We had the privilege of participating in the MSP World Spring conference at the Walt Disney World Dolphin resort in Orlando, Florida. The atmosphere was exciting, the speakers top-notch, and the industry is not showing any signs of slowing down. However, things are changing within the service provider space and adaptable pioneers with expertise have now the window open for expansion. If you play your cards smart.

It’s a small players’ world

There are about 20000 players in the Managed Services field in the US. 80% of these service providers employ 5 people or less. 85% of them employ 10 or less. If you’re working for an MSP, chances are the founder was an awesome IT guy in your town, figured out a way to automate some of his tasks and decided he’s got time for other companies as well. After 2-3, he hired his high school buddy from the same field and slowly, the company started growing. The 5-10 person mark seems to be the dividing line.

When you want to grow out of the small player hole, it’s time for somebody to start being the manager, develop the processes, standardize the services and tools, and above all, start doing some selling! Instead of just a bunch of IT guys answering their phones at all hours, you need to figure out your core, productize your services, figure out your target market and start pushing. Trust me – those IT guys will love it too when their phones are no longer ringing at all hours of the day. And strangely enough, you might find your customers happier too when they know what to expect. And you’ll be happier working with the customers you actually want

From regional to vertical

One of the key things at MSP world was how the growing smaller players are starting to take advantage of the developing communications infrastructure. It’s all about starting to think vertically. The internet is very much a thing, and if you can find your niche, there’s no need to stay just in your town. When you understand your target market’s business, you’ll also understand how you can best support their business functions. This is where you create stickiness and unmatched differentiation, and chances are you can help companies with the exact same problems in the next town over, too. And in the next. All you need is the right concept, a bit of expertise in talking with the industry terms and you’re golden.

So focus on your narrative, and better yet, get those client testimonials and you’ll have people flocking over. No matter how brilliant your services are, if nobody’s talking about you, nobody knows. But once they start talking, thanks to the internet, the whole world will know.

Legislation and cloud are coming, be prepared

Five years ago, “what is it?” was the likely reply if you started talking cloud. These days, 80% of software sales are provided as a service from public, private or hybrid cloud. With an onpremise model, privacy and data security concerns are secondary. Your current contracts are likely based on telecom law turned into Service Level Agreements, and they most likely cover what to do in various problem situations and how what kind of actions in what timeframes you must do to keep the system running. What they don’t cover, though, is privacy.

With cloud, data security becomes much more of an issue. What happens if your customer data gets stolen? What happens if you get a subpoena and are forced to give up customer data? Can you handle HIPAA, FINRA regulation or PCI compliance? If you can, and can ensure compliance to your customers, too, you’re golden. Find the applicable vertical, start making sales calls and start printing money! In the EU, we just approved our revised data protection rules to be made into national laws no later than May 2018. There are already 47 US states with data breach disclosure laws, and as the EU is setting precedent, federal legislation is set to follow. At this moment, 60% of small businesses go under after six months of a data breach.

MSP cloud

What you need to do is to start making preparations. Get insurance. Put data breach disclosure articles in your contracts as well as liability limitations. Make this into the key to your success – study the legislation and become the virtual CIO for your customers, making sure best practices such as enforcing device passcodes and encryption are enabled. And we can of course help you with that, if you’re not already using Miradore Online for MDM, start now, and while you’re at it, check out our Management Suite for IT asset management as well. And one more boon about encryption: while most data breaches are caused by the user, if they lose a locked and encrypted device, it’s a loss of a device but under the state laws, NOT a privacy incident!

The market is growing

According to Gartner, 2016 will see a reduction of device spending from $653 billion in 2016 to $641 billion. Communications spending will go down from $1.472 trillion to $1.454. However, managed services and cloud computing is expected to grow from $912 billion to 940, and data centers from $170B to 175. The trend is clear, managed services and cloud are growing, and if you play your cards right, get your processes in order and use the right tools, now is a great time hop on your board and catch that wave!

Valtteri Kekki

Valtteri Kekki

CTO at Miradore Ltd
Valtteri Kekki is the CTO of Miradore. He has been with the company since 2011 and is also an experienced software developer. Valtteri holds an M.Sc. in computer science from Lappeenranta University of Technology.
Valtteri Kekki