By Angela Trillhaase
The simple act of managing a business is no longer a simple act for midsize companies. Faced with escalating infrastructure costs, high customer churn rates, declining ARPU and increased competition, these companies are in dire need of partners who can help alleviate the IT burden with technology solutions that not only keep their business running but also tap into new sources of growth and help generate new revenue streams.
Similarly, increasing pricing pressures are forcing telecommunications solution providers and their channel partners to become more technically savvy, embracing products with better margins, such as hosted solutions. As a result, many have begun adding managed services to their offerings, and broader partnerships between telecom agents and IT solutions providers have been on the rise.
Clients, often working with constrained IT budgets and limited internal IT expertise, are teaming more with managed service providers (MSPs) as trusted partners to help manage the complexity around IT, enabling them to focus on their core business.
Technologies such as cloud, analytics, security and collaboration are being delivered in a more simplified approach through MSPs. As companies look to benefit from low cost, pay-as-you-go IT, they are turning to MSPs to manage networks, run software applications, host services and, most importantly, ensure their customers’ services are never down.
Service providers who want to keep up with this shift are increasingly partnering with MSPs or moving to the MSP business model in an effort to forge tighter relationship with their customers. This new approach can offer service providers new revenue streams while giving their customers, who are dealing with flat IT budgets, more options.
Solution partners and agents alike who partner with an MSP or adopt the MSP model can help their customers by not only managing their infrastructure but also helping to devise ways they can use technology to differentiate themselves from their competition. New solutions can help to increase loyalty among customers through new communications channels and engagement methods. Using an MSP model, those who can make the transformation can also help their customers create new revenue streams by changing their existing business processes.
Additionally, those who evolve to an MSP model can find new sources of growth for their own business. MSPs with expertise in cloud-based services, for example, are moving beyond increasingly commoditized markets into new, more profitable services. According to a recent IDC report, public cloud services spending is expected to increase from $40 billion in 2012 to $100 billion annually by 2016. That’s a tremendous opportunity for service providers willing to make the shift.
As cloud becomes increasingly important for companies that want to drive efficiency, they are looking at MSPs to help them quickly implement cloud based services in a more simplistic, secure and economical way. The key to becoming successful in the MSP business requires creating the right value-added services customers need and having the operational capabilities to deliver them cost-effectively.
And, despite the negative impact the economic climate is having on many, MSPs are finding this environment favorable. As IT organizations downsize or are expected to do more with the same or less staff, they have no choice but to turn to third parties to help accomplish their requirements. MSPs can pick up new business keeping their customers’ basic business running as those companies opt to concentrate on their core competencies a winning combination for all.
Angela Trillhaase is a business development executive with
and founder of Women in Channels. She has been recognized as one of the “Most Powerful Women in the IT Channel” by CRN and is currently collaborating on Women in the Channel, another avenue to bring telecom and traditional IT closer together. She is also a member of the 2012-13 Channel Partners Advisory Board.
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