In its September 2016 report, “Managed Services Market by Data Center (Hosting, Colocation, and Storage), Infrastructure (Print Services, Desktop, Inventory), Networking (Remote Monitoring, MPLS, VPNS), Information, Mobility, Communications, and Security – Global Forecast to 2021,” MarketsandMarkets predicted that the managed services market would grow from $145.33 billion in 2016 to $242.45 billion by 2021 at a 10.8 percent CAGR!
Is it any wonder that Managed Services Providers, or MSPs as they are commonly called, have been proliferating and the competition to differentiate oneself is heating up as well? And yet, as recently as 2014, only 3 in 10 organizations used an MSP for their IT needs, according to Carolyn April, Senior Director – Industry Analysis, at CompTIA. But that was then and this is now, as MSPs compete with each other to grab more and more of the IT pie. The standard MSP fare – customer relationship management (CRM) applications, backup and recovery services, email hosting, and network monitoring – are no longer attractive, financially and otherwise, as companies are increasingly able to pick these services easily off a menu of options through the ever expanding “…-as-a-Service” Cloud operators.
It is thus that a more recent June 2016 CompTIA report, “Fifth Annual Trends in Managed Services” found cloud computing, cited by 62 percent of companies, “topping the list of things that keep MSPs awake at night.”
Ms. April of CompTIA further noted in the above referenced press release announcing the availability of this report:
“Naturally occurring market commoditization accounts for a portion of slimming margins, but some of the blame also falls on MSPs themselves, many of whom continue to compete with one another solely on pricing.”
Thus it becomes incumbent on MSPs to differentiate themselves either through a focus on specific vertical markets or specializing in the premier “ABCD” of IT prowess – Advanced Application Monitoring, Business Intelligence, Cybersecurity, and Data Analytics.
But even if MSPs managed to differentiate themselves along these lines, there still remains the issue of driving sales with the perennial “Cloud” hanging over MSPs? Sonian, a pioneer in cloud-based email archiving, recently surveyed a wide range of MSPs and its founder and CTO, Greg Arnette, presented the survey findings in an online slideshow, “Top Managed Service Provider Trends and Challenges.” From among Sonian’s various conclusions, nearly 6 in 10 survey respondents agreed that finding go-to-market partners needs to be a primary area of focus for MSPs. This was borne out in another of its findings, which showed that more than 95 percent of MSPs believed that their partners provide adequate resources to help sell and support their products.
However, depending on partnerships is not the only key to success for MSPs. In a December 13, 2016 blog post, “Is Your Managed Services Business Running Into These 5 Problems?” Continuum’s Director of Technical Account Management, Ray Vrabel, stresses that MSPs should be marketing their business as well. Mr. Vrabel says:
“Marketing goes hand-in-hand with selling. Having a sales team with no marketing counterpart is like having wide receivers with no quarterback.”
The Marketing Id could not have stated it better. Mr. Vrabel recommends leveraging “inbound marketing techniques and channels to find and engage new prospects” and remembering, “networking is key.” In fact, The Marketing Id’s mantra of “Marketing the Right Content to the Right Entities at the Right Time using the Right Channels” needs to be adopted by MSPs as gospel. Because when it comes to communicating the benefits of managed services to end users, especially one’s competitive advantage in specific verticals or one’s unique selling points (USPs) in the aforementioned ABCD technical domain, MSP’s appear to be lacking adequate marketing skills to sufficiently engage their prospects.
Complex technological solutions require simple marketing explanations. From partner propositions that reassure internal IT departments of a need for their ongoing complementary role to the development of must-have USPs, and benefits and value messaging, MSPs must make this winning proposition to the end user:
MSPs are the optimum choice when it comes to offering holistic IT solutions, including Cloud transparency, where required.
And, for MSPs, marketing is clearly going to provide the tipping point towards capturing a bigger slice of that rapidly expanding managed services market!