DRIVERS OF CHANGE

FIVE THINGS EVERY MANAGED SERVICE PROVIDER SHOULD KNOW

IT isnt what it used to be.

Five big trends are driving massive change for managed
service providers:
1. New competitors
2. Commoditization
3. Mobility
4. Bring your own device
5. The cloud
All ve are interrelated, but all each has its own impact
on enterprises and MSPs who support them.
The following is our take on how can you evolve your
services and business model to reect this new reality.

The good news: managed

services are still lucrative.
The bad news: everybody
knows it.
The high margins of managed services are attracting
serious competitors from non-traditional areas. Big
companies with existing IT expertise and customer
relationships in the copier, A/V and telephony domains
are looking to tap in and access new, recurring revenues.
Its why the managed services eld is seeing a record
number of mergers and acquisitions. This convergence
trend means existing MSPs need to be ready to compete.

How much?
With an average gross margin of 60 percent, the protability
of managed services is too good to ignore.1

1 Walsh, Larry. Managed Services Tops Protable Models.

http://www.channelnomics.com/channelnomics-us/news/2368618/
managed-services-tops-protable-models. Channelnomics.com. May 28,2013.

You want to compete on value.

They want to compete on price.
With new MSPs aggressively commoditizing their services, incumbents are forced into the position of having to justify higher fees.
Thats where operational eciency comes in. If you can deliver
services more eciently, in higher volumes, you can aord to bring
your fees in line with the market and still enjoy strong margins.

Commoditization is here
Articial commoditization the self-imposed,
self-directed lowering of prices and prots
is rampant in the managed services community.2

2 The 2112 Group. Countering Articial Commoditization and Poor Pricing Practices
in Managed Services. 2011.

The market is on the move.

Literally.
The ubiquity of mobile devices opens up excellent
opportunities for MSPs: all those smartphones and
tablets need the same management and security
as desktops. Extending contracts to include mobile
devices allows for user continuity and demonstrates
greater value to the client. The MSP mindset needs to
evolve from managing devices to managing mobile
computing. When you can manage every single point
of contact for the end user, you deliver a complete,
streamlined service to your customers.

Device dominance
Cisco projects 50 billion connected devices worldwide by 2020. Morgan Stanley thinks it will be more
like 75 billion.3

3 Danova, Tony. Morgan Stanley: 75 Billion Devices will be Connected

to the Internet of Things by 2020. Business Insider.
http://www.businessinsider.com/75-billion-devices-will-be-connectedto-the-internet-by-2020-2013-10. October 2, 2013. in Managed
Services. 2011.

BYOD is the order of the day.

Todays mobile workers are device jumpers, moving from PC to laptop to smartphone to
tablet almost without thinking. For MSPs, this multi-device reality means greater complexity
and more applications. To stay competitive and current, Managed Service contracts need
to be more exible and include more devices than ever before while delivering 24/7 Help
Desk Support to ensure their customers end users have the professional assistance they
need, when they need it.

Youre on your own.

According to a global survey of CIOs, 38 percent of companies expect to stop providing
devices to workers by 2016.4

4 Gartner Predicts by 2017, Half of Employers will Require Employees to Supply Their Own Device for Work Purposes.
Gartner news release. http://www.gartner.com/newsroom/id/2466615. May 1, 2013.

All roads point to the cloud.

Business today happens in the cloud. Which means your
MSP practice needs to, too. Oering cloud-compatible
managed services will increase eciencies for both you
and your clients and keep your oering on the cutting
edge.

The office online.

A million customers signed up for Microsofts cloudbased Oce 365 application in its rst 100 days.5

5 Foley, Mary Jo. Microsoft: 1 million Oce 365 Home Premium

subscribers on board. ZDNet. http://www.zdnet.com/article/microsoft1-million-oce-365-home-premium-subscribers-on-board/. May 29, 2013.

Automation is the answer.

Automation of your services is the number-one key
success factor, oering a way to make your services
more ecient and more valuable. Control systems
reduce operational costs and labor time while allowing
you to deliver fast and eective IT solutions. Streamlining
your business with automated IT services gives you the
scalability to grow your customer base without compromising on service quality or protability.

SolarWinds N-able can help.

SolarWinds N-ables Automation Manager seamlessly
automates more than 95 percent of standard IT tasks. The
industrys rst codeless, customizable automation engine,
it reduces technical complexity and lets you scale rapidly
without adding to your IT infrastructure. You can manage
hundreds of devices and thousands of customers while
keeping labor costs down so you can grow your business
protably.

About SolarWinds N-able

Copyright

SolarWinds N-able is a leading global provider of complete IT

management, automation and MSP business transformation
solutions, including the award-winning SolarWinds N-able
N-central RMM and service automation platform. SolarWinds
N-able has a proven record of helping MSPs standardize and
automate the setup and delivery of IT services to achieve true
scalability. Thousands of MSPs use SolarWinds N-able solutions
to deliver scalable, exible, protable managed services to over
100,000 SMBs worldwide. With oces in North America, the
Netherlands and Australia, SolarWinds N-able is 100% channelfriendly and maintains strategic partnerships with Microsoft,
Intel, IBM, CA, and Cisco among others.

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