Managed Service Providers should change their business model. According to Gartner, the largest segment of the cloud market is Software as a Service (SaaS). The market has been growing for years and keeps increasing. As Managed Service Providers manage applications in their data centre, the rise of SaaS forces them to adapt their offering. Because what happens to you when all the applications are in the cloud? To boost our partners, I would like to share five steps for MSPs to stay in business and to become Modern Service Providers.
1. Software margins decline for MSPs
If you are looking for a CRM system, collaboration tool or other business software you will notice that the prices are out in the open. It’s getting easier for companies to quickly buy and set up new SaaS-applications. Software vendors, like Microsoft, post their prices publicly to allow businesses to assess their tools.
For MSPs this brings a challenge as they can’t set a high margin on the licences, forcing them to create value in a different way. According to a study by Appdirect, MSPs should bundle solutions to increase their margin and deliver steady solutions.
Tip: With Workspace 365 you can create your own propositions incorporating both software, services and even hardware. By creating bundles, you can increase your margin allowing you to invest in the transition to become a Modern Service Provider. And this simplifies work for your customers and their employees.
2. SaaS companies are looking for Modern Service Providers and true partnerships
As the number of SaaS applications rises at an amazing speed, it does bring a paradox of choice. And, just like any human being, people who work for an organisation can experience anxiety while selecting the right application for their business. That is why companies are turning to Modern Service Providers to help them eliminate choices.
According to Network World more SaaS companies will work with MSPs in the coming years as 70% of SaaS revenue comes from the channel.
Tip: In 2018 we launched our Partner Boost Program to support MSPs in maximizing the value of their workspace and the underlying technologies and services related to it.
3. Do you really support the move to the cloud?
Customers should be aware what is in their best interest, and as the cloud has matured they are becoming more aware. They know it’s time to move their applications and documents to the cloud. The next step? Their workspace. More companies are using Chromebooks which uses the browser to empower users, and rumour has it that Microsoft is also working on a full-browser device.
So, how long can MSPs retain their customers if they don’t have to manage their workspaces? Study the average customer lifetime value (CLV) and ask yourself if you can still delay offering them a browser-based workspace which adapts to the underlying technologies in order to prevent churn.
Tip: Workspace 365 is an adaptive workspace that aims to simplify work. It integrates any technology allowing you to use it as a bridge between the company’s current technologies (think of file servers, hosted Exchange, Citrix virtual apps, remote desktops and more) and new technologies (e.g. Office 365, SaaS apps and more). By bringing it all in one workspace you can change the underlying technology without being dependent on one software vendor.
4. MSPs can offer security to support the rise of BYOD and work anywhere
As SaaS applications are easily accessible and companies allow people to use their own devices, it’s important for MSPs to make (enterprise) leaders aware of the security risks. This will help to create a safer digital environment for both customers and employees, and it will give an opportunity for the Modern Service Provider to provide extra value.
By becoming experts in cloud security, you will be able to train business leaders and their employees. Next to this, it will allow you, as an MSP, to offer and set up additional security tools for your customers.
Tip: In Workspace 365 we allow you to integrate multiple SSO tools, next to Azure, we have our own tool which allows you to bring SSO to any device. By delivering apps based on roles and conditional access in Workspace 365, you can limit the use of applications or documents depending on a users’ conditions, creating a secure workspace.
5. Become an integrator to maintain the management of applications
Nobody likes to navigate through multiple portals to search for information, or to enter the same information in multiple applications. Therefore, it will be important for MSPs to learn to connect different applications with each other.
By bringing together the information of applications in one workspace you save people ‘search time’. Data from IDC shows that knowledge workers spend as much as 2,5 hours per day, searching for information. Imagine the cost savings you can realise as a Modern Service Provider.
Tip: Gather all the information people need within Workspace 365 using live tiles. Bring together statistics, news, social feeds, but also third application data in one workspace. By creating Business Apps you can even push data from the workspace to multiple applications at once.
In order to move from a Managed, to a Modern Service Provider it is crucial to understand the value you add to customers. What if they don’t need hosting anymore? What if they don’t need their file server or Citrix applications? What if they buy all their software licences directly from the vendors? What happens if it becomes even easier to build SharePoint intranet sites? Ask your team these questions.
I dislike the word XaaS (meaning Anything as a Service) but it’s crucial for Modern Service Providers to become service-oriented businesses. Those who understand will win and those who don’t will eventually lose.