Have we seen the end of the ‘true’ MSP?

Over the last three decades, the managed services model has experienced significant transformational change and growth.

No longer limited to undertaking reactive break-fix tasks or troubleshooting network issues, today’s managed service providers (MSPs) offer a huge breadth of IT solutions. This includes everything from cloud hosting, infrastructure management, and cybersecurity, through to data backup and recovery.

Responsible for helping SMBs and enterprises enable the dynamic digital ecosystems needed to support fast-changing business needs, the sector has undergone rapid expansion. In the UK alone, over 11,000 MSPs now provide an extensive range of service capabilities. Meanwhile, the value of the global MSP market is projected to hit $373 billion by 2028.

But in the face of such rapid evolution and expansion, has the ‘true’ MSP ceased to exist? And what will it take to thrive and survive in an increasingly competitive MSP market?

What qualities define a true MSP?

Terms such as ‘business partner’ and ‘trusted advisor’ are frequently applied to channel companies. While some MSPs specialize in vertical markets, and others are focused on specific technology domains, being a true MSP partner goes beyond simply acting as a services supermarket.

In today’s ever-evolving technological landscape, MSPs are often at the forefront of helping organizations leverage the latest innovations and advancements in the most effective manner possible. They are also responsible for elevating IT operational efficiency and ensuring that an enterprise’s business-critical IT operations stay robust and agile.

But the MSP’s true value proposition goes beyond this. More than just a service provider, the MSP’s role features several strategic aspects. For example, helping IT and business leaders architect the transformation, enable enhanced operational resilience and competitive differentiation, and continually respond to the evolving needs of a variety of stakeholders.

To do all this, MSPs need to offer leadership insights, technological expertise, and demonstrate the ROI of potential upcoming technological investments. All of this depends on maintaining a strong client-centric approach to gain a deep understanding of client needs and signpost what their operational future could look like.

In other words, being a true MSP demands intelligence, skills, agility, and a laser-like customer-focused mentality. But that’s not all.

Navigating the future

The ability to continually innovate and renew in the face of fast-paced technological change has been a key factor driving the success of the MSP sector.

Alongside tapping into the growth in demand for cybersecurity technologies and services, many MSPs are currently engaged in helping organizations to move their workloads away from public cloud providers. 

With a recent IDC survey revealing that 70% of firms plan to undertake full or partial repatriation, this trend presents a significant opportunity to provide strategic advice, execution expertise, and infrastructure alternatives. In parallel, with global public cloud spending forecasted to grow 20% in 2024, MSPs are also enabling and optimizing public cloud solutions.

Other growth opportunities include providing guidance and service provision in relation to remote and hybrid working, as well as the growth of IoT networks, services and connected devices. Meanwhile, AI in all its forms promises to be a significant growth driver in the years to come.

In addition, under pressure to control costs and surmount an ongoing skills shortage, IT leaders are increasingly looking to the managed service model to bridge the divide and initiate tech-led change. So, what will MSPs need to do to ensure they can capitalize on this opportunity?

Evolve, adapt, and prepare

Moving forward, MSPs will find themselves under significant pressure to meet and exceed customer expectations.

While new technologies like AI will help propel customer acquisition and growth, MSPs should ensure they prepare appropriately for the challenges ahead. For many, this means evaluating how best to balance the competing demands of continual innovation with the need to refine their operations and maximize customer retention. To achieve this, MSPs will need to consider:

• How they plan to deal with the tech talent shortage – this will be critical for launching new services, scaling existing services, and meeting increased demand from existing clients.
• How they will educate and augment existing workforce skills to handle tech trends on the horizon.
• Initiating AI-powered tools and services to enhance capacity, productivity, and improve customer collaboration capabilities.
• Automate and future-proof their operational environments.
• Adapting services and capabilities in line with changing client needs.
• Maintaining a grip on regulatory changes and evolving ESG priorities, so they can appropriately guide and advise clients in an informed and expert way.

In the years ahead, capturing market growth and retaining the trust of customers will depend on providing the expertise these customers need to achieve their digital ambitions without undue cost or risk.

Those MSPs that can juggle competing priorities to pioneer new – and integrated – capabilities while refining their existing core competencies will be best placed to future-proof the customer experience and maintain their position as a valued and trusted business partner.