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”

To Print, or not to Print?

Be honest: ever hit a printer, fax, or copier because it wasn’t working?

The decision to print at the typical SMB likely does not cause the mind to suffer. While a single printed sheet might not register on the balance sheet, numerous documents sent to print and equipment expenses can have a significant monetary impact on a small business. Managed Print Services (MPS) is a solution that some SMBs are adopting to better control printing expenses. The real question for SMBs then: To manage print, or not to manage print?

So, something else to buy…

Think of MPS as something else available to help address a lack of resources. An SMB has a limited headcount and must focus efforts on revenue generating paths. MPS is a suite of services offered by an outside party to administer a firm’s document output. The MPS provider Continue reading “To Print, or not to Print?”

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”

SMBs Jumping on the Cloud-Based Managed Services Bandwagon

The rate of change in today’s IT landscape has made it challenging for SMBs to manage IT functions due to tighter budgets and fewer resources. This is pushing SMBs to compensate for their lack of in-house IT capabilities by hiring Managed Services Providers (MSPs) to provide 24*7 IT service and support.

Most MSPs today aim to serve two goals:

  1. To alert their clients about any risk before or when it happens.
  2. To address all the alerts they get.

This approach has resulted in a shift from the traditional “Break-Fix” mentality to a “Fix/Prevent” one where IT issues are addressed before management or employees are disrupted.

Is 2016 the year for Cloud-based MSPs?

The MSP world is changing fast and the latest evolution is the shift to Cloud. According to AMI’s Global Forecast Model, SMBs will spend US$96 Billion on managed services in 2016 growing to US$154 Billion by 2020. To capture this opportunity most MSPs are transitioning towards cloud and hybrid environments by offering services like Remote Monitoring and Management (RMM). This is a great approach as most SMBs have servers that need to be available 24*7 and these servers need round the clock monitoring and management. Apart from RMM, MSPs offer services such as Backup and Disaster Recovery, Help Desk Support and Daily Health Reports to SMBs as they lack in-house resources capable of detecting security flaws or tracking utilization.

In a recent survey conducted by AMI-Partners exploring MSPs’ transformation to Cloud, one MSP stated, “Our cloud business grew from 0 to $3M over the transformation process. It puts us in a good place that we are able to be a single stop shop for SMBs looking for a particular solution, and we can provide that.” MSPs in this study saw their year-on-year revenues grow by 20-30% as a result of this transformation. This raises a question: Will 2016 be the year for cloud-based managed services?

With the increasing popularity of cloud-based services such as XaaS (Everything as a Service), MSPs will be able to provide managed IaaS, SaaS, PaaS in addition to managing security and other services on-premise. Subsequently, cloud vendors like Microsoft, Amazon and IBM are helping MSPs through this transition by providing tools and services such as backup management, 24*7 support and infrastructure management to mention. These tools provide consistency and manageability across blended deployments and deliver improved service quality, and flexibility with hybrid cloud environments.

Security concerns and lack of knowledge is worrying for businesses

A recent AMI study showed that security is the most pressing concern with cloud adoption. One of the most effective ways for MSPs to alleviate this concern is to partner with major cloud providers like Amazon or Microsoft. These trustworthy brands provide benefits such as IP protection and make cloud adoption easier by providing materials such as resource libraries, sales & marketing training, and technical & business support to MSPs. The study also revealed that SMBs are not fully aware of the benefits of cloud. It is important to stress to SMBs that cloud is more secure, scalable and cost beneficial now than it has ever been before.  Moreover, MSPs must assess their customers’ needs and build a value proposition unique in their market.

In order to succeed and thrive in this changing landscape, MSPs need to address these concerns and misconceptions early. With the right strategies and partnerships, there are many opportunities for MSPs.

~Kunika Sodhi, Associate

The Transitioning SMB IT Landscape

The evolution by SMBs (small and medium businesses) to a services based IT consumption has long been apparent.  As the SMB IT environment continues to evolve and shift, we see IT vendors reacting by re-branding and refocusing their business strategies and approach. Vendors are recognizing that they must emphasize emerging areas of technology such as managed services, software as a service (SaaS), infrastructure as a service, virtualization, and mobility in order to win share within the SMB space. The following chart gives a good overview of this transition. Traditional computing devices are currently utilized by roughly 60% of worldwide SMBs; however, emerging technologies such as cloud and mobility are increasingly being adopted.

Continue reading “The Transitioning SMB IT Landscape”

BYOD and the India SMBs

Convenience or Chaos?  Is there a game plan in the near future?

Bring Your Own Device or BYOD is a policy that allows employees to bring their personal mobile computing devices to work places and connect them on the corporate network. Some of the many benefits of a BYOD program include: keeping employees happy as they enjoy a seamless experience with their devices, improving productivity by being available at all times for corporate tasks, and reducing costs of acquiring hardware by organizations. In fact, when I spoke of the seamless experience with BYOD, a CIO of a large manufacturing group in India, almost jumped up at the word – saying it will be the ‘mantra’ to push internally.

Continue reading “BYOD and the India SMBs”

BYOD and the Management of these Devices

Get connected, get secure – should become the new mantra for small and medium businesses (SMBs)

 New age technologies like mobile devices and cloud-based technologies have totally changed our lives and provided it with new impetus as well as a new degree of freedom. We use tablets, smartphones, or other mobile devices to access the web from anywhere and find any information! Hence – to achieve the same rhythm at the workplace, ‘new-breed’ employees are flooding their work environment with a gamut of mobile platforms and devices. Thus, a new phrase – “consumerization of IT” has come in vogue recently which implies the usage of consumer-based technologies (mobile devices and applications) at office. Hence, the thin line between ‘home’ and ‘office’ is getting increasingly blurred.

There are of course multiple advantages of this phenomenon in terms of enhancement of employee productivity and efficiency. However, it is also fraught with manifold risks, since most of these devices are not secured or managed at all. For information technology (IT) departments this is a major headache-area since infected personal devices, if connected, may affect and slow down the entire corporate network.

Continue reading “BYOD and the Management of these Devices”

Network Security Finds Acceptance Among SMBs in India

In a connected world, securing enterprise systems is a top priority. A fundamental concern for organizations worldwide is to protect their mission-critical applications, sensitive electronic data, and underlying computing infrastructure. It is a challenging and never-ending task—a space where IT (information technology) and security personnel will always have their hands full. Therefore, it is not only large enterprises, but also SMBs (small and medium businesses) that are scurrying for cover with robust security products. Traditional security solutions such as firewalls and antivirus are not the only products in demand. The fast-evolving information security market is leading the changing trends in the types of security solutions demanded. The newer ways in which IT is being consumed is in fact leading to changes in the security requirements of users as well.

Continue reading “Network Security Finds Acceptance Among SMBs in India”