Anyone trying to tell you that the managed service provider business model is dead is most likely trying to sell you something. I have been seeing a few companies lately (all of whom sell technology to MSPs) create messaging saying pretty much the same thing: the MSP business model is dead or dying. In my opinion, this type of philosophy is rubbish.
For years, ever since the MSPAlliance was founded, I’ve been listening to people tell me the managed services business model is dead, MSPs are irrelevant, or there is a new business model waiting to supplant the MSPs. All of these themes are similar in nature. They also have something else in common: they were all wrong!
MSP Business Model Has Always Been About Change
The MSP business model has always been about managing different types of technologies, for multiple customers, on a one to many basis. That’s managed services in its simplest form. The technologies MSPs handle has always changed. In large part, that is why MSPs have remained so relevant when all around them are saying that the business model is failing.
There has always been an industry (I’ll call it the analyst community) who believes in making bold predictions and creating new terminology to replace the old. I’ve had my fair share of analysts tell me MSPs are dying, and yet I see more and more MSPs being created and thriving. Why is this?
Failure to Understand MSP Business
While most MSPs are thriving these days, it is safe to say that the MSP business model has been undergoing a significant change, but only in terms of the technology they have been using, not necessarily the business model itself. I’ll try and explain.
The constant evolution of technology is both what makes MSPs so vital in today’s world, but it also can cause great challenges to MSPs who refuse to recognize and act upon these changes. For MSPs who see the constant change of technology and use it as a competitive differentiator, but mostly as the bond that strengthens the relationship with the customer, these providers will remain on solid ground. For those MSPs who fail to see new technology for what it is and remain locked in out dated service delivery models, these providers will experience more hardship and challenges.
The distinction between these two types of MSPs should be clear. What should also be clear is that they share the same business model. The chief difference between these two is one MSP acts upon change and the other stagnates.
Don’t Believe The Naysayers
In my opinion, MSPs have gone through obvious periods of growth and less growth. I say this because for 20 years our profession hasn’t really seen any significant periods of decline, only varying degrees of growth. Today, we are in a period of modest IT spending increase, but a somewhat aggressive growth period of managed services and cloud computing spending (computed as a percentage of overall IT spending). More simply put, managed services spending is growing faster than the rate of general IT spending.
The point of me saying all this is to give comfort to those out there who may be susceptible to those organizations wanting you to believe your profession is dying. It isn’t. In fact, it has never been more relevant than today. If you want to see your MSP practice thrive, however, you do need to pay attention to the technology, make sure it is current, and adapt your business plans accordingly. Then, when the next person who tells you MSP is dead, you can laugh and respond.