Got MSP?

Managed Service Providers (MSPs) are upping the stakes in the current cloud land grab. By rapidly expanding their portfolio of service offerings they expect to capture larger share of wallet. Their customers are aligned with this approach as they seek out full-service providers able to meet all their technology needs.

A Growing Market

By 2021 MSPs will deliver close to 25% of all technology products and services globally, up from 18% today. This is an impressive business transformation story – thousands of IT resellers and systems integrators (most of them small companies with less than $10M in revenues) have displayed a clear vision and competent leadership in enhancing their organizations’ capabilities and infrastructure to keep revenues growing in this challenging business climate.

The number of MSPs worldwide will grow from 50,000 to 75,000 between 2016-2021, with the total IT products/services they deliver growing from $500 billion to over $1 trillion during the same time.

Their services portfolios, which initially included pure infrastructure services such as storage, security essentials, compute power, web hosting, and application hosting, have now grown to include value add and higher margin services such as disaster recover/business continuity, e-discovery, vulnerability assessment, compliance management, application management, SaaS, and mobile device management among others.

Business Challenges

Despite being in a high growth business, MSPs face tough challenges which require constant attention and fine tuning of their business models. Some of the top challenges are:

  • Differentiating their services from those of other MSPs is a top priority to counter margin erosion and hyper-competition.
  • Absorbing newer technologies, tools, and solutions, packaging them for client consumption, and providing follow up services requires a constant learning and training.
  • Investing in datacenters is yet another critical challenge, which is often detrimental to smaller MSPs.

How Technology Vendors Can Help

Technology solution vendors that are supplying to MSPs can often play a big role in helping MSPs address these challenges. By fully understanding the nature of MSPs operational and business needs, vendors can design their products and programs to enable their MSP customers to win in the market-place.

Key features can be built into products and programs to make them a nuts-to-bolts solution, or packaged to work with other third-party solutions typically used by MSPs. Examples of the types of features that MSPs would like vendors to include in their solutions are:

  • Automation of overall solutions architecture.
  • Automation of customer on-boarding and migration processes.
  • Dynamic and predictive throughput/capability scaling.
  • Performance monitoring and predictive dashboards and controls.
  • Vertical industry-specific sales, marketing, and technical know how.
  • Vertical industry-specific compliance and reporting features.
  • Online university – modular online training videos and certification.

These are some of the insights we have uncovered in our tracking of the worldwide MSP segment. For additional insights and a detailed description of our MSP tracking service and various deliverables click here.

Alternatively, please email John Rezac (jrezac@ami-partners.com) for more details or to schedule a webinar that will walk you through our MSP coverage and insights.

~Deepinder Sahni, SVP

Global Model 2017

Your intrepid blogger wanted to take some time out to give you an update on the Global Forecast Model that AMI uses to track everything from small business spending on IoT hardware in the UK to shipments of smartphones in Brazil. For brevity, we simply refer to it as the GM. Each year, the GM is updated to give actionable insights on the Information and Communications Technology (ICT) space.

Highlights

Aside from the SMB space, which is our primary focus, the GM also provides insights across the entire commercial spectrum as well as the public sector. Home Based Business (HBB), large enterprises (1,000+ employees), and the government and education sectors are analyzed to provide granular insights into the industry. As long as a person is involved, AMI tracks the business. Granted, once Skynet finally goes online, Continue reading “Global Model 2017”

Layered Security Solutions

Earlier this week, AMI-Partners joined a call hosted by Trend Micro Inc. that discussed the firm’s collective capabilities in security, covered in three categories titled Hybrid Cloud Security, Network Defense, and User Protection. With security threats becoming more sophisticated, targeted, and frequent, having a layered security solution can prove beneficial in the SMB space. Yearly subscription prices per user range from $38 – $62 for this layered approach to security, which does not put it out of reach for the SMB market. These security solutions (Standard and Advanced packages) are available for both on-premise and hosted delivery.

Competition & Worldwide Spending

Trend Micro, a global security software company that develops products for servers and the cloud computing environment for consumers, governments, and the SMB market, competes in a crowded field with such well know names like McAfee, Microsoft, and Symantec. With an eye toward increased market share and profitability, the company is working to provide business customers with multiple solutions for cybersecurity. The firm is ranked as the top worldwide content security provider for small business (4 years running) by Canalys and claims to block 250M threats each day.

According to AMI’s Global Forecast Model, total worldwide SMB security spending Continue reading “Layered Security Solutions”

SMBs at risk of a Distributed Denial of Service attack?

Last week, Dyn, a cloud-based interest performance management company, was the target of a series of distributed denial of service (DDoS) attacks. These attacks interrupted service on more than 80 popular websites including CNN, The New York Times, Twitter, Electronic Arts, Airbnb, PayPal, Visa, Slack, Yammer, and Pixlr. The variety of the aforementioned sites illustrates the central role a traffic manager can play in the critical infrastructure of the internet. The company released a statement concerning the attack. The SMB market is vulnerable to such attacks, although on a smaller scale to the Dyn attack, and it pays to safeguard against such incidents.

 What is a DDos?

A DDoS is an attempt to make an online service unavailable by overwhelming it with traffic from multiple sources. In the case of Dyn, the attacks were coordinated via numerous Internet of Things (IoT) enabled devices such as cameras, routers, and even baby monitors. They were infected with malware that allowed for the IoT devices to be controlled remotely and send millions of malicious requests to Dyn. An analogy would be to the single toll booth that needs to collect fares from every car in several queues, converging from all lanes at the same time. The system becomes inundated and traffic grinds to a halt. A DDoS attack can be targeted at a small business that relies heavily (perhaps solely) on web traffic to generate revenue. If customers cannot reach a website due to heavy traffic, they cannot engage in commerce and a business loses out on revenue.

SMB Security spending (US)

 According to AMI’s Global Forecast Model, total security spending by the SMB market in the US is heavily directed toward Continue reading “SMBs at risk of a Distributed Denial of Service attack?”

Cisco: Enhancing Growth Opportunities through Consulting Services

AMI analysts had the opportunity to attend an APAC-level analyst update on Cisco Consulting Services (CCS) recently. Martin McPhee, SVP Cisco Consulting Services and Caspar Herzberg, VP APJ & GC Cisco Consulting Services were some of the key Cisco personnel who played an active role in briefing Analysts at this telepresence session.

As technology trends move ahead from a device-centric to solution-centric architecture, there’s an increased focus on following a consulting approach with customers. This gains greater importance with Cisco’s emphasis on Internet of Things / Internet of Everything (IoT/ IoE) where a huge Value at Stake has been estimated over the next decade. Increasing digitization will drive disruption and Cisco needs to collaborate closely with customers to implement the same successfully. IoE connects people, process, data and things – thus creating new opportunities for forward-thinking firms. The latter are on their way to align their strategies and practices to leverage IoE effectively. Almost 99.4% of the physical world is unconnected today and the number of connected entities is multiplying rapidly; at a rate of around 200,000 connections per hour. This has opened up a virtual storehouse of opportunities for Cisco and CCS acts as a backbone of the same.

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Cisco Consulting Services focuses on business and technology innovation and developing strategic solutions with the objective of enabling customers identify the hidden value in business and escalate growth. It also emphasizes on achieving optimum cost efficiencies for firms with the ultimate aim of reaching the pinnacle in term of business and technology performance. A key cornerstone of CCS is the thought leadership that has the capability of future forecasting to anticipate vital technology transitions and disseminate the same to customers.

In a nutshell, CCS helps CXOs manage a digital business transformation and capture their Internet Value at Stake. CCS branches into various arenas – e.g. IoE, Process & Application Automation, BI & Analytics, Collaboration, Video & Mobility, Cloud / IT Transformation and Security.

Let us focus on an interesting aspect of Cisco customer collaboration – through Cisco Hyper Innovation Living Labs (CHILL). Here – Cisco brings together end-customers from specific verticals. The latter meet with Cisco Specialists to jointly discuss, innovate and develop prototypes / solutions that can develop millions of dollars of value to the vertical. Cisco is planning on making “CHILL” part of selected Cisco IoE Innovation Centers around the world. A recent collaboration with the objective of “re-inventing retail” resulted in the development of four solutions with a combined market potential of $4B in just 48 hours!

Consulting with customers to truly understand their business problems is indeed a painstaking and stepwise exercise. Few key steps include – developing a Business Case Model for Revenue and Cost, developing Real Time Insights and Analytics, Brainstorming/ Idea creation, Prototyping, Capability development, building Business Insight Modules and finally – displaying Measurable Outcomes.

In terms of Potential IoE Value, High-tech, telecom and financial services verticals are ranked higher – as per a past Cisco IoE Value Index Study. However – Retail, energy and manufacturing possess higher future growth potential. In fact, manufacturers have a great potential for improving profits by enhancing M2M (Machine-To-Machine) and in the future M2P (Machine-To-Person) connections.

Some areas that need attention. . .

It is our belief that Cisco has indeed taken a positive step in increasing its emphasis on the Consulting and Services front. This was a foregone conclusion given the fact that its traditional products business is displaying a somewhat sluggish growth. Nonetheless, we feel there are indeed some areas that need attention . . . . :

There is some ambiguity in terms of the costing for the solutions which are developed collaboratively by Cisco and its customers through innovations. However – Cisco has mentioned that in the longer term, further work is being done in developing a monetizing approach for these joint consulting methods.

Another area that requires fine-tuning is building a suitable Partner ecosystem for the CCS team who can work alongside Cisco personnel and arrive at innovative business solutions for customers. Currently, Cisco is focusing on working more with its Tier-I managed partners like Deloitte, Accenture, McKinsey, etc. for the same. In the longer run, it also needs to include its Tier-II partners for capturing a greater share of the customer pie and reaching the bottom of the pyramid.

Considering the present adoption levels of IoT/ IoE and similar technologies, we estimate that Large Enterprises will remain the focused business segment for CCS for some time to come. It is likely to take some time for Cisco to penetrate the SMB segment since the latter may not reach the level of their enterprise counterparts in the near future vis-a-vis technology acceptance & mindset. A somewhat similar sentiment also prevails about firms in emerging nations. They significantly lag their more advanced counterparts in terms of IT and corresponding IoT/ IoE adoption. Cisco should put in an extra effort to win over the same. However – Cisco feels that there is indeed a bright spot; firms in emerging countries are aggressive and tend to be fast-movers; also they carry no legacy burdens – a key driver for adoption of new technologies. Thus, the opportunity for CCS within this segment is considerable.

CCS – a bright Future looms ahead. . .

 There is no doubt that despite some of the above niggling doubts, CCS is likely to march ahead, riding on the bright growth prospects of IoT/ IoE. The latter is sometimes termed by experts as being the largest market transition since the birth of the Internet driving business transformations more than ever before. CCS fosters innovation, serves as the creator of new business models and acts as a facilitator of business growth in the era of digital disruption, enabling cost efficiencies and fuelling business performance. Hence – CCS is anticipated to grow much faster and is likely to contribute a much higher proportion of Cisco’s global revenues.

~Dev Chakravarty, Manager – Research

Run Simple . . . and Flexible

Notes from SAPPHIRE 2015

SAP’s product portfolio has expanded over the last two years to address the growth in big data, analytics, digital marketing and the consumerization of technology. The product lineup includes (to name a notable few):

  • IoT (three new business applications announced in 2014, SAP HANA Cloud Platform for the Internet of Things and collaboration with Siemens, Intel, Jasper, Accenture and T-Systems announced in 2015)
  • Analytics (various tools such as Lumira for data preparation to visualization and predictive analytics)
  • Consumer Insight 365 (mobile data crunching for consumer insights and digital marketing)
  • HANA Cloud Platform (announced 2014)
  • SAP Digital (various tools targeted at individuals/small groups within businesses; easy to buy; low price points—announced May 2015)

These developments are driving topline growth in the cloud as announced April 21st, 2015—new cloud revenues were up by 121% while overall cloud and software revenues were up 24% for the January to March quarter, Y/Y. Of course, profitability took a hit because of the rapid revenue shift to the cloud. Separately, the SAP Store is starting to gather more product on its shelves as well, and is presenting an easier way to purchase both on-prem and cloud applications.

The above clearly shows SAP making strides in line with market evolution and not lagging behind the competition by any means. Margins on cloud are expected to take a hit for any player transitioning from on-prem to cloud, and eventually stabilize at a certain level as the transition is complete. Continue reading “Run Simple . . . and Flexible”