Microsoft has championed the partner sales channel and we’ve seen it time and time again; how they’ve leveraged their partners to leap frog the competition.

Take for example: Internet Explorer.

In this case, they’ll leverage their partners who have expertise in a specific vertical. These are the partners that have developed strong relationships with their customers and the industry and will ultimately convert many customers to Microsoft’s Online Services.

I think your line stating the following was right on the mark: “If your business’s focus is maintaining and supporting Microsoft networks, then be prepared for a market that may not exist in 10 years.”

My advice would be for MSPs to follow the open source world very closely. I’m not referring to Red Hat or Novell. Rather, look at the application providers like OpenBravo, WordPress, SugarCRM and Digium. They will provide clues about how collaborative systems will evolve — and the types of components MSPs can snap together into managed solutions.

Look at it this way: MSPmentor isn’t a managed service provider, but we are a small business. And we run our entire operation on open source solutions hosted in a data center.

I’m not suggesting that open source is always better than closed source. But the pace of innovation accelerates when people are free to tinker with code on their own, then contribute back to community.

Your point about MSPs acquiring hosting providers also is an interesting one. I think one of the biggest questions MSPs face is whether to build a data center, acquire one, or simply turn to a master MSP.

As an industry observer, I sense that the small hosting providers will eventually get squeezed by the big boys and the big software companies themselves. But that’s pure speculation on my part.

The good news in all this: Data continues to double every 12 to 18 months, which means SMB customers are going to have plenty of content headaches for MSPs to fix for years to come.

I agree with your post. I think Microsoft’s recent announcement as well as the forewarning about SaaS to partners at last year’s conference clearly shows Microsoft’s intentions to become a SaaS player or possibly even a ITaaS (IT As A Service) player.

I don’t see how they can afford not to… Google’s intentions are very clear, in 3-5 years with continued development they should have a business productivity suite that is comparable to Office, maybe not as advanced but it will accomplish 95% of the daily requirements of an office worker.

So that leads me to the question…what reason would a small business have to purchase and maintain their own infrastructure?

Storage? Online storage is getting cheaper by the day, Google now offers up to 400GB for $500 per year. That’s 10 cents/GB per month!

Email/Groupware? Easy argument to make that hosting your own email server doesn’t make a whole lot of sense compared to a hosted datacenter solution.

Office Applications? Customer Industry/Vertical Apps? With Application Presentation and Streaming, why host apps on the desktop? You can achieve better control, security, and management of licensing and assets through virtualization, presentation, and SPLA. In addition, The vast majority of those Independent Software Vendors are developing or have plans to develop SaaS offerings of their products. Look at the MSP industry, ConnectWise, Autotask, N-Able all have web versions of their products.

So what’s left? Clearly not much when it comes to the typical infrastructure requirements of a small business.

The question every MSP must ask is how to stay ahead of the game. If your business’s focus is maintaining and supporting Microsoft networks, then be prepared for a market that may not exist in 10 years.

That’s why you see the major MSPs, like Mindshift, making acquisitions of hosting providers NOT other MSPs. It’s all about hosting.

If you’re worried about customers not understanding or embracing this model, I can tell you from personal experience that we were very surprised to see even our largest clients embracing this concept. But then again, it makes sense since our customers didn’t have a choice between hosting IT or building their own infrastructure. They were forced to, and most businesses want to get on with the business of their business, not IT.

I believe, as an industry, we need to start having a conversation about what’s next and how WE can map out our future, rather than have our future dedicated to us by our former “partners”. I hope what you started here today Joe becomes the forum for that conversation.