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

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”

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”

Samsung Galaxy S8: Removing Barriers

Some weeks at AMI are spent entirely in the office. We go about our business and interact with the outside world via conference calls, web meetings, and sometimes people even drop in to see us. Other weeks see AMI-ers out in the field, like when we traveled to hear from IBM in Las Vegas. This week presented a great opportunity to learn about the connected world a bit closer to home. Samsung launched its new flagship smartphones, the S8 and S8+, in addition to showcasing other devices, during UNPACKED2017, at Lincoln Center in NYC. The SMB space is always on the lookout for the latest tech, so let’s take a closer look.

Sharing Experiences

Samsung needed to deliver something special after the Note 7 battery issue and other setbacks last year. Leaving UNPACKED, where your intrepid blogger was asked to pose for a few pictures while holding a Galaxy branded bag (seriously, this happened), it appears Samsung is Continue reading “Samsung Galaxy S8: Removing Barriers”

Payroll Software-as-a-Service

We all like to be compensated for our work. Whether it be the new normal of direct deposit, the antiquated live check, or the somewhat controversial pay card (No one is [legally] paid in cash anymore, are they?), payday is a date we circle on the calendar. Companies have the option of outsourcing payroll or keeping it in house. Software can be on-premise or subscribed to as a service. AMI’s research shows the SaaS option is growing but on-premise solutions are still used in most SMBs. Let’s take a look at the SaaS option and see if the cloud makes sense for payroll in the SMB space.

SaaS is Sassy 

According to AMI’s Global Forecast Model, SMB spending in the US on Payroll software-as-a-service will have a CAGR of 13% through 2020. While double digit growth is nothing to dismiss lightly, other SaaS categories are approaching a 30% CAGR over the same time span. Overall, SMB SaaS spending in the US will have Continue reading “Payroll Software-as-a-Service”

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”

Pepcom Digital Focus Event: April 9, 2015

My AMI-Partners colleagues and I enjoyed attending Pepcom’s Digital Focus Thursday night at New York City’s Metropolitan Pavilion. These events are great opportunities to have a front row seat to the latest and greatest happenings in business and consumer technology. On the business side, Pepcom consistently has a strong showing of PC and Storage solutions. In making the rounds to take a look at the new product lines and models, it’s always impressive to see how rapidly the hardware specs, compatibility, and cost efficiencies improve each year.

In AMI’s annual tracking of global small and medium businesses (SMBs), we see a strong desire among SMBs to integrate hybrid on-premise and cloud IT infrastructure to support their sites and remote workers. We’re also finding that business IT purchase decision makers are looking to increasingly chose vendors who can offer end-to-end solutions, turn-key products, robust service and support, and easy end-user management platforms. At Pepcom’s Digital Focus, two vendors stood out as having showcased strong hardware offerings while integrating the type of end-to-end and cloud-based services that business users are looking for: Western Digital and Lenovo.
Continue reading “Pepcom Digital Focus Event: April 9, 2015”

Notable Q4 2013 Acquisitions by Major Tech Vendors

An acquisition can be a way for a large conglomerate to achieve growth albeit inorganic growth if, of course, it’s the RIGHT acquisition. Growth might occur as a result of the successful addition of an entirely new product/capability to a current set of offerings or through the addition of a complimentary product/capability that will improve an existing offering. The extent to which either of these examples contributes to top-line revenue growth or increased market share amongst other factors determines the success of the acquisition.

The technology industry is a hot-bed of activity for acquisitions. Below I detail a few large publicly traded tech companies, their recent acquisitions (Q4 2013), and how they fit into their overall strategy from an industry analyst’s perspective. The primary focus will be how they are catering to the enterprise market segment through the acquisition.

It’s no surprise that mobility related acquisitions are quite popular. Aside from mobility, virtualization, SaaS, and IaaS are also areas of interest by vendors.

I’ve categorized recent acquisitions by type: Product/Service, Talent, or End User Segment.

Product/Service Focus

This type of acquisition is related to new product/service offerings to be marketed and, in some cases, integrated with current offerings.

  • IBM, had a recent acquisition of Fiberlink Communications which provides cloud Mobile Device Management (MDM) software, is making solid inroads into high growth mobile technology areas. This announcement comes only a couple of months after acquiring Trusteer, an anti-malware solution provider targeted to financial services institutions, proving that end-point security (regardless of client, but with emphasis on mobile devices) is a top-of-mind focus for the corporation. Additionally, IBM also recently acquired Worklight, a mobile application development solution provider, and Xtify, a mobile messaging/marketing tool. With the proliferation of BYOD (bring-your-own-device) and heavy usage of mobile devices for business purposes in the enterprise, mobile management is in demand and vendors are answering the call.
  • Given the relative insignificance of Microsoft’s share of mobile OS in the enterprise space, Microsoft is looking to benefit from synergies through the acquisition of Nokia Devices and Services. This takes the partnership between Microsoft and Nokia that dates back to 2011 to a whole new level. Given Nokia’s presence in emerging markets, its status as a major device company, and still relatively sizeable share in the global handset market (compared to Google’s Motorola prior to that acquisition), such an acquisition might just improve the odds that their mobile business stays on the map and relevant.
  • VMWare, an already dominant player in the virtualization market, just last month disclosed the acquisition of Desktone, a leading Desktop-as-as-Service (DaaS) provider. Given VMWare’s niche focus in high growth virtualization solutions, this acquisition comes as no surprise and provides support for the conclusion that VMWare is looking to further entrench itself in providing virtualization as a best-in-class provider.
  • Oracle continues to embrace cloud applications by adding two SaaS offerings to its product portfolio. These two recent SaaS acquisitions: Big Machines, which provides cloud CPQ (configure, price, quote) and Compendium, which offers content marketing, will be added to a robust set of software offerings. CPQ software which encourages sales effectiveness by proposing optimal product-price combinations is now on the map as one of the highest growth SaaS areas. With the Compendium acquisition, Oracle is further establishing itself as a best of breed CRM provider via incorporating a key marketing capability, content marketing, into their products. This capability is to a degree under the CRM umbrella and is helping position Oracle to better compete against other CRM vendors offering similar capabilities.

Talent Focus

This type of acquisition is related to human capital with very specific skills to address the business needs of the acquirer.

  • With the most recent of a string of talent acquisitions by Intuit, Level Up Analytics,  a top-notch analytics focused consulting group, Intuit is a step closer to fully and effectively harnessing ‘Big Data’ aggregated from its business customer base.  This appears to be closely aligned with Intuit’s Connected Services plan comprised of three primary goals one of which being to amass the collective data flowing through the Intuit eco-system. This data will be used to strengthen existing business customer relationships via targeted marketing and decision making assistance, such as benchmarking, but will also provide solid business intelligence for internal use to improve sales, operations, and marketing plans.

End User Segment Focus

This type of acquisition is related to new product/service offerings that are targeted to a specific end user segment.

  • NetSuite, which has traditionally been defined as a cloud ERP provider, but which also offers cloud CRM, E-commerce/POS, and HCM, maintains a solid yet small mid-market customer base, but has yet to effectively capture SMB customers. The company aims to do just that with its recent acquisition of TribeHR, an SMB targeted HCM solution, announced in October. NetSuite plans to introduce its first SMB focused, integrated ERP and HCM solution to market to attract SMB customers in the near future.

 -Autumn Watters, Associate

Transform, Connect, Inform, & Protect – 4 Mantras That Will Drive End User Computing in India

Transform, Connect, Inform, & Protect – These four words were the underlying theme in every presentation made at a recent Dell Analyst event held in Bangalore on September 26-27th, 2013. I personally found them very relevant and easy to connect with–especially in the context of mobility and BYOD (bring-your-own-device).

Making a case in point as to why the end-user computing business matters, P. Krishnakumar, Executive Director & GM – Consumer & Small Business likened the end computing devices  to the humble ‘bread’ in a sandwich – reiterating that you cannot get a great sandwich if the bread is not right. In fact, I feel, forget bread – we do not want bread anymore in new end-user computing devices, we are getting cake as Marie Antoinette herself would have desired, isn’t it?!

Continue reading “Transform, Connect, Inform, & Protect – 4 Mantras That Will Drive End User Computing in India”