MARKET REPORT Managed Service Providers
“It’s critical that VARs begin the transition to managed services if they wish to have a steady /
service and this is an easy one to
gure out. e more precious the
metal the more services the user
gets and the more the MSP can
charge.
e onus is on the MSP to
structure the service tiers that
o er their clients the best deals.
Many users nd the cheapest
deals are not good enough
and the most expensive not all
encompassing.
VALUE BASED:
Sometimes referred to as the ‘all
you can eat’ model as it provides
comprehensive services. In this
model the MSP becomes, in
essence, an outsourced IT and
Communications department for
the user. It requires the business
owner to have full con dence
in the MSP to be able to deliver
ongoing services as need and
circumstances change. is model
may include 24/7 coverage or for
certain days of the month only
where in the latter case additional
services outside of the agreed
times can be billed by the MSP.
A LA CARTE SERVICE:
In contrast to the value-based
model the
A La Carte
service
is where
the MSP
provides
recurring stream of revenue and thereby cash flow stability. ”
Edmund Cartwright, Director of Sales and Marketing at Highlight
service for discrete services that
address a speci c customers need.
A good example would be disaster
recovery and managed back-up.
Users can select from a number of
services to create their own bundle
or package of managed services.
WHY BECOME AN MSP?
As technology and the channel
evolve Value Added Resellers are
nding themselves sitting in a
rather hot seat.
With a major focus on
hardware, albeit cushioned by
vertical market software, other
specialisations and installation
and set-up fees, VARs can be easy
pickings for large vendors looking
to expand their direct sales. Along
with hardware price pressure
the rise of cloud based solution
delivery compounds the problem.
A huge swath of IT computing
has and is moving from onpremises
to the cloud. Ironically
this move is being made despite
the fact that the price of onpremises
kit has been plummeting
for years. But those prices aren’t
the issue. It costs far more to
manage hardware than it does to
buy it.
With the cloud, much of that
burden is lifted. And that leaves
hardware-centric VARs in the
lurch.
Many observers say that it is
time to stop holding on to the
past.D
ublin based Pulseway puts it
succinctly when they say, ‘Times
are a changing. e way forward
isn’t just the vast expanse of the
cloud, but o ering services that
meet IT demands with precision
and utterly lift the burden of
dealing with minutia. at way
forward is managed services.’
Pulseway adds, ‘VARs don’t
have to shift their entire business
model to managed services. e
trick is the blend the best of the
current value added reselling with
what ts your business and goals
as far as managed services.
e beauty is if you migrate
from a VAR to an MSP, you’ll
make more money from
managing what you or others
helped install. is could include
hundreds of end points, the
internal network and the WAN.
And since you are deeply trusted,
you’ll be the one to move this
infrastructure forward.’
Why should resellers and
VARs consider adopting
an MSP model.
Mark Curtis-Wood,
Head of Network
Services at Nimans, says
it’s a win-win situation
for everybody really.
“Customers are
bene tting from lower
CAPEX, lower OPEX
in many cases as well
as better SLA’s. Also,
resellers are gaining
additional recurring
revenue. ere’s a
margin-stack being
built up which drives
pro ts. Inevitably by
selling more products to
more customers builds
loyalty and stickiness and
develops wallet share.
From a vendor’s point
of view, it enables them to
protect their own brand
Edmund Cartwright, Highlight
because especially with cloud
services if you take Microsoft
for example they are still able to
sell a Microsoft branded service
through a managed service
provider.”
Edmund Cartwright, Director
of Sales and Marketing at Surrey
based Highlight, a company that
provides network and application
monitoring to MSPs, says VARs
are among some of the key
players in the channel facing
erce competition and thin pro t
margins.
“For a long time, adding value
to hardware and software has
been a big money-maker but the
business is no longer the same and
the competitive landscape is more
saturated than ever before.
It’s critical that VARs begin
the transition to managed services
if they wish to have a steady
/ recurring stream of revenue
and thereby cash ow stability.
Having a diverse portfolio and a
closer, proactive relationship with
customers is key to staying in the
game and thriving.
How important is it for MSPs
to bundle services for their clients?
Mark Curtis-Wood at
Nimans believes it is critical to
bundle services because the whole
concept of being an MSP is to
drive economies of scale.
“ at allows SME’s more than
anyone else to access services they
wouldn’t normally be able to do.
ese would normally require
investment, resources and
training such as when selling
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30 | Comms Business Magazine | January 2019 www.commsbusiness.co.uk
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