Managed Services Trends For 2017

By Andrew Harrover, CEO, Matrix Computer Consulting, ASCII Group Member Since 2012

There is so much thrashing around in buzzword land about the future of all things cloud it can be difficult to discern a direction. As with most emerging trends, the majority of the heat around this subject is generated by sales and marketing requirements. Those of us in the trenches are normally stuck with sorting this stuff out at a far more practical level and develop a somewhat different view of things. The predictions that follow are inspired by that front-line experience.

1. Hybrid cloud is real and it isn’t going away. The real star of hybrid cloud is the humble file server, unadorned except for a sticker and a logo badge. Indeed, if 2015 and 2016 where the years of pure cloud, then 2017 will be the year of the hybrid. We see this sort of messaging around product lines all around us. For years it has been cloud, cloud, cloud but, as reality has started to sink in, a more balanced approach seems to be taking shape. Introducing the “edge.” Indeed, key players are shifting messaging and products to leverage the hybrid trend. This isn’t a prediction that, with a wave-like oscillation, everyone is going to rush back on premise, but it is a realization we were moving data and workloads into the cloud that just did not make any sense.
2. Ongoing commoditization of the cloud. More and more services and applications will move to the cloud. The net result will be a commoditization of an increasing number of cloud services. This will reduce revenue and upselling opportunities to MSPs as more customers go direct. Those MSPs or VARs who simply sell these sorts of services will be forced into a low-value, low-margin game. There is, however, an upside and it is the same as it ever was: those companies that can stitch together solutions, services, and product as an across the board solution will thrive.
3. Cybersecurity continues as a growth center. This trend seems years old but it shows no signs of slowing down. Look for mid-market security solutions that have, heretofore, been out of reach of those in the SMB space to come down market and offer an attractive solution in a box. In line with the commoditization trend, MSPs will need to assemble several individual solutions into an umbrella for their clients. Cybersecurity is a bit unique amongst these other items as it is simultaneously a huge opportunity and a huge risk. A client with a serious breach is a client looking for a new solution provider.
4. The MSP market and business model is maturing. Most firms that identify themselves as MPSs have been in business at least three to five years. This ultimately will lead to a winnowing of firms that do not execute the MSP business model cleanly. Those firms will be faced with three choices: start to execute against their managed service business model; revert to break-fix; or get pushed out of the business altogether.
5. Newer technology. This isn’t so much a trend as it is a fact of life in the Information Technology space. Those companies that do a great job of investigating new tech and delivering solutions will thrive. This is especially true right now as new and innovative solutions are delivered by leveraging cloud computing.

This year is not going to look all that much different than last year and that is what is going to make this a challenging year in the MSP market. Struggling to discern future trends in what appears to be a somewhat stagnant market is always tricky. Investing heavily in future tech in what is appears to be a tranquil solution market is tricky.

About The ASCII Group, Inc.
The ASCII Group is a vibrant reseller community of independent MSPs, VARs, and other solution providers. Formed in 1984, ASCII has more than 70 programs that provide turnkey cost-cutting strategies, innovative business building programs, and extensive peer interaction. ASCII members enjoy benefits such as marketing support; educational information; group purchasing power; increased leverage in the marketplace; and multiple networking opportunities. These programs enable ASCII members to increase revenue, lower operating costs, and grow service opportunities. ASCII is the oldest and largest group of independent information technology (IT) solution providers, integrators and value added resellers (VARs) in the world. Learn more at www.ascii.com.