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With managed services shining a rare beam of light in an
otherwise gloomy market, a flurry of activity in this space is a certainty in
this new year.

The high-tech trade group Computing Technology Industry
Association predicts that competition among MSPs (managed services providers) will
intensify in 2009
as solution providers zero in on what they have identified as
a market with high growth potential. In a recent survey, the association found
that more than half of responding MSPs expect revenue growth of 25 percent in

To help fuel that growth, we can count on managed services
platform vendors such as Kaseya, N-able Technologies and LPI Level Platforms to
continue adding features to their technology to help MSPs increase and
diversify the services they offer customers.

Kaseya, for instance, is getting ready to add tools to
support mobile platforms such as the wildly popular iPhone from Apple, as well
as the Microsoft CE and Symbian platforms.
Level Platforms, meanwhile, is emphasizing cloud computing and virtualization
in its next Managed Workplace platform release.

To read about upcoming managed services for iPhones, click here.

Between the new features vendors are adding to their
technology and the level of integration between managed services systems and PSA
(professional services automation), solution providers will be better equipped
than ever to seize the growing opportunity in managed services.

A host of studies have predicted that not only managed
services, but also SAAS (software as a service) and cloud computing in general
are headed for healthy growth in 2009. The conventional wisdom is that as the
economy stalls and businesses put off capital expenses, they will turn to
per-user on-demand services and third-party systems monitoring and management
to run their IT environments.

While that is unquestionably a positive development for
solution providers that have made the investment in IT-as-a-service models,
those that haven’t or that only have stuck a toe in the water are more exposed
to the economic slowdown. There is no question that some specialties outside of
remote and on-demand services are still in demand, but providers that rely too
heavily on per-project revenue and equipment sales will feel the pain.

Naturally, a lot of them will be looking to finally get into
the managed services and SAAS space, which may explain the expectation of
intensifying competition this year among MSPs indicated by the CompTIA study.

Being the only kid on the block offering managed services is
already a thing of the past, anyway. Over the past year, MSPs started hearing
from customers that the customers were being approached by other providers
offering managed services.

At Northwest Computer Support, in Tukwila,
Wash., the increased competition helped the
company intensify its focus on managed services and win new clients, says Rex
Frank, the provider’s vice president of managed services. Those wins were
businesses that saw an opportunity to switch from providers with which they
were unhappy. Ironically, when their existing providers introduced them to
managed services, the customers would decide instead to give a provider with
more managed services experience a try.

Northwest Computer Support’s experience illustrates how much
tougher it is for solution providers to get into managed services. The model
requires not only adopting new technology but also making a cultural shift to a
different way of doing business. When MSPs were few and far between in the
market, a provider in transition could afford to make a mistake or two, but now
the margin for error is much slimmer.

Click here to read more about the challenge of succeeding at managed services.

Fortunately for new entrants, they can benefit from the
experience of others, and also tap organizations such as CompTIA, MSP Alliance,
MSP Partners and MSPSN for best practices and training.

Platform vendors, too, have built up their training
offerings, and as competition increases, they need to keep current on the needs
of their partners to help them succeed in the market. For their part, solution
providers making a decision on which platform to adopt need to evaluate which
vendor has the best training program to suit their needs.

For solution providers that have only dabbled in managed
services, or ignored the model altogether, getting serious about it now will
require careful planning and a fair amount of knowledge acquisition. Managed
services may indeed be a rare beam of light in tough economic times, but that
light is anything but free.

is a contributing editor
for Channel Insider.