The Key Foundations for MSP Success in 2017

We're only about four weeks into the New Year. Vendor and managed service provider (MSP) optimism for growth and prosperity remain strong—provided some steps are taken today.

It’s no secret that some MSPs have struggled with the epidemic of ransomware, faced with decreasing margins and vendor technology disappointment. The next 11 months will bring more threats and challenges, but remember, your competition’s failure is your new customer opportunity!

So, here are some things MSPs should think about as they prepare to execute throughout 2017.

MSP strategy needs to adjust to the new realities on the ground

Mobile, cloud-based technologies, and more effective security are identified as the key challenges for this year. Since cost is “always” a factor, what does the way forward look like? Pro tip: it’s cloudy.

MSPs working for small and medium businesses (SMBs) are being forced to look at the cost savings associated with Software as a Service (SaaS) models. This enables them to securely adopt new technologies and extend legacy applications (or replace them all together) into the cloud, and deliver those applications into the mobile space. Virtualization, hosted platforms such as Infrastructure as a Service (IaaS), and Software Defined Networking (SDN) will all be leveraged to do this. The old paradigm of “just, make it work” or “just, keep it working” is not good enough. Businesses have to put up with IT as a bottom line expense, but new technologies are coming onto the market that are successfully changing the dialogue into “How do we make it better?” or “How do we move to something that does the same, but costs less?”

MSPs have worked hard to become trusted advisors over the past couple of years, it’s now time for them to start delivering.

With the cost of Azure, Amazon and other hosting providers coming down, it is harder than ever for MSPs to justify the purchase of physical “tin boxes”. Market forces are conspiring against businesses that are spending large amounts of money on physical infrastructure. Competitive advantage is being lost, and the lower costs of SaaS—sometimes by an order of magnitude—are giving businesses unprecedented scalability and agility when it comes to improving existing services or rolling out new ones. If your business model as an MSP is “pushing tin”, then 2017’s trends mean you need to change your approach… and quickly.

The appetite for SaaS-based products is pushing channel vendors and their MSPs through a profound evolution. Channel vendors, armed with new SaaS offerings, have to help educate MSPs on “how to cloud”, “how to mobile”, and “how to secure” so they can meet the demands of their customers.

MSPs are also going to face their own challenges. The old way of doing business and the old way of billing for services is abruptly changing. Fulfilling the diversity in skillsets—from hardware and software migration and managing risk, to identifying a myriad SaaS and IaaS options—will be key.

In particular, securing hybrid and fully hosted services demands a complete change in how MSPs build, maintain, and monitor their customer networks. Now more than ever, MSPs will have to pick the right partners to deliver secure solutions. The hardware is becoming a commodity and the true value of MSPs and IT providers will be to bundle SaaS and IaaS offerings to meet the business need and growth trajectories of their customers.

Can MSPs learn these new tricks?

They certainly can. For MSPs, ransomware increased business in 2016, either by helping to implement basic cyber security for their clients or because they were called in as incident responders. Despite this, the urgency created by these “outbreaks” has stretched MSP resources, and means that they must offer new services (including user awareness training). The urgency has also sparked new conversations about managing endpoints using techniques such as system hardening (including removing Adobe flash), revoking administrative rights, and locking down the end-user environment.

The combination of an abundance of free advice from channel partners and the waning patience on the part of MSPs for a 100% technological ransomware solution has meant that defenses, education, and recovery capabilities are all improving. Many have realized that a ransomware outbreak that causes a prolonged recovery period (days) is both bad for the customer and bad for their reputation.

So, what’s the take away?

Bottom line: If your customers are looking at mobile, cloud, and security improvements in 2017—which they will be—as an MSP you have to be prepared to help them look to you for solutions.

Ian Trump is global security strategist at SolarWinds MSPYou can follow Ian on Twitter at @phat_hobbit. Read more SolarWinds MSP blogs here.