MSPs have had an opportunity to provide a real helping hand for businesses over the last couple of years, as companies embark on digital transformation journeys and adopt remote and hybrid working practices in the wake of the pandemic.
David Tulip, managing director, Network Group and Technology To Go (pictured below, right) said that the SME market in particular has changed a great deal during the course of the pandemic, with an acceleration of digital transformation taking place from Spring 2020 and many companies moving plans forward by around five years in just a matter of months.
“As a result, MSPs had to react quickly and rapidly evolve their business models to ensure they could deliver and support a cloud-first customer base,” Tulip said. “‘Work-from-anywhere’ is now no longer a future possibility or a temporary solution, but a working practice that will likely become permanent.
“The challenge — and opportunity — that MSPs now face is how to retain those clients with the right stack that provides an attractive way of working in this hybrid world…and of course, do so in a cost effective and secure manner.”
Changes that were made two years ago need to be assessed, and where necessary, reset, Tulip said, adding that MSPs must consider whether those changes are sustainable, profitable and can allow for service levels to be maintained with the right tools and procedures in place to support customers ‘for the long-haul’.
“MSPs really stepped up during the pandemic, demonstrating their value as trusted advisors and business support to their customers. By ensuring they ‘kept the lights on’ for their customers, enabling them to keep their businesses open, MSPs have rightly earned their place as being integral to their customer’s business success,” he commented.
“This has now given them a platform to offer comprehensive IT support and consultancy that extends well beyond the traditional IT department but throughout their client’s entire business operations — IT budget’s are now cross-departmental, not just traditional ‘IT’ spend.
“Those savvy, high-capability MSPs will capitalise on this, drilling into business process to understand how they can help their customers going forwards. The holy grail is becoming your client’s ‘one-stop-shop’, an all-in-one partner that can offer an array of services to support their clients’ evolving needs – encompassing IT, print, telecoms, cybersecurity and communications.”
Acquisition could be a way to achieve this, he pointed out, allowing MSPs to access further resources, niche skills and experience or entry into desirable vertical markets to ensure the strongest possible value propositions.
Recently published research from software provider Kaseya showed that the effects of the pandemic are still throwing up challenges for MSPs. The company’s 2022 MSP Benchmark Survey showed some of the key pain points highlighted by over 1,200 MSPs across the globe participating in the research — 76 per cent of which said the pandemic affected their ability to expand services within their customer base.
Remote working has presented opportunities, with 22 per cent of respondents saying that the remote workforce setup was top service requested by clients, followed by cloud migration (21 per cent) and business continuity (13 per cent). Yet, MSPs’ customers are seeing remote working changes as one of the biggest pain points, with 36 per cent of respondents selecting it as one of the top three IT problems for clients in 2022.
Amongst the priorities on top of the agenda, it seems that cybersecurity is a primary focus, and for good reason. Half of the MSPs surveyed by Kaseya agreed that their business is more at risk to cybercrime compared to one year ago, an 11 per cent increase from 2021’s data. Almost half of the MSPs reported that a ‘significant’ portion of clients fell victim to a cyber attack within the last year.
But the cybersecurity challenge, much like the challenge of adapting to a remote working setup, is bringing plenty of revenue opportunities. Half of the MSPs said they evaluate the threat landscape quarterly to add new service offerings.
“The evolving threat landscape has meant the rise of the managed security service provider (MSSP) — an IT service provider that focuses on delivering outsourced cybersecurity monitoring and management services,” said Jason Howells, VP MSP international sales at Barracuda MSP.
“This functionality sets an MSSP apart from an MSP. MSPs take on the task of servicing an organisation’s entire IT environment, which means that most MSPs can provide only a basic level of security to customers. MSSPs take on the special mission of upholding customers’ security requirements by offering 24/7 network monitoring services along with other continuous security functions such as vulnerability management and security configuration.”
Howells concluded that every MSP will need to adopt a cybersecurity-centric model in order to succeed, adding that over the next few years, he believes an MSP's continued success will be determined by their ability to continuously assess their customers’ security postures, look for opportunities to improve and to address any technological or human gaps that may impact safekeeping of data.
Compliance is another challenge where MSPs are seeing increasing opportunity to provide guidance to SMEs as they navigate the evolving threat landscape and migration to the cloud.
Nearly every organisation is in the process of moving to the public cloud, said Simon Chappell, CEO of Assured Data Protection, and will be concerned about data security and compliance with speed and access also ‘front of mind’.
“Businesses need reassurance that their customers and employees can access data quickly and without any problems,” he commented. “These are just some of the issues that businesses are dealing with as migration to the cloud accelerates across all industries. Businesses are finding out that moving to the cloud is far more complex than they thought. The growing demand for cloud resources has led to a new breed of MSPs that can deliver a range of services from data backup to cybersecurity.”
Well placed to become the aggregator of all different types of solutions, MSPs can provide the expertise that customers need to implement the right solutions as we see the effects of this changing landscape, Chappell added.
“One of the key issues businesses now face is re-training IT staff to take a more holistic view of their security and data. There has been a traditional split between these two functions like the old division between sales and marketing.
“The faster businesses can blend the two, the more they will be protected. Also, many companies are moving to the cloud and may not take the time to really understand how this will affect the way they protect, store and access their data.”
Johannes Kamleitner, VP global channel sales at N-able agreed that we’ll likely continue to see an increased focus on compliance and regulation frameworks. “There will also be a shift away from device-based computing into resource and performance cost management,” Kamleitner said. “This means managing how SMEs best use SaaS applications, offering virtual desktop services or even managing Azure services.”
“This year has been a tipping point for MSPs embracing cloud-based models. Partly this is down to hybrid working, but a big part of the shift is the increase in Microsoft 365 licensing. When such a fundamental product is cloud-based, everything else is likely to follow. The sharp rise in cyber threats has led MSPs to offer additional, more advanced security services such as advanced threat protection and endpoint detection and response, plus embracing multi-layered security practices.”
Meanwhile, in line with the UK government’s announcement at the beginning of this year, revealing plans to update the Network and Information Systems (NIS) Regulations to include MSPs, many will need to ensure they themselves are adhering to rigorous standards where security is concerned.
“MSPs have had a lot to deal with over the past two years … but the ones who have come out strongest in this time are those who have engaged with their vendor partners and asked for help to put the necessary measures in place,” said Barracuda MSP’s Jason Howells.
“As a result, they are well-placed to handle the new government legislation coming into place and are being viewed as an essential service by their customers.”
Engagement with vendors and distributors, building stronger relationships with an emphasis on working collaboratively will be key in addressing the challenges faced by MSPs and their customers this year. The channel ecosystem is critical, said Network Group and Technology To Go managing director David Tulip.
“Gone are the days where products were shifted from sheds to us all, vendors are not there just for buying and selling products – if they are then I would suggest they are probably the wrong vendors for you to be engaged with,” he told Comms Business.
“For true success, relationships need to be more than simply transactional. Strive to build good relationships with your vendor partners/suppliers and maximise all that they have to offer – there is a vast amount of help and support available to businesses — from advice and training to financial assistance and help making any necessary investments in your business.”
Nick Bannister, VP sales for distributor Arrow Electronics’ enterprise computing solutions business in the UK and Ireland (pictured right), said that there is significant support to draw on to help MSPs win business.
“An important thing to note here is that many vendors have MSP programmes,” Bannister said. “Those that are most supportive include SLA provision and allow MSPs to commit on a monthly basis. MSPs want a program that scales with them as they grow rather than having to make an upfront investment.
“The role of the distributor is to help MSPs navigate their way through this – this is where the real value add is — as well as offering support such as events, training, go to market that can extend reach, and so much more.”
Adoption of vendors that have released ‘cloud-ready’ MSP programmes as a way of reducing lead times and sales cycles is on the increase, he continued.
“The MSP market is very acquisitive, and therefore many MSPs have complex supply chains. A business like Arrow Electronics can help to streamline and consolidate these supply chains by giving one point of contact for supply, support and value add.
“There is a rise in online marketplaces, such as cloud management platform ArrowSphere, providing a self-service experience that drives growth, resulting in more autonomy for customers and less transactional management for MSPs.”
The skills shortage will present another challenge whereby MSPs will need additional support from vendors and distributors — Kaseya’s findings showed that just under 20 per cent of MSPs think hiring will be their ‘primary challenge’ in 2022, a 15 per cent increase on data from 2021.
“Vendors and distributors should work together with their MSPs to help them to grow their business and retain existing clients, not keep trying to ‘sell’ to them,” said Barracuda’s Jason Howells.
“MSPs must take advantage of any new talent coming into this industry, and vendors and distributors can help develop and deepen the existing skill sets MSPs have access to.
In the coming year, we are going to see greater demand for expertise around mobile device security, especially as rules, regulation and new compliance requirements are put in place around privacy.”
MSPs will also need to expand their knowledge around public cloud, he said, as the technology becomes increasingly more accepted by businesses of all sizes in the wake of the pandemic — vendors and distributors can play a role in helping to achieve this too, he added.
“OEMs and larger vendors are now recognising the value that MSPs have to offer,” said Assured Data Protection’s Simon Chappell. “The demand for cloud technologies and managed services are on the rise and vendors are looking at ways to meet these requirements and lower the overall cost of a sale. As a result, the OEMs are investing more in their MSP networks to drive revenues and open-up new lines of business.
“Having a viable MSP option removes the need to invest in new sales teams. Instead, they can look at transforming their solutions into SaaS offerings to open new market opportunities with segments — and regions — they probably haven’t considered targeting before. This MSP resurgence will provide a boost to vendors and OEMs looking to drive sales and resellers looking to grow their portfolios.”
This feature appeared in our April 2022 print issue. You can read the magazine in full here.