How are Regulated Industries using Managed Services?

Government is tightening rules and regulations on data storage and security especially in regulated industries such as healthcare, and financial services. These sectors include doctor’s offices, banks, and credit unions, where sensitive information is collected and stored. Firms in these industries are leveraging the expertise of Managed Service Providers (MSPs) to setup and manage compliant IT environments. Hence, these providers are on the front lines ensuring data security and navigating a myriad of laws and regulations on behalf of their clients.

According to AMI’s Global Model, SMBs across the world are spending almost $63B on remotely managed services, this spending is forecasted to grow at 15% CAGR by 2021. SMBs in regulated industries such as Banking/Finance and Healthcare account for nearly 20% of this spending and is forecast to grow at 12% CAGR by 2021. This represents overwhelming opportunities for MSPs in these industries especially in providing specialized managed services such as security, storage and networking to mention a few.

MSPs serving these industries are handling responsibilities above and beyond handling managed services. The focus is not only on keeping people and systems working, but also on making sure they work in a legally compliant manner. These MSPs typically have a dedicated compliance and security department that stays on top of regulations such as the Health Insurance Portability and Accountability Act (HIPAA), and the Payment Card Industry Data Security Standard (PCI DSS). In case of a successful hack, investigators determine whether the victim organization followed all laws, had appropriate policies and procedures in place, and if the IT department was properly designed and capable of handling the security needs. The aim is to examine if the IT department was susceptible to that breach or hack. MSPs serving these industries need to be diligent and take an active role in encouraging their clients to update their policies and meticulously follow procedures.

A recent study conducted by AMI shows that MSPs are increasingly focusing on these regulated industries to expand their portfolios and customer base. Larger MSPs with more than $10M in annual revenues are forming vendor partnerships with the needs of their regulated industry clients in mind. The top of mind concern for these MSPs while partnering with vendors, be it an Remote Monitoring & Management (RMM) vendor or a Professional Services Automation (PSA) vendor or a hosting platform provider, is to ensure that they carry relevant compliance certifications and audit credentials. In addition, serving regulated industries and demonstrating vertical industry specific expertise allows MSPs to stand out in a crowded, commoditized MSP market. AMI’s MSP Study shows that MSPs focus on services such as Disaster Recovery as a Service (DRaaS), and Archiving as a Service (AraaS) especially in regulated verticals. It is imperative to store/archive historical data as well as to have systems up and running all the time with fast up time in case of an outage.

The stakes are high for businesses as far as security and compliance are concerned. Businesses are looking for ways to offload these cumbersome tasks on experienced partners in order to focus on their core missions. So, MSPs are increasingly targeting these regulated industries that cannot afford to be lenient with their security standards.

~Kunika Sodhi, Associate

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

5 SMB Pros and Cons for the Cloud

You take the good, you take the bad, you take them both and there you have, the facts of life. The feeling of nostalgia for that staple of 1980s television The Facts of Life notwithstanding, the good and the bad can be applied to that ever-expanding network we call the Cloud. At an event hosted by Rackspace, your intrepid blogger was brought up to speed on recent developments and how the company is working toward its corporate goal of being “The preeminent IT services company in the world”.  The cloud is the primary focus of Rackspace and numerous competing companies all over the world. There are challenges to face but also opportunities to seize. Let’s look at the challenges that Rackspace identified with the cloud and then put an SMB focused lens on reasons for subscribing or not subscribing to cloud solutions.

All data equal?
SMBs are putting data on the cloud

Top Challenges

The topics on analyst day covered all facets of the Rackspace portfolio and numerous employees shared their subject matter expertise. Additionally, several customers shared stories about their transformation with Rackspace and how their business has changed over the years. The cloud presents both an opportunity to customers as well a challenge and we’ll see that difference in position can be a matter of perspective. Continue reading “5 SMB Pros and Cons for the Cloud”

MSPs to capture $1.0T in ICT spending by 2021

Large numbers have a certain aura to them. We almost disrespect these figures by using abbreviations. One trillion dollars written out looks like $1,000,000,000,000 and for those wondering, such a sum would weigh approximately 10,000 tons (9,071.85 short tons) when carried around in the largest denomination US currency currently in circulation, the ever popular $100 bill. To have such transportation and storage problems… For the sake of preserving the “0” key, we’ll stick to the $1.0T abbreviation for the rest of this piece, but there is no shortening the drive of MSPs to capture an increasing share of global information and communication technology (ICT) spending across the SMB and Large Enterprise space.

MSP spending capture growth
$1.0T in spending capture… that’s a spicy meatball

 

 

 

 

 

 

 

 

 

 

 

How are MSPs winning?

There are a host of factors contributing to the rise in MSP spending capture toward the $1.0T plateau. As with any business, Continue reading “MSPs to capture $1.0T in ICT spending by 2021”

SAP SAPPHIRE NOW – May 2017

SAP Leonardo Tackles Digital Transformation 

SAP has made digital transformation less amorphous by announcing Leonardo – a collection of tools, technologies, and methodologies branded under the “Leonardo” umbrella, that allow for structure in the way businesses can begin to envision and plan for being more digital.

With SAP S4/HANA at its core, Leonardo aggregates IoT, Machine Learning, AI, Design Thinking, Big Data, and Blockchain into a complete system with accelerators (pre-packaged frameworks) for various vertical industries.

Leonardo is clever packaging and branding of multiple technologies and solutions, which will allow businesses to envision and plan the nature of digital transformation they want to undertake and shape. It is an important first step in getting conversations started, and moving business executives away from a state of digital-confusion to structured digital-exploration and activation.

SAP’s Digital Boardroom solution encapsulates how a highly digitized business may work and make data driven decisions in real-time at the highest levels of management.

The go-to-market on Digital Transformation will entail Continue reading “SAP SAPPHIRE NOW – May 2017”

Storage in the Cyber Attack Era

Ransomware has returned to the front page in the form of the WannaCry threat sweeping the globe. AMI-Partners has written about cybersecurity before and it is a well known fact that being proactive is the best approach to security. In this blog, AMI will take a look at how a robust storage solution can help a company in the SMB space rebound from an attack.

Pay the butcher’s bill?

The WannaCry ransomware has arrived in 150 or so countries. Blame is still being assigned and solutions are being sought. Experts agree that paying a ransom isn’t the best course of action. There is no guarantee your files will be decrypted. The sting of having been on the receiving end of the malicious attack will be compounded by the fruitlessly spent funds filling the coffers of criminals. However, each firm must respond as they see fit. If the rightful owners and users are locked out of files, retrieving duplicate information from storage can get a business up and running again. Of course, when ransoms aren’t paid, Continue reading “Storage in the Cyber Attack Era”

Business Services: In-House or Outsourced?

Companies of all sizes seek out cost savings. When it comes to deciding what business services to outsource (which can present a significant savings), small businesses must take a measured approach. The reality of giving up control over a facet of one’s business can be difficult for some, but if it makes good business sense, outsourcing can be the right move to make. Some services are more likely candidates for outside support than others. Let’s take a look at what the small business space in the United States is doing for outsourcing.

Pros and Cons of Outsourcing 

With any decision, particularly outsourcing, a weighing of the pros and cons must be taken up in order to determine if the correct move is being made. Personal preference plays a big part in the decision making process. Each business is unique and a thorough review should be conducted before reaching a verdict.

Outsourcing of Business Services

Pros

Cons

Frees up time for core competencies Loss of internal control
Access to subject matter experts Potential quality and accuracy concerns
Potential cost savings Time delays for customer support

The above table is not exhaustive of all the benefits and drawbacks. Rather, Continue reading “Business Services: In-House or Outsourced?”

DRaaS for SMBs?

A disaster may be unavoidable. Predicting misfortune isn’t an exact science. However, recovering from such an event can and should be planned well in advance. With the sizable amount of valuable data generated daily, the risk of losing this information becomes a going concern for businesses of all size. Disaster recovery as a service (DRaaS) is becoming a viable option for the SMB space. Should it be?

What is DRaaS and is it contagious

DRaaS is a cloud based solution that allows for the replication and hosting of physical or virtual servers by a 3rd party to provide data recovery in the event of a man-made or natural catastrophe. This enables failover of virtual machines to secure cloud locations. The modern business climate is more likely to be disrupted by a human generated event than a natural one. Malicious attacks, honest user error, upgrade issues and a bad line of code can do just as much damage as a storm. As with most services accessed via the cloud, DRaaS is a pay as you need solution and is configured to operate in the background as it automatically performs backups of critical systems and data.  If your business needs ‘n’ TB of storage, you only need to pay for ‘n’ TB of storage. This flexibility allows SMBs to scale accordingly to match evolving business needs.

Solutions such asbut not limited to Microsoft Azure Site Recovery, Quorum onQ Hybrid Cloud Solution, Zetta Backup and Recovery, and Carbonite Server Backup all offer DRaaS to the SMB market. A careful evaluation of business Continue reading “DRaaS for SMBs?”

2017: An SMB Odyssey

Happy New Year! The start of a new year often brings reflections on the past and forecasts for the future. Resolutions and changes abound but are often discarded before the calendar turns to February. Hopefully you’ve noticed the new layout for our blog and AMI-Partners assures you it will not change back come Groundhog Day.

Keep on Writin’…

Moving forward, we will do our best to post regular updates, to keep the writing style as informal and conversational as the subject matter permits, and to offer more in the way of knowledge sharing as we strive to enhance our reputation as a leader in the SMB ICT space. Our work helps leading organizations to better understand the small and medium business landscape. We believe this Continue reading “2017: An SMB Odyssey”

SAP SME Summit: Highlights and Insights

SAP Provided its Annual SME Update on November 17, 2016 – Key Highlights Included the Following:

  • SAP now has over 250,000+ SME customers worldwide
  • 13,000 new SME were customers added in 1H2016, a 5%+ increase over 2015 installed base
  • 2015 cloud subscriptions and support grew by 82% to $2.3B (SME + other segments)
  • ByD positioning as SAP’s SME cloud offering is also tightly aligned with matching sales motion – partner + e-center led, and appropriately incentivized to focus on SMEs only
  • SME customers have a choice of consumption models – cloud vs. on-prem – between SAP’s portfolio of All-in-One (on-prem), ByD (Cloud), Business One (Cloud and on-prem), and Anywhere (cloud CRM, inventory, mobile, and e-commerce)
  • SAP Digital allows customers to buy online with SAP Anywhere being the key SME product in this category – this selling motion was launched in 2015 and continues to be fortified
  • Referral option added to PartnerEdge Cloud Choice program to expand SAP’s partner coverage

SME and SAP Performance During 2015-16

  • By most measures SAP is performing well in the SME space. A growth of 5% in the installed base within a 6-month period is impressive, given that our internal SME tracking models show the total SME ERP/CRM/HR installed base growing at about 5-6% Y/Y.
  • AMI typically defines SMEs as commercially located firms with 1-1000 employees. When defined as such, we estimate between 5.5 – 5.8 million firms were using ERP/CRM/HR in 2015. This is out of an estimated WW total of 75M SMEs. In other words, WW ERP/CRM/HR penetration is in the 7-8% range in the SME market.
  • When considering firms with 10-1,000 employees, that number drops to between 3-3.3 million firms – micro-businesses being a large chunk of all firms. Corresponding WW ERP/CRM/HR penetration rises to ~25% when micro-businesses are eliminated.
  • Depending on which of these definitions is selected, SAP’s share of the WW ERP/CRM/HR customer base may vary between 4%-8% at a WW level, using 250,000 as the base of SAP SME customers.

Key SME Trends and Concerns

SMEs are solving for 3 big business issues: Continue reading “SAP SME Summit: Highlights and Insights”