The Evolving MSP

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How Does Your Partner Practice Grow?

One of the most memorable quotes from legendary sales motivator Zig Ziglar is, "If you're doing what you've always done, you're probably getting what you've always gotten." But that's no longer true. Many channel resellers who continued to depend on product resale proved that to themselves very painfully. Each year, they were doing more than they had ever done and sold more products to more customers, but each year they actually got less than they had always gotten.

The current state of our channel now is better captured by Lewis Carroll in "Through the Looking-Glass," in which the Red Queen intones, "It takes all the running you can do to keep in the same place." This is mainly because customers are now asking the same question posed by fabled philosopher Janet Jackson: "What have you done for me lately?"

To Do and Earn More, You Need To Learn More
When the arrival of cloud computing totally disrupted the product sales opportunity for channel partners, many made the wise decision to become managed service providers (MSPs). No longer were their earning opportunities controlled by pricing competition; instead, they now could distinguish themselves through the quality of the services they delivered and the trust they earned from their customers by being true professionals.

However, some resellers started calling themselves MSPs but didn't really change their business practices much. As a result, the services they delivered were substandard and, in many cases, damaging to their customers. To know how bad the results of such behavior could be, you only need to look back as recently as January 2022, the U.S. Cybersecurity & Infrastructure Security Agency (CISA) issued an alert titled, "CISA Insights on Risk Considerations for Managed Service Provider Customers." Just the first paragraph is chilling to every member of our community:

Overview
To aid organizations in making informed Information Technology (IT) service decisions, the National Risk Management Center (NRMC) at the Department of Homeland Security's (DHS) Cybersecurity and Infrastructure Security Agency (CISA) developed this set of risk considerations for Managed Service Provider customers. This framework compiles information from CISA and IT and Communications Sector partners to provide organizations with a resource to make risk-informed decisions as they determine the best solution for their unique needs. Specifically, the framework provides organizations with considerations to incorporate into their IT management planning and best practices as well as tools to reduce overall risk.

The bolded text at the end is emphasis CISA's, not mine.

This damaging report was the direct result of a sizeable proportion of our channel colleagues deciding to "fake it" instead of "making it." Customers paid the price, and then the other proportion of our community suffered, too. (How many times have you heard a prospective customer say, "Oh, you're an MSP? No, thank you. We've been burned before by an MSP.")

Where Do We Go from Here?
I closed the very first post in this blog series by asking, "How are you growing your MSP practice?" I plan to keep asking that question over and over, always suggesting possibilities and hoping to hear from you about how you're growing your MSP business.

One thing is for sure: The practices that are succeeding today have specialized. These partners have differentiated themselves by focusing on specific technologies and their corresponding specific business needs. Many have chosen to become managed security service providers (MSSPs), which makes tremendous sense since most customers need secure data and networks. There's plenty of opportunity there.

Microsoft, in particular, has encouraged many to become cloud solution providers (CSPs), mainly because Microsoft has truly gone "all-in" on the cloud, as former CEO Steve Ballmer loved to expound upon. In fact, a few years ago in this blog, I suggested some possible growth paths for today's MSPs to specialize and grow in. Check out what was at the top of my list:

  • The Cloud Services Provider (CSP)
  • The Data Scientist Service Provider (DSSP)
  • The Software-Defined Services Provider (SDSP)
  • The Automation Services Provider (AuSP)
  • The Artificial Intelligence Services Provider (AISP)
  • The Internet of Things Service Provider (IoTSP)
  • The Universal Communications Service Provider (UCSP)
  • The Vertical Services Provider (VSP) -- many flavors!

I'd be willing to bet that there are those of you out there now who are working on many of the others on this list. Some of us have started using the catch-all acronym ITSP to refer to all kinds of Information Technology Service Providers. The more we can grow the need for such a collective acronym, the more mature our industry becomes.

Have I missed any? Are you developing a specialty that I haven't mentioned in this list? We would all love to hear from you about it. You can always reach me directly at [email protected].

Posted by Howard M. Cohen on November 28, 2023


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