Bosses from Ultima, Mirus IT and OryxAlign discuss how to beat the margin crunch in this SolarWinds MSP-sponsored CRN roundtable
Wannacry was branded "the best advertising campaign for MSPs for a decade", as top MSPs came together in a CRN filmed roundtable to discuss how to boost margins in the face of intensifying price pressure.
The managed services market is facing its first major test as the price per seat MSPs can charge for their core services starts to fall.
The live filmed roundtable, in association with SolarWinds MSP, saw MSPs discuss how they are reacting to this by adding higher-value services to their repertoire. This was with particular recourse to three sectors: back-up and disaster recovery; cyber-security; and the internet of things (IoT).
The panel comprised three MSP bosses in the form of Ultima CEO Scott Dodds, Paul Tomlinson from Mirus IT and Carl Henriksen from OryxAlign, as well as Dave Sobel, a channel executive from roundtable sponsor SolarWinds MSP. Based on a series of articles that appeared on CRN earlier this year (which can be viewed here, here and here), the roundtable is now available to view on demand here.
Sobel described May's Wannacry attack as "probably the best piece of marketing advertisement for an MSP in the last decade" as the panellists talked through the opportunities for MSPs in the cyber-security space.
"The number of MSPs that were able to stand up after Wannacry and say ‘nope, we weren't affected' - those MSPs should be proud. That's the value they are delivering," he said.
MSPs 'must walk carefully in IoT'
With Gartner estimating there will be 8.4 billion connected things in use globally this year - a figure that dwarfs the global PC install base - IoT is being touted as an unrivalled opportunity for MSPs.
Dodds agreed, but said that IoT poses challenges for MSPs around both scale and security.
"It's definitely huge, but we're all scrabbling around working out where to aim," he said.
"You can't manually do millions of different inputs and sensor alerts all the time, so you have to be able to automate that, manage it, and provide a service on the back of it.
"We're seeing a lot of customers thinking about [IoT]… Right now, they are all relatively small pilot activities. Security is a huge issue with IoT: most of the devices and sensors have virtually no sort of security play on them whatsoever, so that wraps into our infrastructure management. There's no doubt it's a massive opportunity. I think everyone has to walk carefully in this space, because it's very easy to get tripped up, but I think it's a natural extension of what we do; it's just a scale issue - and that's a systems and automation piece on top of what we already do."
Five per cent price fall
Commodisiation of the MSP market was also a prominent topic for the panellists. Tomlinson said that Mirus IT has had to become more efficient because price pressure has forced it to drop the price it charges per seat by five per cent over the last four years.
"That's benefited us as an organisation and also the customer. We've focused on reducing the number of tickets we are having to process for customers by being more proactive," he said. "But we are absolutely seeing a push to reduce the price and a lot of that comes from the fact there are a lot of new players in the market; it is very easy to be an MSP now."
Henriksen agreed: "There are more players round the table now," he said. "It's a case of trying to differentiate yourself, but not so much that you become the odd one out. So we tend to hold the line in terms of pricing and say ‘we're delivering a critical business-value service, and that does come at a cost'."