It happens without fail each year at around this time. Managed service providers (MSPs) everywhere are busy planning for 2013. They are developing new service offerings, improving existing offerings and re-evaluating or cultivating technology vendor relationships. The future of the cloud and managed services model remains strong, but there are plenty of pitfalls to be aware of if MSPs want to successfully navigate 2013 and beyond.
Be careful about cloud cost savings. Managed services have always been, at least in part, about saving customers money. This year will bring expenses to the forefront of many managed services discussions. MSPs need to pay particular attention to customers that are solely looking at the cloud and managed services model as a way to save money. This could be a trap for many MSPs that don't know how to effectively address these issues without getting pushed into a commodity role.
Partner selection matters in post-channel era. The days of easily selecting your technology vendors are now officially over. Vendors that sell managed services and MSPs that sell through the channel have all but eradicated the old ways of the channel. That's the bad news. The good news is there are plenty of solid companies out there that would make great partners -- you just have to find them. Whether you are looking for hardware or software vendors, an outsourced network operations center (NOC) and help desk, a vertical partner or some other form of boutique service or capability, there are many companies to choose from. Just make your choice carefully.
Don't fall for "fake" cloud partners. Our profession has always had its share of unqualified companies, including vendors and service providers that say all the right things but cannot deliver on them. In 2013, expect to see a big increase in those deceptive tactics as more companies make a push into the channel, primarily through cloud.
MSPs need to practice operating as if they were under constant scrutiny -- because they are.
Cloud computing is the new gold rush, and there is no shortage of companies that will say and do anything in order to cash in on this lucrative and growing market. MSPs need to be vigilant in their choice of new partners so they won't get taken advantage of nor have their reputations harmed in any way.
Transparency matters. The need for transparency is not new, but the stakes have never been higher for MSPs to address it. We have reached a point in our profession's history where MSPs can no longer hide behind the claim of technical confusion.
Everyone knows about cloud and the managed services model today. This means the days of working in the shadows are over and the days of operating under the bright light of transparency and accountability are now upon us. MSPs need to be open when it comes to telling customers how they do things. Customers are becoming more educated when it comes to cloud and managed services and MSPs can no longer shield their internal practices from the outside world. MSPs need to practice operating as if they were under constant scrutiny -- because they are.
Regulation is likely to creep into MSP market. For the last few years, federal regulation of managed services has not come directly but indirectly. This means there would likely be some issue that grabs the public's attention and indirectly places MSPs under the government's microscope.
The new U.S. health care reform law is a perfect example of how this could happen. Data privacy and security surrounding electronic medical records may well be the catalyst for some government body to begin regulating how MSPs interact with this type of data. This could also include regulating how MSPs operate and maybe even what kind of company gets to call itself an MSP. Maybe it seems far-fetched, but it's not impossible. MSPs need to get involved and ensure that they remain in charge of their future.
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Build a managed security service or get left behind. Managed services have always been about protecting data. Today, it is safe to say cloud and managed services are tightly fused with the goal of securing information. MSPs that solely focus on monitoring may find it increasingly difficult to remain competitive in 2013 and beyond. Adding managed security services to your portfolio might just be a career-saving decision.
I do not believe anything in 2013 will happen that we have not already contemplated. Regulation, transparency and confusing channel relationships have been the subjects of countless debates at MSP events for that last decade. Many of the ideas, however, are now becoming reality.
The good news is that cloud and managed services remain among the most vibrant, powerful and growth-oriented professions on the planet. MSPs that are positioned for growth and have sufficient resources to adapt in 2013 will be the ones that survive and prosper.
About the author:
Charles Weaver is the CEO and co-founder of the International Association of Cloud and Managed Service Providers, also known as the MSPAlliance. Since its founding in 2000, the MSPAlliance has grown from less than five founding members to more than 14,000 members worldwide. Under Weaver's management, the MSPAlliance has expanded its reach and influence to issues around education, standards of conduct and certifications for managed services professionals and companies. In addition to running the daily operational activities of the MSPAlliance, Weaver writes and speaks extensively around the world on the managed services industry. He is the author of the book The Art of Managed Services.
This was first published in January 2013