You definitely have a point on “the speed of change.” MSPmentor is a small business itself, and we consider ourselves pretty Web 2.0 savvy. Yet, I struggle to keep pace with new widgets, social networks and potential site enhancements that will make MSPmentor even more valuable.

Ultimately, I think MSPs will “keep up” with the speed of change through three methods.
1. Partnering, as you mentioned, with Master MSPs and subcontractors, etc.
2. Using automation software to make sure trouble tickets and other transactions flow easily between MSPs and other types of service providers that partner up. And as you mentioned, these relationships will need to push far beyond technology. Sales, marketing and support will certainly be crucial.
3. Sticking with open APIs (application programming interfaces) so that you can easily “plug” new functionality into your platform.

Similar to how Windows dominated the 1990s because so many ISVs wrote to Microsoft’s platforms, I think the most successful MSPs will choose open platforms that allow them to pick and choose the features and functions they need most.

I’ve been in some form of IT technology for more than 25 years, and today the velocity of new products coming out, exhisting product enhancements, new managed services that are offered and the rate customer expectations are increasing at a rate that is almost impossible to comprehend. I am not sure how IT service Providers are going to keep up with it all. It is clear to me that MSPs will need to specialize and then use partners (like Master MSPs or Subcontractors) to meet the needs of their customers. Focus on what you do best is a good recipe for success.

As far as the economy goes, Autotask sells business Automation software for MSPs, and we’ve actually seen the rate of adoption for smaller MSPs INCREASE since the beginning of the year. I think the economy has helped MSPs realize value of internal systems Automation to “execute their technology, sales, marketing and support strategies” in a more efficient way.

FACT: MSP’s are vunerable – assuming you have a decent user base – to economic slowdown. BUT……..

I will share one with you. We are backup guys.

We look after a large hedge fund manager in the City of London. Its not Warren Buffett (US reference inserted to keep my “across the pond” readers interested) but put Warren in a Black Tie and Penguin Tails rather than on a big stage and a Motorbike or something and you have our client.

They have hit the rocks.

But they are canny and I like them. And they are looking for line items to displace from the moment they wake up to the moment they go to sleep. They see Backup Managed Service £XXXX. They choose between feeding their kids next month or maybe “sh** happens” and their data isnt there next month. And they want to cancel. Right Now.

I am not arrogant. And I try and work with them. Because I have to think about my cost – right now – to service that account.

And please Joe delete my post but our margins month on month are a very very happy place to be – and we can genuinely offer a respite to our fallen comrades. And we wait to see for a few months and hope that they sort their stuff out. Infact we have backed them – just like they backed us 36 months back.

And lets hope the staus quo will resume.

If not then chalk one up to the Sub Prime Loonies and the Current US recesssion.

In the meantime we are killing the UK public sector world because my dear friend Tony Blair has fed the budgets and they have never heard the phrase “economic downturn” !!

Simon

Mike

In terms of our own coverage, I’m just trying to draw a clear line between the following two statements:
1. MSPs are immune to the economic slowdown (false)
2. MSPs, compared to traditional VARs, are better insulated from the economic slowdown (true)

Too many people are hyping statement one.

However, I would suggest that anyone selling IT services to small businesses in particular has such a huge market to sell into – and most are starting from a very small base in terms of revenue – that there is always more opportunity than one could possibly handle. It’s just a matter of going out and getting it.

If I were a $1B/year provider of services to small businesses and the economy tanked, I would expect my numbers to tank as well because it’s a much harder swing to try to reverse with good old hustle.

My point is that we should all be very careful to not let the economy dictate the success of our business to us or slow down our efforts because the economy stinks. If anything, it should be the other way around.

I hope that doesn’t sound arrogant!

Mike
http://www.smbitpros.com
http://www.everonit.com

You see with net new customers slowing and existing customers potentially leaving or stretching your receivables the only way to make more money is to become leaner. Focus on your bottom line.

So while we are not recession proof, perhaps the economy does offer a unique opportunity for us?