It should be noted that the cloud represents a dark force for many IT professionals and managed service providers. Just like 15 years ago, when Dell's direct online sales model threatened the success of VARs, it should come as no surprise that today, managed service providers are threatened by the cloud. In the last few years the cloud has moved from the new trend in the industry that everyone is talking about to being prominently at the heart of the tech industry. With the advent of the cloud phenomenon, the industry has done a rapid U-turn, limiting the traditional role of the managed service provider and transforming the way file storage, databases, directories, emails and more function and need to be serviced.
In many ways, the cloud has created a massive opportunity for MSPs who are able to leverage their ability to understand business requirements and provide strategic advice and bridge the gap between the technology and business worlds, which involves a change in the mix of the skills on their teams. It’s certainly not perfect, yet there are several reasons why the cloud provides an amazing silver lining for MSPs, if they choose to embrace it.
While an MSP a decade ago just had to know how to keep a fleet of other people's Microsoft servers patched, the proliferation of cloud vendors in recent years has spawned a need for a new set of skills. In fact, prior to the cloud revolution, MSPs solving business problems really only had one question to ask - which Microsoft product will solve my problem?
Figuring out how to steer through the rapidly changing cloud-based software industry is complicated and demanding, and the reality is that most businesses are at a huge disadvantage. It’s not easy. One particularly notable factor about cloud vendors is that they aren’t little cottage operators that businesses and MSPs alike can choose to dismiss and continue to stick with everything Microsoft. According to Forbes online, by the end of 2015, the cloud industry in the USA could be a $180 billion industry, meaning the industry is growing and so is the demand. Thanks to cloud vendors, our options and choices as users are virtually unlimited, opening up new opportunities for MSPs.
The new IT landscape is incredibly hard to understand, and having the ability to navigate the industry is at the heart of the opportunity for MSPs. As the management overhead shrinks, the requirements around selection, optimization and implementation have increased, creating a need for consultative-type work that could be provided by MSPs.
It takes a strategic combination of savviness and desire to shift the role of the MSP from a tech-insurance support model to a more consulting role. Though it’s true that too many MSPs embrace the easy solution of falling back on recurring revenue, future success lies in adding projects to the mix. This approach requires an upgrade from a short-term, ticket-centric approach, used by most MSPs, to more of a long-term, project-based strategy. Rediscovering projects does not mean adding larger and longer tickets; it requires MSPs to tap into their project management skills by discovering needs, planning strategies, implementing new technologies and actively managing their client relationships.
Project management work takes much longer than simply handling a ticket, but the reward is a long-lasting client relationship that garners the recurring revenue and adds on the project element for a combined, profitable business solution. The smartest MSPs will make the move early on into high-margin project delivery. Rather than waiting for triggers to notify when something isn’t working or trying to justify RMM to a client, smart MSPs should step away from solely working on the formulaic, recurring ticket management and step into a more consultative-type of role. By rediscovering lucrative project management, they are able to establish the next project cycle, work on their client priorities and discuss their business challenges.
A big part of transitioning to projects for MSPs is to fully avoid the potential pitfalls that can come with dynamic project management. And those pitfalls should be taken very seriously. While certainly not an exhaustive list, the following are some ways to avoid the common pitfalls that project managers experience.
Despite the information available about project management solutions, the sad truth is that the systems most MSPs are using to run their businesses are as old as the business model itself. These outdated tools are not cut out for a strategic engagement model that derives most of its revenue from high-margin project delivery, and the need for a solution capable of handling their needs. If MSPs do not consider a transition to a system designed to handle their project management needs, they risk not being able to handle the demand. In the end, MSPs should be using software that fits the prevailing, recurring revenue model but that also excels at project management, billing and scheduling, and tickets and services, and facilitates effective communication.