Adam Stern Forbes Councils Member | Forbes
It’s positively Dickensian.
For small and midsize businesses aiming to get their bearings within the managed service provider landscape, the past year was the best of times, it was the worst of times. And it remains the most vexing of times, with something venerable — the MSP — now seeking to reinvent itself to decidedly mixed results.
Managed service providers represent a multigenerational phenomenon in the IT realm. They’ve been around seemingly forever, so you can be forgiven if you don’t do a double-take — although, perhaps you should.
According to Mordor Intelligence (paywall), the managed service provider (MSP) business is hot. Mordor valued the globalmanaged services marketat nearly $156 billion in 2017, and it projects the market to nearly double by 2023.
While the managed service provider model remains fundamentally sound, these aren’t necessarily your father’s MSPs. Some are superb — conscientious, responsive, knowledgeable. Some are not.As it happens, this latest iteration of MSP-dom masks a backstory that isn’t always sympathetic to the needs and goals of many small and midsize businesses. I believe what we’re witnessing is a market that appears to be growing too fast for its own good.
A 2018 report from U.K. researcher ConnectWise tells the tale: “As a result of … pressure to improve the customer experience, many MSPs are devoting more resources to IT/technology roles than sales and marketing. Surprisingly, a full half of those surveyed say they don’t prioritize the customer experience when evaluating their managed-service offerings, and one-quarter don’t measure customer satisfaction at all. Such a gaping operational hole is shocking. … How can you retain customers if you don’t even care enough to see if they’re happy with the way you’re servicing them?”
Likewise, Analysys Mason’s survey of 950 MSPs worldwide shows that just 38% track metrics to assess service quality and likely customer retention: “Customer satisfaction can have a significant impact on managed service providers’ overall business; it is therefore surprising that most do not even track it. … This suggests that MSPs do not understand, or do not have the means for understanding, the significance of customer satisfaction and how it affects the rest of the business.”
That’s in part because so many MSPs are newbies and/or are opportunistically hanging out where the action appears to be. It appears that the accent today is more on “provider” and less on “service.” A fair number of MSPs have taken to selling the cloud — a “best of times” development at first blush. But it turns out that this sudden interest in the cloud stems less from a commitment to doing the heavy lifting of infrastructure building/support than from convenience.
That’s a break from the past. Back in the day, MSPs tended to be agnostic. When they were known as VARs or ASPs, providers fixed things when they broke. The client really did come first. Now, your average MSP has skin in the game, which invariably means being tied to Microsoft Azure, Amazon Web Services or some other remote third party. Older MSPs grew up in a 9-to-5 environment, opting to handle support only during business hours rather than round-the-clock.
As the CEO of a cloud service provider, I’ll be the first to admit that while CSPs don’t walk on water, our ethos typically is customer-centric, not churn and burn. So for small and midsize businesses on the receiving end of pitches from today’s MSPs, it’s essential to separate faux service providers from the genuine article (i.e., those who embrace best practices as a matter of course and have demonstrated an interest in the industry, versus those who’ve just shown up).
Before you enlist the services of an MSP, start by asking these questions:
• Does the MSP offer an eclectic, end-to-end solution set, one tailored to customer requirements and idiosyncrasies rather than hawking prefab, off-the-shelf apps?
• How long has the provider been around? Has the MSP invested in building, testing and operating its own infrastructure/data center? Does it use what it sells?
• If the MSP is affiliated with Azure or Amazon Web Services, what value-add does it offer? If the MSP runs its own data center, what kinds of certifications has it obtained (e.g., VMware VSP)? If not, in whose data center is the virtual hardware housed?
• How well-staffed is the MSP? Everything from applications to virtual hardware, or just the virtual hardware? What level of competence do its engineers have?
• What type of support is on offer, and how is that defined? Is the provider a 24/7/365 companion or a fair-weather friend? What assurances are there that the MSP has built a 24/7 hosting environment?
• What does the MSP’s service level agreement (SLA) consist of? What happens if the SLA isn’t honored?
• Does the MSP have the professional cred to keep your operation out of trouble? Has the provider passed the SSAE (Standards for Attestation Engagements) 18 Type II audit? The audit is a sort of bar exam for cloud hosting companies; to be SSAE compliant, a MSP needs to offer managed backups with 14-day retention, enterprise-level and application-level protection, advanced monitoring and multilevel intrusion prevention, SSL capability, hardware firewall, and IP-restricted FTP.
All of this surely is a heavy lift, but it’s important for small and midsize businesses to do their due diligence when evaluating MSPs.
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