In recent days I’ve been speaking with a range of distributors and resellers who work in the European market. Some of them are here with me at the VMware Partner Exchange conference in Orlando, Fla. Based on our conversations, I think managed services will succeed in Europe. It’s already happening. But not in the way that managed services gained critical mass in the United States. Here’s why.
In recent days I’ve been speaking with a range of distributors and resellers in Europe. They’re bringing up topics like cloud computing, virtual desktop infrastructure (VDI), hosted PBXes, unified communications and virtualization. A few of those sources have North American channel experience. They know how the North American managed services market has grown. But they also know quite a few resellers that have struggled to embrace the MSP recurring revenue model.
With all those variables in mind, some of the executives think European resellers will march directly to cloud computing, while wrapping managed services into the solution. In other words: Customers will demand cloud-centric business solutions, and resellers will wrap managed services into the solution. A prime example involves hosted PBXes — VARs can earn a recurring monthly fee for hosted VoIP. The VARs can also resell, lease or pursue hardware as a service (HaaS) with engagements for desktop phones and handsets. Somewhere within the deal, the VAR will wrap in a monitoring service to ensure the hosted PBX and desktop phones are working reliability.
The key takeaway: Managed services will likely be one key ingredient in a larger SaaS or cloud deal.
Remote Monitoring
The big wild card involves proactive desktop monitoring and management. Yes, all resellers need a tool to remotely monitor and manage customer PCs, laptops, netbooks, smart phones, etc. But will European resellers charge a customers monthly per-user fee for that monitoring service? I can’t provide a definitive, blanked answer to that question. The question becomes even more intriguing as Virtual Desktop Infrastructure (VDI) takes hold. In the VDI world, most of the software intelligence lives up at the server. If there’s an application problem, the end user — in theory — can simply fire up another virtual machine. In that model, there’s a greatly reduced need to constantly monitor and manage PC desktops.
So am I down on the European managed services market? Absolutely not. When we unveil our fourth-annual MSPmentor 100 report on February 16, you’ll see quite a few European MSPs on the list. We also highlight the top 20 European MSPs on a separate list. Some of the companies are growing their managed services revenues more than 50 percent annually.
Cloud Creates Pull for Managed Services
But one size doesn’t fit all. Thousands of European resellers have yet to embrace managed services. And no doubt, aspiring MSPs need to spend a lot of time educating end-customers about the business value of managed services. Instead of getting into a lengthy managed services sales pitch — “we’ll give you a nice report every month” — I suspect those European resellers will focus on emerging cloud and hosted applications, and then wrap managed services into the deal.
In theory, it sounds like a pretty simple conversation:
- What are the customers’ business issues?
- Which applications — cloud or on-premise — solve those business issues?
- Which managed services can ensure the applications remain optimized and available to customers?
Still, I’m getting ahead of myself. Most of my European channel sources tell me it’s unfair to lump all European countries into a single IT conversation. Some countries are still in break-fix mode. Other countries have national telcom companies that are pushing into SMB IT services. And other countries have solid managed services momentum.
One size certainly doesn’t fit all. But I do think, over the long haul, the cloud will be the single thread that pulls the European channel forward. Managed services will certainly be along for the ride.
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Posted In: EMEA (Europe, Middle East, Africa)
Tags: European Cloud Computing | European Managed Services | European MSPs
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Another challenge for Euro MSP – European Union Data Protection Directive….i.e. data privacy, the transfer of personal information across country boundaries, etc.
Hi Jo,
Great to see a European focused article. I setup business as an MSP In the UK (although at the time I didn’t know what an msp was) over 7 years ago. At the time we were to far ahead of the game, and the small business owners just didn’t get it or didn’t need a managed service. Over the last 3 years we have seen a massive increase in interest in our services, not because we are an msp but because we lookafter all the technology within the business. And over the last few years the amount of tech used such as iPhones, blackberries and cloud has increased very quickly.
What we do is manage and support that technology. So no matter wether its cloud or on premise, if you help small businesses get the most out of that tech you will be successful
Excellent article Joe,
I read MSP mentor daily but articles concerning Europe are a rarity.
I have experienced an enormous growth in interested in the past 12 months in the European markets.
Especially Scandinavia and Benelux are regions adopting Managed Services in a rapid pace.
B&F engagements are still the most common model but a lot of the major players in the market are looking into how to enter the MSP market.
This has naturally affected the awareness of the SMB sector and more and more Var’s are looking into how to benefit from recurring revenue.
Europe is certainly a very interesting market at the moment!
-Lassi
Account Executive
N-able Technologies
Hi,
I have a small company that provides technology services in the Basque Country. We are very interested in offering managed services, although we have not chosen any tools for it. Lee, give me some advice?
Rob@1: I will keep the European Union Data Protection Directive in mind as we plan future coverage.
Lee@2: Sounds like you were ahead of the MSP curve… worldwide. Do customers actually “ask” for managed services or do you find they have specific business problems, and you step in with a managed service to solve the issue?
Lassi@3: Please keep us posted as you track more European trends. Are you based in Europe?
Garikoitz@4: Let us know what routes you pursue. And let us know what business messages you promote to customers. Tools are great… but we’re also interested in the business side of the conversation.
-jp
Garikoitz:
You can find many good companies who can help you towards offering Manager services. I work for N-able and we help European IT service providers to transform their business towards the new business model.
Joe:
Yes. I am based in Utrecht, the Netherlands Europe HQ for N-able. It is a very interesting period we are experiencing and the growth potential of the market is enormous!
-Lassi
Hi Joe. Non of our customers know what managed services are, we now purposely leave this off our marketing as we feel this can alienate some prospects. We pretty much match a managed service to a customers need. I would say from a customers perspective managed services is still very much in it’s infancy in the uk. Although we don’t have experience with businesses over 200 users, so is likely to differ in larger msp’s
Garikoitz:
There are so many msp tools available today. If you look around mspmentor you will find plenty of information. We have settled for labtech software after a number of years chopping and changing.
I would say a good PSA package us just as essential for running the business, my advice would be too trial as many as possible, we made some expensive mistakes in the begining.
Oh and its easy to get wrapped up in selling the benefits of tools to prospects, try not to focus on this
I agree with Lee. You need to find a company you want to work with for a longer period of time.
The customers are not going to buy in for technology talk, but instead of what the change will mean to them
Hello,
We are a small business. We want to offer managed services to local companies, but we have no experience. So far we focused on fixing problems, but we want to offer something new and we’re thinking of managed services.
We’re still in the process of selecting a manufacturer who does not have to use external packages (eg deployment of software, tickets,…).
I know many manufacturers: Kaseya, N-Able, Labtech, … I do not know what to choose. So I’d like to hear your experiences.
In addition, I also want to know how enfocáis this new business opportunity, what type of businesses are your customers, how calculáis the price …
Thanks!
HI Garikoitz.
If you want to learn more about N-able you can always contact me at:
llankinen@n-able.com
I am happy to have a discussion how we could assist you in your efforts.
-Lassi