DRIVERS OF CHANGEFIVE THINGS EVERY MANAGED SERVICE PROVIDER SHOULD KNOW

Five big trends are driving massive change for managed service providers:

1. New competitors2. Commoditization3. Mobility4. Bring your own device5. The cloud

All fi ve are interrelated, but all each has its own impact on enterprises – and MSPs who support them.

The following is our take on how can you evolve your services and business model to refl ect this new reality.

IT isn’t what it used to be.

The high margins of managed services are attracting serious competitors from non-traditional areas. Big companies with existing IT expertise and customer relationships – in the copier, A/V and telephony domains – are looking to tap in and access new, recurring revenues. It’s why the managed services fi eld is seeing a record number of mergers and acquisitions. This ‘convergence’ trend means existing MSPs need to be ready to compete.

How much?With an average gross margin of 60 percent, the profi tability of managed services is too good to ignore.1

1 Walsh, Larry. “Managed Services Tops Profi table Models”. http://www.channelnomics.com/channelnomics-us/news/2368618/ managed-services-tops-profi table-models. Channelnomics.com. May 28,2013.

The good news: managed services are still lucrative.

The bad news: everybody knows it.

You want to compete on value. They want to compete on price.

With new MSPs aggressively commoditizing their services, incum-bents are forced into the position of having to justify higher fees. That’s where operational effi ciency comes in. If you can deliver services more effi ciently, in higher volumes, you can aff ord to bring your fees in line with the market and still enjoy strong margins.

Commoditization is here“Artifi cial commoditization” – the self-imposed, self-directed lowering of prices and profi ts – is rampant in the managed services community.2

2 The 2112 Group. Countering Artifi cial Commoditization and Poor Pricing Practices in Managed Services. 2011.

The market is on the move. Literally.

3 Danova, Tony. “Morgan Stanley: 75 Billion Devices will be Connected to the Internet of Things by 2020.” Business Insider.

http://www.businessinsider.com/75-billion-devices-will-be-connected-to-the-internet-by-2020-2013-10. October 2, 2013. in Managed

Services. 2011.

The ubiquity of mobile devices opens up excellent opportunities for MSPs: all those smartphones and tablets need the same management and security as desktops. Extending contracts to include mobile devices allows for user continuity and demonstrates greater value to the client. The MSP mindset needs to evolve from managing devices to “managing mobile computing”. When you can manage every single point of contact for the end user, you deliver a complete, streamlined service to your customers.

Device dominanceCisco® projects 50 billion connected devices world-wide by 2020. Morgan Stanley® thinks it will be more like 75 billion.3

BYOD is the order of the day.

Today’s mobile workers are ‘device jumpers’, moving from PC to laptop to smartphone to tablet almost without thinking. For MSPs, this multi-device reality means greater complexity and more applications. To stay competitive and current, Managed Service contracts need to be more fl exible and include more devices than ever before – while delivering 24/7 Help Desk Support to ensure their customer’s end users have the professional assistance they need, when they need it.

“You’re on your own.”According to a global survey of CIOs, 38 percent of companies expect to stop providing devices to workers by 2016.4

4 “Gartner Predicts by 2017, Half of Employers will Require Employees to Supply Their Own Device for Work Purposes.” Gartner news release. http://www.gartner.com/newsroom/id/2466615. May 1, 2013.

All roads point to the cloud.

Business today happens in the cloud. Which means your MSP practice needs to, too. Off ering cloud-compatible managed services will increase effi ciencies for both you and your clients – and keep your off ering on the cutting edge.

The o� ce online.A million customers signed up for Microsoft’s cloud-based Offi ce 365™ application in its fi rst 100 days.5

5 Foley, Mary Jo. “Microsoft: 1 million Offi ce 365 Home Premium subscribers on board.” ZDNet. http://www.zdnet.com/article/microsoft-

1-million-offi ce-365-home-premium-subscribers-on-board/. May 29, 2013.

Automation is the answer.Automation of your services is the number-one key success factor, off ering a way to make your services more effi cient and more valuable. Control systems reduce operational costs and labor time while allowing you to deliver fast and eff ective IT solutions. Streamlining your business with automated IT services gives you the scalability to grow your customer base without compro-mising on service quality or profi tability.

SolarWinds N-able can help.SolarWinds N-able’s Automation Manager seamlessly automates more than 95 percent of standard IT tasks. The industry’s fi rst codeless, customizable automation engine, it reduces technical complexity and lets you scale rapidly without adding to your IT infrastructure. You can manage hundreds of devices and thousands of customers while keeping labor costs down so you can grow your business profi tably.

About SolarWinds N-able Copyright

SolarWinds N-able is a leading global provider of complete IT management, automation and MSP business transformation solutions, including the award-winning SolarWinds N-able N-central® RMM and service automation platform. SolarWinds N-able has a proven record of helping MSPs standardize and automate the setup and delivery of IT services to achieve true scalability. Thousands of MSPs use SolarWinds N-able solutions to deliver scalable, fl exible, profi table managed services to over 100,000 SMBs worldwide. With offi ces in North America, the Netherlands and Australia, SolarWinds N-able is 100% channel-friendly and maintains strategic partnerships with Microsoft®, Intel®, IBM®, CA®, and Cisco among others.

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