Strategy & Best Practices

Going Beyond Microsoft: Standing Out in the Growing MSP Crowd

By Ideas @ AppDirect / June 22, 2018

The managed services sector is booming. Last year, research firm MarketsandMarkets pegged the size of the global managed services market at $152.45 billion, a number that the firm predicts will reach $257.84 billion by 2022. While it’s difficult to estimate how many managed service providers (MSPs) there are worldwide, MSPAlliance—an MSP industry group founded in 2000—has 30,000 members and counting.

A growing market means more potential revenue for MSPs, but it also means that the market is becoming more crowded as new entrants look to claim their piece of the expanding opportunity pie. It’s a point that Howard M. Cohen, contributing editor of Redmond Channel Partner Magazine, drove home during a recent RCP webinar: “The reality is that everybody is becoming an MSP, to the point where the acronym ‘MSP’ is as blurred as ‘cloud’ was when it first came out.”

Define What You Do

As the number of MSPs grows, every business in the sector faces increasing pressure to define what they do, and more importantly, why their practice is different from all of the others. “Today you're a managed service provider, which doesn't say a lot about what you do,” Cohen said. “You can't stay an ‘MSP’ forever.”

“Today you're a managed service provider, which doesn't say a lot about what you do.”

The key to setting your MSP apart is to offer intellectual property that is uniquely your own. However, as Cohen pointed out, IP doesn’t have to mean applications. “You need IP but it doesn't necessarily mean you have to have a fully baked application ready to go,” he said. “There are a lot of ways to develop IP as a partner.”

One approach that Cohen has seen deliver results is onboarding specialization. “A lot of MSPs are making unbelievable money by focusing on the process of onboarding. How do I get my users to switch to a fully cloud‑enabled environment? How can I get them to take advantage of the new capabilities they have? How can I make sure they're supported so that they don't say, ‘Oh, this is terrible,’ on the first day? This form of IP is available to even the smallest MSP practices.”

Become an Expert

Another strategy is to focus on cloud integration. “Become an expert at making all of these different cloud solutions from all these different vendors and sources play well together,” Cohen said. “They all have their own security protocol, they all have their own performance protocols. Customers need help figuring out how to put that all together.”

Despite his focus on other strategies, Cohen believes that there is always a strong market for custom-built applications. “A lot of customers don't have anybody on staff who should be building applications,” he said. “They don't want to budget for it, so they can save a lot of money engaging an MSP to build those applications.”

Solve What Customers Can't or Won't

Whatever approach is right for your MSP, the key to effective differentiation is understanding your strengths and thinking creatively about how to solve customer problems. “At the end of the day, the trick is figuring out the things that a customer wouldn't do themselves and doing those things,” Cohen said. “That intuition, that innovation, that kind of smarts is going to make the difference between the survivor and the non-survivor in the coming years.”

“At the end of the day, the trick is figuring out the things that a customer wouldn't do themselves and doing those things.”

This is the first post in our “Going Beyond Microsoft” series, three blog posts that detail strategies MSPs can use to drive business in addition to (or instead of) reselling Microsoft cloud products. Next week, we’ll take a closer look at another critical part of differentiation: creating specialized offerings to serve specific verticals. Until then, you can download our recent white paper “The Future of The MSP Market: Can Existing MSPs Make Money in the Cloud?”

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