Replacing the 'M' in MSP With Other Terms

By Howard M. Cohen
IT service provider trend

What service can you offer that is not managed? The delivery of any service must be managed to assure quality, so calling it a "managed service" is somewhat like referring to "wet water."

Many service providers are dropping the superfluous word "managed" and replacing it with a wide variety of others in an effort to focus on their own specific value propositions. The increasing trend toward specialization has become more evident in the channel in recent years. Now it is becoming a survival strategy in which all channel partners need to invest time and careful planning.

Solution Selling and the Generalists of Yesteryear

When information technologies were fewer and more straightforward, channel partners could easily succeed as generalists.  Customers turned to one "solution provider" for everything, from servers to storage to software to systems infrastructure. They integrated everything together for customers who enjoyed complete solution that incorporated the best of each category.

"Solution selling" was everyone's strategy—to solve business problems with technology. Over time, however, the definition of "solution" began to soften. Soon, the term came to mean "infrastructure." To solve any problem, you threw more infrastructure at it.

However, the customer's definition of "solution" was still something that solved their current business challenge. They wanted relevant solutions, highly specialized solutions.

Focus Today on the Specializations of Tomorrow

Not only were customers less than satisfied with "infrastructure" solutions, but infrastructure itself has become a commoditized utility. Customers now know they don't need to invest in owning their own infrastructure. They can turn to Amazon Web Services, Microsoft Azure, IBM Softlayer or any of several other providers, and subscribe to whatever infrastructure services they require. 

Better yet, these services are far more responsive than having their own fixed infrastructure. Need more storage, more memory or more processor capability? No problem. No months-long procurement process. Just adjust your subscription. If you use more resources, you pay for them. When you're done with them, you release them and stop paying for them. Easy.

This leaves tens of thousands of channel infrastructure partners with a dilemma: what to do for a living now that customers no longer need what they're selling.

Many have turned in their "M" and exchanged it for a "C," becoming cloud service providers (CSPs). These new-wave specialists are expert at making cloud services from various vendors interoperate seamlessly and productively. Customers appreciate having a resource who can help them select and combine the best possible services.

We've already seen the rise of print service providers, communication service providers, disaster recovery-as-a-service (DRaaS) providers, desktop-as-a-service (DaaS) providers, integration platform-as-a-service (IPaaS) providers and many others.

The Need for Innovation

Midmarket customers have long turned to service providers to help them level the playing field with larger corporations by enabling them with similar IT services that they could not produce themselves. This can be expected to continue with greater diversification.

Customized software development is changing. With the rise of microservices packaged in containers with all the resources they require, the new development process involves having these encapsulated routines call each other as needed. This makes it possible to "assemble" applications rather than "code" them from scratch. This promises to drop development costs to a level that midmarket companies can afford.

The new definition of "data center" as an available collection of services, rather than an expensive physical plant will redefine how midmarket and smaller companies use IT, and how large corporations flex to meet changing opportunities. Service providers can now operate data centers for customers without investing a dime in infrastructure.

It's All About the Data

In the past several years, with the explosive rise of big data, companies have learned just how much they can do with data they already collect, and how much more they can achieve by collecting even more data. Processing and analyzing that data remains a challenge for them.

This makes the data scientist one of the most valuable players in tomorrow's IT landscape. Service providers will be called on to expand their roles and help customers collect, collate, process, analyze and report information and knowledge derived from all that data.  A combination of mathematical skills, statistical skills, computer capabilities and database administrator abilities, blended with an active imagination to help identify trends in the data, makes the data scientist an expensive person, but the kind of the person a new breed of IT practice can be built upon.

Service Providers

Just as medical doctors have all but abandoned "general practice" to focus on specialties, from cardiac care to ear, nose and throat, the IT service provider will diversify and focus. The time to start thinking about your future direction is now.

Howard M. Cohen is a 30-plus-year IT industry veteran who continues his commitment to the channel as a columnist and consultant.

This article was originally published on 2016-06-22