real opportunities for MSPs. Why? These very facilities are becoming targets for hackers. Previous models for securing these facilities have focused on physical access deterrents. In 2016, IT is going to become a major focus within this community and MSPs need to be prepared.
Time to Change Your Pricing
2015 saw a lot of discussion around MSP pricing models. Suffice it to say that a lot of MSPs are using outdated and potentially harmful pricing models which could be inhibiting growth. Take a look at this article on MSP pricing alternatives.
Per device and per user pricing models are being put aside to make way for more relevant and margin rich models such as SLA or risk based pricing alternatives. Whatever your existing method of pricing may be, take some time in this new year to review how you are pricing your managed services offerings.
Summary
2016 should be another great year for managed services and cloud computing. How successful your company will be greatly depends on the planning you are doing right now. The most successful MSPs never take anything for granted. Successful MSPs treat each new year as an opportunity to change; sometimes these changes can be small adjustments while for others they can be big changes.
2016 will undoubtedly bring more opportunity and money being spent on managed services. The MSPs with the most current and relevant services will be the winners in 2016.
