Managed services companies are finding it hard to deliver against their long term plans as they compete in the marketplace for limited skilled resource while facing much more detailed customer requirements around integration and legacy systems.
Data coming in from the first responses to the latest survey on the state of the managed services business show that the emphasis is very much on the managed part. MSPs are telling us of the issues they have with customer communication, ensuring that they understand how the services are being used, made secure and where they fit into the overall strategic IT plan.
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A core issue seems to be management – trying to reduce the need for highly qualified staff in sales and support who are in almost constant contact with customers or with vendors. The most efficient service providers are those who have made substantial strides in remote management, in internal monitoring and in customer communication – in automation in effect.
Part of the issue may be the customers themselves, respondents tell us. In certain classes of client, where the IT department is traditionally focused and using legacy applications, the tasks of keeping the systems working has been placed on the MSP even though they provide just a part of the picture. Integration with existing, often complex applications which may be being changed and updated continuously is a task which IT departments are happy to pass on where possible.
The use of cloud hosting and its integration with these legacies can mean that the service provider is caught between a large global hosting provider and the client’s own internal systems. The need to properly analyse and assess the implications of this requirement when pitching for the business initially has meant some customer concerns and a tendency to churn the MSP to find solutions.
True greenfield sites for managed services are becoming rare and with changing security requirements on the top of the services, MSPs are finding themselves short of resources to do the necessary preparation when bidding for such work, the survey is expected to show. MSPs themselves report that customers will focus on a key individual in the MSP organisation who understands their business and environment; should this person jump ship, the customer often follows.
Building and managing systems to monitor and control the range of services for individual customers is complex enough; it also limits that essential feature of repeatability that managed services needs for efficiency and profitability on the part of the MSP.
These and other issues will be urgently discussed at the European Managed Services and Hosting Summit, in Amsterdam on May 23. Key speakers from Gartner and other researchers will report on this area of customer relations; while other experts talk about technology integration and the ways of building long term value in a managed service provider by focusing on the important elements of the business such as the customer retention level and staffing.
