By Darrin Swan, Director, Global Sales and Business Development, Dell Service Provider Program
Trying to survive on product margins has been a losing proposition for years, but an equally poor business choice is to offer just a portion of the key IT services that customers require. Comprehensive services are the lifeblood of your business, and MSPs have a prime opportunity to differentiate themselves and expand business by taking a holistic approach. The secret to service success is the same as the channel's long-proven value proposition: becoming your customers' trusted IT partner and focusing on their overarching business priorities, not only their technology needs. That's an ongoing challenge for MSPs, especially when it comes to small and medium businesses.
SMBs have two primary IT workload requirements -- applications and infrastructure. First and foremost is access to, and use of, their business critical applications. They want reliable access to those applications, anytime, anywhere and on any securely managed device. The second workload requirement is the need to maintain, secure and protect critical office infrastructure components. These can include the physical and virtual infrastructure environment, i.e. network, computing devices, firewall, and data. When MSPs fully address these needs by providing the reliable application access SMBs require, and diminish or eliminate the need for in-house IT, they set themselves apart from their competition and enable customers success.
The potential for enabling your customers to outsource their IT to you through remotely managed services are huge and growing. Gartner estimates that global spending on public cloud services will almost double from 2013 to 2017, reaching $244B in 2017, led by Cloud System Infrastructure Services. It’s growing at over 37 percent compound annual growth rate (CAGR).
According to a survey from cloud services platform provider Parallels, SMB use of Software-as-a-Service (SaaS) increased by 60 percent last year. That survey also found that nearly 70 percent of SMBs said they prefer to purchase cloud solutions as part of bundled services, primarily messaging, collaboration, communication, backup and recovery and SaaS-based applications.
The market opportunity is further emphasized by IDC’s findings that companies with less than 100 employees will spend over $207 billion on IT this year, and are expected to spend more than $256 billion in 2017. However, because of resource constraints, SMBs value support even more than low prices. Gartner states that for SMBs “service and support are critical selection criteria when evaluating new IT solutions and can also be the top reasons for switching to another IT provider.”
SMBs don’t want to worry about how the technology works; they just want business value at a cost effective and predictable monthly rate. Clearly there is a problem to be solved here, and this makes it the perfect time for MSPs to differentiate themselves and gain competitive edge.
The right MSP will address SMBs most pressing IT issues: cost, complexity, reliability, performance, scalability and security. Buying ITaaS also allows SMBs to pay by the month, moving IT from a predominantly capital expense to a fixed operating expense. Further, SMB customers won’t need technical experts to deal with problems if and when they occur, because they have support from their MSP.
While complexity, cost and flexibility are major drivers for SMBs adopting ITaaS, technical competence is just the minimum for winning their business. According to an SMB Group study, SMBs want partners that understand their business, can provide expert counsel, and recommend cost-effective solutions. This means solution providers need to invest in the differentiated service delivery capabilities, expertise and processes necessary to transform their businesses and fully meet customer needs. Additionally, they need to find partners to fill in gaps in their own portfolio to provide their customers with more complete solutions.
As a customers' trusted partner, MSPs need a comprehensive approach to address cloud-based and remotely managed IT service needs. They have to be able to address any and all of their IT needs – a fully-baked, all inclusive IT package – and provide them when and how customers want them. MSPs also need to support onboarding and management of customers as they move to a utility model, with recurring revenues.
SMBs don’t need a menu of standalone solutions. MSPs should be looking to provide a pre-packaged, customized and scalable portfolio of cloud-based and remotely managed services in a simple IT approach, including necessary technical support, at the lowest possible cost per user per month. By following this formula, picking the right partners, and being customers' trusted IT providers, MSPs can ensure a long and profitable future.