Why do so many managed service provides spend so much time looking in the rear view mirror? That question popped into my head while moderating a session at the N-able Partner Summit last week.
Quite a few summit attendees told me they’re concerned about Microsoft, Dell, Google, Amazon and other big vendors offering software as a service (SaaS) directly to their customers.
Perhaps I’m naive. But shouldn’t MSPs be looking ahead and stepping on the gas, rather than looking back and worrying about big vendor competition?
Of course, it’s healthy to understand and monitor your competition. But some MSPs seem distracted by Microsoft’s moves.
Shareholders Come First
Yes, Microsoft will host applications directly for customers. And Microsoft may launch a managed services platform of its own.
Plenty of VARs and MSPs take issue with Microsoft’s direct SaaS push. But let’s face it: Microsoft had no choice in the matter. Faced with competition from Google and upstarts like Salesforce.com, Microsoft had to make a direct SaaS move. Failing to do so would have been laughable, especially since Microsoft must answer first to shareholders.
Still, Microsoft isn’t abandoning the channel. And there are dozens of areas where MSPs can continue to innovate where Microsoft can’t. Remember: Each time a managed service becomes a commodity, several new managed service options surface. Check out our Managed Services Hype Cycle for more information.
And as one MSP at the N-able conference put it: Microsoft’s core expertise is developing applications, not hosting and optimizing them for customers.
Savvy MSPs own the customer relationship. I don’t expect to ever change in the small business market.
MSPmentor is updated multiple times daily. Don’t miss a single post. Subscribe to our Enewsletter, RSS and Twitter feeds.
Read More About This Topic
Share This Post
Posted In: Platforms | Software as a Service and Hardware as a Service
Tags: Amazon Simple Storage Service | Google Apps | Managed Service Provider | Managed Services | Microsoft Managed Services | Microsoft Software as a Service | MSP | N-able Partner Summit
Interact: Add a Comment | Trackback Link | Permalink
Subscribe: RSS Feed
Get Started: Visit our new 
Joe -
Good job moderating the panel. I enjoyed participating. It’s too bad you had to dash out to go to Australia though (tough being you, eh?)!
A quick point about your post: MSPs should be concerned about the moves made by Microsoft and others ONLY if they don’t do something about it first.
It is a FACT that centralized computing models will be the focal point of the new IT paradigm. Nothing will stop this momentum.
But whether MS and others actually do steal your customers is not the real risk (I’m quite confident that MSPs will fight to the death if necessary!). The real risk is that MS and others will in fact make the attempt. This process is where the risk is for the MSP. It is a risk of margin and coverage erosion. Will you keep your customer? Perhaps. But at what price? What price will you have to pay in margin because the numbskulls at Microsoft and Dell and Amazon have dropped their proverbial pants and told your customer, for better or for worse, they can do this for next to nothing?
We believe the right response is to deliver the technology solution your customer will soon demand, and that MS and others will offer, preemptively. Run your customers key business systems now. Move those applications (whatever they are) to a centralized computing model TODAY (just make sure you don’t let someone run them that will try to eat your lunch tomorrow!). And when MS comes knocking your customers can tell them “sorry, my trusted advisor already has us sorted out, but thanks for calling!” (Ok, over simplified for sure, but hopefully you get my point!)
As my mother always told me, an ounce of prevention is worth a pound of cure.
John: Greetings from Melbourne, Australia and thanks for the feedback. Thanks for supplying the voice of reason to the issues above. I think your point about an ounce of prevention parallels my point about pressing on the gas an speeding forward.
Keep your rivals in mind but focus all of your forward-looking efforts on your customers.