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MSP Obstacles Rife in Channel

Confusion is still rampant in the MSP sector because providers still have difficulty defining the services they should be offering to the user. According to a study by Ziff Davis Enterprise Research of 325 MSPs, 46 percent of respondents said creating service definitions was the greatest obstacle to transitioning their businesses to a managed services […]

Written By

Sara Driscoll

Nov 19, 2007

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Confusion is still rampant in the MSP sector because providers still have difficulty defining the services they should be offering to the user.

According to a study by Ziff Davis Enterprise Research of 325 MSPs, 46 percent of respondents said creating service definitions was the greatest obstacle to transitioning their businesses to a managed services model. However, determining pricing was close behind, with 42 percent of respondents citing this as an obstacle.

Jon Collins, principal analyst at research firm, FreeForm Dynamics, said his studies had revealed similar findings. “Essentially firms use external services because it is something they can’t or don’t want to do themselves. End-users defining the boundaries around what they want to source externally is difficult because of the complexity of technology.”

Collins said remote monitoring for example, which the Ziff research showed is the most popular outsourced services from MSPs, is simple if users want a specific system monitored, but if they just ask for more general remote monitoring it is more difficult for the MSP to define what this encompasses.

What are the top five obstacles to transitioning to managed services? Find out here.

This definition complexity would then lead to the MSP creating a pricing structure. “If you can’t define a service you can’t price that service. If end users don’t know how much they have been spending on a particular part of their IT, then again they won’t know if they are saving costs and so won’t know if they are getting value or not.”

He added that this could be hampering the MSP model taking off among solution providers. “MSPs need to start by saying what they offer that helps an end-user do less. Managed services is a delivery mechanism, but right now some MSPs are not sure what they are delivering or why. Providers need to be specific, looking towards a goal, not a mechanism.”

The research also showed that the highest growing services that MSPs plan to offer within the next 12 months are endpoint security and discovery technology. Although the most popular already being offered is remote monitoring, this growth rate has slowed, as 60 percent of MSPs already offer this as a service.

However, Collins said it is likely this will change. “Right now what is proving popular among MSPs is not necessarily the right thing to be delivered. At the moment endpoint security and discovery are not necessarily perfect scenarios for MSPs; they just happened to be hot in the tech sector.”

MSP Obstacles Rife in Channel

Sara Driscoll

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