Many resellers began to make the move towards the MSP model a number of years ago, embracing remote monitoring and device management, setting themselves apart from their competitors and enjoying the then-new idea of recurring revenues. However, as time has moved on, more firms have done the same, making differentiation more difficult. But new opportunities in the MSP space are emerging - with security, IoT and analytics making their mark on the model.
This subject is the basis of the CRN On event, happening in central London on 30 March, and sponsored by SolarWinds MSP.
Ahead of the gathering, CRN caught up with Dave Sobel, SolarWinds MSP's senior director of community and field marketing, who let us in on where he sees the MSP space at the moment.
What are your thoughts on where the MSP market is at the moment - are you confident in the opportunity it provides the channel?
I remain pretty bullish on the MSP market. The market data is good - the data is telling me there is continued profitability, and despite any apparent pressures they maybe be feeling, the data says MSP profitability is remaining the same. This is particularly [true] for those who are best in class who continue to maintain their high levels of profitability. Price pressures are internal, not external - if you're feeling price pressure, you are imposing it on yourself, rather than the market actually imposing that.
Many resellers moved into MSP a few years ago and so think the market is becoming a lot more mature now. Do you agree, and can you explain how you see the market having evolved over time?
In terms of the market itself, we've seen a level of stabilisation of the demographics of solution providers. The market has [developed] and has fewer people in the initial phases, and more people in that middle range of growing and developing their business. We've had a pretty consistent number of best-in-class solution providers for five or six years now. We're seeing guys who have started out really come into their growth period.
How are new technologies in general affecting the channel's MSP businesses?
One of the things we are seeing is those solution providers who are starting to think beyond the traditional devices - laptops and servers. These are the ones positioning themselves for this new technology. We've talked about cloud forever. Think about cloud and IoT and the trends that are coming - it breaks the strict device model. Those solution providers who have broken [the model] on its own are better positioned.
The Internet of Things is set to take the industry by storm, with many believing we are just on the brink of the kinds of opportunities it can provide the channel. Do you see this having any real impact on the MSP space?
For me, there are two major opportunities. The first is traditional device management. If you think about it from a device-management perspective, all these devices need to be managed, the security must be maintained, so there is that component. The other thing - which is overlooked a bit - is the idea of these solution providers as system builders. The devices themselves which can be monitored are not that particularly interesting, but what is interesting is building systems out of them; linking systems together. People immediately think of consumer examples of IoT, but there is a load of really interesting commercial ones too, such as production lines, healthcare, and manufacturing.
There are lots of areas where there is something interesting going on from an IoT perspective. Interestingly, we're finding that there are some players in that space, and it is pushing MSPs into new areas, and into new competitors. I was talking to an MSP the other day who helps the main office of an oil company. This oil company has off-shore rigs and, interestingly, the rig has devices which are remotely monitored and managed. That had a different solution provider, who didn't define themselves as an MSP, but effectively was. And the two of them ended up getting competitive as these two markets started coming together.
Security is possibly one of the hottest topics in the industry right now. How relevant an opportunity is this for MSPs?
We're seeing continued growth in the managed security market, and customers are becoming more aware of security and increasingly willing to invest. Frankly, they have it as a demand. It's an obvious place for managed services providers to deliver because you don't sell them an SKU, you sell them an ongoing service. So it fits really well with the managed services models. The ones which are successful are the ones embracing that.
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