The rise of the MSP 2.0 - part two

PRESENTED BY AVG: We catch up with some of the UK's top players to find out what a successful MSP might look like in five years' time

Many channel players have successfully completed the journey from reseller to MSP 1.0.

But just like the box-shifting model they left behind, the managed services space is beginning to look a little crowded, at least for those just offering remote management and monitoring to a standard SLA.

It is now possible to set up as an MSP almost overnight, supporting the emergence of me-too players and driving down margins.

But the smarter MSP 1.0s spotted this trend early and have responded, reinventing themselves as MSP 2.0s, as we examined in part one of this feature.

Some are morphing into "virtual CIOs", while others are moving from an emphasis on standard to custom SLAs. Still others have begun to position themselves as aggregators that can knit together on-premise, hosted and public cloud services into a single wrap for the customer.

Whatever their bent, the common theme is an ability to help clients achieve their business goals, rather than merely offering a reliable service.

But the rise of cloud and new technologies such as predictive monitoring, along with end users' desire to collapse their supply chains, will force further changes in the MSP model over the next five years, according to top players we spoke to.

In the first part of this feature, we examined what an MSP 2.0 looks like. In the second part, we ask what some of the features that define an MSP 3.0 may be.

A widening remit

One prediction that came up again and again was that the remit of MSPs is likely to widen as end users look to collapse their supply chains and buy a wider range of ICT, and even facilities management services, from one source. Those offering just standard IT services risk losing out.

Paul Tomlinson, managing director of Mirus IT, said his firm is increasingly being expected to provide voice, mobile and business continuity services alongside its standard IT managed services.

"Less mature MSPs are not making the most of those opportunities," he said.

"Over the next five years, more people will realise that to survive and grow as an MSP, they need to consider offering those services."

Rob Bardwell, managing director of Pinacl, also foresees MSPs adding more strings to their bow.

"For us, it's the ability to broaden what we're actually managing," he said.

"We're traditionally very infrastructure biased: networking, cabling etc. More and more, we're getting pulled beyond even desktop, server and cloud and into what is pretty close to facilities management.

"Fifty to 60 per cent of our business is local authority-type business and they are bracing themselves for the latest round of savings. We think they will push more and more to that 'can I get one-plus-one-equals-three mentality?', by combining facilities management contracts, including ICT."

Predictive monitoring

Meanwhile, John Pepper, managing director of Managed 24/7, tipped predictive monitoring as a buzzphrase that will take the MSP world by storm in the coming years.

"Predictive monitoring is almost MSP 3.0," he said. "You had MSP 1.0, which was reactive monitoring, where you'd get a call from a customer to say something had gone down. Version 2.0 was proactive, where you could see it had gone down on a board, but only if an engineer was looking at that particular time. Version 3.0 says we will actually spot that it's going to go down six months before it happens."

He added: "Predictive analytics is being talked about a lot in the NHS, in terms of looking at things such as patient health and predicting if someone is going to be ill before they're ill. And I think the MSPs that are going to do well will be those that work with their clients to say 'in a year's time, that server will potentially cause this issue'."

Change or die out

Neil Cross, managing director of Advanced 365, said forward-thinking MSPs must brace themselves for radical changes in the IT services industry over the next decade, predicting that services will in the future be consumed like electricity.

"At some point, the role of the service provider as we know it today will once again evolve dramatically," he said. "Everything will become so straightforward and API driven that you will head to a market where you buy your services from a company and have the equivalent of a uSwitch. I recently changed my gas supplier and I didn't notice I'd done it, and that's ultimately where IT provision - or at least public cloud-based IT provision - will go.

"So MSPs will have to reinvent themselves again. There are a lot of differentiators we are bringing to the market in joining [cloud, hosted and on-premises] services together with a single billing point. But those differentiators will begin to disappear."

Cross concluded: "Those MSP that constantly reinvent themselves over the next five years and beyond will survive; those that don't won't be around."

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This article was commissioned by AVG