The Need to Expand the Meaning of MSP
More and more service providers are calling themselves Managed Service Providers (MSPs). In business tech-speak, this term is generally used to refer to those who remotely manage the infrastructure and/or end user tools of the businesses they work with. This could include a range of focus points from account management and security services to remote monitoring and data retention tools. But, so many IT service providers have adopted the name MSP that the definition has actually become less specific and fairly blurry to potential clients.
Instead of covering all of the above services, some MSPs strictly manage server or application performance while others solely manage connections between geographically diverse locations. Some will only focus on data and network security and a few forward-thinking MSPs will offer extensive services around monitoring the performance of cloud services as well as on-premise infrastructure
Grow or die
The problem that all MSPs share is the need to grow their businesses or watch them shrink, recede and ultimately close. Given the price-competitiveness that has always been a hallmark of the IT industry, there will always be someone who will offer the same services for a lower price.
However, it’s important to note that growing the business is not necessarily accomplished by adding more clients. In fact, some sources say that the cost of acquiring a new customer may very well be over 30 times that of keeping an existing one. After all, repeat customers are the ones that spend roughly 67% more on products and services. So, it’s more profitable to invest in solutions that will add value to your overall offerings so that you can maintain a reputable relationship with customers who are able to quickly find what they need and receive support throughout the process.
As the world becomes more focused on digital advancements, more clients are choosing to migrate to the cloud for a multitude of benefits. Figure 1 outlines the results from a survey where 300 IT professionals with decision-making authority or influence were asked what the leading benefits of using cloud infrastructure were for their organization. The results indicated that 22% saw security benefits, 15% saw increased efficiency and 12% saw improved data space as driving forces behind the cloud movement, making it a primary area of focus for service providers.
To meet the growing demand for cloud services, some MSPs have found a way to expand their service portfolios and boost their offerings by joining the Microsoft Cloud Solutions Provider program and becoming CSPs. In the end, the benefits include, but are not limited to:
- Improved efficiency with Public Cloud, Private Cloud and IT services
- 24/7 support with proactive management and monitoring to reduce downtime
- Increased productivity with customized solutions from Microsoft Azure
- Simplified billing for all cloud services
As clients move away from on-premise servers, preferring to subscribe to cloud platforms, they find themselves challenged to identify the best strategy for re-deploying their core business applications and cost-effectively manage new ones. They are looking for partners to handle not only their applications, but also their sensitive data.
Even smaller clients who cannot justify the expense of staffing an internal team, see the advantages. Ultimately, MSPs who offer secure, reliable and flexible solutions to help clients manage data are in very high demand.
Paving the path for clients to come from their own on-premise servers and move to the Azure platform, Microsoft continues to introduce new programs to make it easier for partners to adopt cloud-based solutions and participate. Combining the Cloud Solution Provider (CSP) program with the Service Provider License Agreement (SPLA) creates excellent opportunities for partners to expand their managed service provider IT solutions within their existing client base — as well as to new accounts.
SPLA enables CSPs to combine Microsoft platform services like SQL Server with their own applications, or those provided by third-party Independent Software Vendors (ISV) into one package, giving the customer one invoice to pay and one relationship through which to obtain support, guidance and advice. In this model, the CSP owns the Microsoft licensing and leases or rents it to the end users as a component of the overall solution. CSPs enjoy an extensive toolset to help them manage and optimize their clients’ deployments.