By JP Jauvin, General Manager, N-able by SolarWinds
The future of managed services is as bright as it has ever been. A study by consulting firm MarketsandMarkets projects the industry to jump from $14.75 billion in 2013 to $265.05 billion in 2018. That’s about a 1700 percent increase. While this is incredible news, dramatic growth predictions like this often change the dynamics of an industry, making it much more competitive. And for managed service providers (MSPs), the dynamics are changing fast.
Traditional MSPs now find themselves competing with a new breed of MSP. Many established solution providers already specializing in VoIP, print/copier management, audio-visual, along with other technology companies, have started offering managed IT services as a way to generate recurring revenue and diversifying revenue streams by looking for new ways to service existing customers. These are bigger, well-resourced competitors; and all are hungrily eyeing the attractive margins that have propelled managed services into the spotlight.
What can traditional MSPs do to protect their markets? Here are three steps in the right direction:
1. Increase Efficiency
The influx of competitors brings two certainties to the managed services market: greater commoditization of services and price wars. To remain competitive, traditional MSPs must deliver their managed services with razor sharp efficiency. They have to maximize technician utilization rates. Despite this harsh reality, few MSPs have been able to achieve the competitive productivity levels required by using traditional tools, which lack the scalability and repeatability offered by the next-generation automation solutions that are transforming the market.
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