Guest Column | May 22, 2014

Savvy MSPs Take Role Of Outsourced CIOs

By Dave Sobel, director of partner community for GFI MAX

As solution providers have evolved along the services spectrum, their method of engagement has also changed. Many IT providers started life as resellers. In the early days of the channel, manufacturers would provide a product that IT providers would resell, making a healthy margin. As equipment became more and more commoditized, their vendor partners pushed these IT resellers to embrace services as their main revenue generator. Thus, resellers became solution providers, embracing their role of delivering services. With time, it became apparent that there were other models in building a services offering, and managed services became a focus, moving from transactional engagements (often called “break/fix”) to ongoing engagements, delivering a set of services defined in a contract and delivered on an ongoing basis. This shift brought solution providers into even closer alignment with their customers, with the motivation to deliver reliable uptime becoming the goal for both.

The emergence of cloud technologies introduced another shift for solution providers. Cloud services put considerable pressure on solution provider revenue, as cloud services typically offer lesser top-line revenue opportunities, lower margins, or both. In order to keep a solution provider’s business healthy, they need to add higher-value services to their product portfolio. Adding an additional challenge is the fact that the delivery of IT from the cloud has begun to move the decision making process out of the hands of the IT department and into the hands of the business units themselves.

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