“Nothing is as permanent as change.” This we have known since Heraclitus’ day. Of course, he could not have had the slightest notion of modern IT when he coined this saying 2,500 years ago. But the sector still enjoys quoting him regularly. For example, when it comes to talking about managed service providers (MSP). For they are just getting ready to be hailed as the new game changers. And this is a real opportunity for many system houses.
Remote Working is no longer an emergency solution but a critical success factor
Let’s just first take a quick look at world events. What business megaships took on board long ago, the SME fleet can no longer avoid so pluckily. Even small companies have to deal with IT. The coronavirus pandemic has dramatically emphasized this requirement – remote working is no longer an emergency solution, but rather a critical success factor. Entire business processes had to be digitalized almost overnight, and not even the pizzeria on the corner can survive in good health without a computer and the Internet. But the online world is not a cozy place. Ransomware and cybercrime are very real dangers, technologies are growing ever more complex, and evolution proceeds apace. Skilled IT staff are few and far between, so they are hard to get hold of.
Given this background, the age of managed services has dawned. Because small and medium-sized enterprises increasingly need to upgrade their IT, but they are rarely able to buy the necessary systems themselves and then maintain them into the bargain. So the obvious solution is to outsource. The same principle as with large volumes of data that are sent to the cloud. You really do not need to be a prophet to see the enormous potential in this market. In the Germany-Austria-Switzerland region alone, the value of traditional managed services contracts was 1.4 billion euros in the first six months of 2020.
First-Class IT Solutions become affordable for smes
Of course, this is a terrific opportunity for startups, but even more so for existing system houses who have previously earned their crust as traditional resellers. Now they can evolve and become service providers, even specializing in particular segments. The benefit is plain to see – it makes top-class IT solutions affordable for SMEs, while the MSPs generate continuous, reliable revenues with genuine opportunities to further upsell.
In every respect, the figures point towards growth. Despite the coronavirus pandemic, 84 percent of respondents told the latest Datto study, “Global State of the MSP” (June 2020), that they were certain that this is a good time to operate as an MSP in the market. Over half of their customers are recruited from medium-sized businesses (with up to 150 employees), but what is amazing is the huge potential that lies in small and tiny companies – a good 89 percent of those questioned see their future business there. And, in turn, this will generate enormous benefits for society as a whole. Because most MSPs have technologies in their portfolio that are aimed at securing stable value and a successful digital transformation, which makes them vital on the journey towards a new, post-Covid-19 economy and normality. As the universal connector between customers and manufacturers, this also makes them the crucial factor in enhanced innovative capacity, conclude Datto. You just need to think of artificial intelligence or the Internet of Things, and new revenue streams begin to open up. Heraclitus would be delighted.
Here at Deskcenter we, too, are of course very excited by these prospects, and we have already aligned ourselves and our products with the service provider channel.