This is an uncertain time for managed service providers (MSPs). Commoditization, as always, is threatening profitability while disruptive market trends raise questions about providers’ ability to adjust and protect their competitive positions.
But you need not fear the disruption that technology developments such as the Internet of Things (IoT), artificial intelligence, and software-defined models are causing. So long as you are willing to accept change and invest in new ventures, 2018 should bring a host of new profit-making opportunities for MSPs. Keep an eye on these five major trends.
Now that businesses have embraced cloud models, they are using multiple clouds for different functions while still hanging on to on-premises assets. This creates hybrid environments that can become too complex to manage if not approached correctly. To help prevent that, and ensure businesses get the most value out of the hybrid approach, customers will need MSPs to step up and manage the environment for them.
The days of deploying and maintaining hardware at client sites are pretty much over. Software-defined networks (SDN) are gaining traction now that telecoms and cable providers have started to productize the technology with SD-WAN solutions. As with multi-cloud environments, businesses need expert advice on how to best leverage and manage these solutions. Since this is a remotely managed technology, it is ideally suited to the MSP model.
IT security traditionally has focused on prevention. But as threats multiply and grow in sophistication, new approaches are required, creating a market for what Gartner calls “managed detection and response” (MDR). The model calls for a unified approach that identifies security gaps and uses a combination of technology and human expertise to “improve real-time threat detection and incident response capabilities.” The managed aspect of this approach is tailor-made for MSPs.
IoT deployments won’t happen overnight, but the idea of connecting anything that can be connected is making headway as companies include IoT strategies in their overall IT planning. IoT will necessitate the creation of micro data centers at the network edge, all of which will require planning, execution, and ongoing management. Edge computing sites will require remote monitoring and management, and that’s right in the MSP’s wheelhouse.
As IoT and edge deployments get underway, companies will be running applications and systems purpose-built to their specific business and industries. A healthcare IoT artificial intelligence (AI) application will differ considerably from one built for manufacturing or retail. MSPs will need to make decisions on what to focus on because, as the IoT takes off, it will require specialization to best serve end clients.
These five market trends represent an evolution of groundwork taking place in recent years. It may have been possible to resist them in the past, but in 2018, the effects of their disruption will be hard to ignore. MSPs looking for longevity need to seriously consider them.
Pedro Pereira is a Massachusetts-based writer who has covered the IT channel for two decades. Recognized as one of the first journalists to cover managed services, Pedro continues to track, analyze and report on the IT channel and the growing MSP partner community.
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