Paul Bates is director of sales for EMEA at OpsRamp, and has 20 years experience in the carrier and managed service provider (MSP) space, including VP of Managed Services for a large, multinational systems integrator and MSP. We spoke with Paul about recent changes in the MSP sector.
New Ways to Measure Profitability as an MSP
The modern MSP, which now both complements and competes against large CSPs such as AWS, GCP and Azure, needs new profitability strategies, such as:
- How do I increase revenue faster than I add staff to operate contracts, given the cost of acquiring new skills?
- How do I innovate client contracts to offer a better service and increase the profitability during the contract?
MSPs should focus on these profitability metrics:
- Company profit: operating cost of delivering services will be key
- Profit per contract: the measure of profitability for each contract
- Profit per service line
OpsRamp: What technical expertise is imperative for MSPs / CSPs?
PB: Moving from a focus on in-house services to a hybrid and multi-public cloud model is a challenge in its own right: hiring, training and retaining these skills will be costly and challenging [see the OpsRamp Cloud Skills Report]. The second impact of multiple clouds is multiple toolsets. Managing these tools is one challenge. Managing the interdependencies and integrations of these tools and offering business context to clients is a much greater challenge. MSPs need to use technology to drive efficiency—be that fewer tools or using the tools to drive positive service and business outcomes.
OpsRamp: How can MSPs tailor services to business stakeholders?
PB: Partnering is critical. As the complexity of client platforms and business objectives increases, MSPs will have to create ecosystems and work alongside partners with specialized and complementary capabilities. Enterprise customers are looking to capture business outcomes, which entails moving from SLA or performance and availability metrics to the measurements of a service or application. Business context and transparency is becoming a must-have quality for service providers.
OpsRamp: How is Covid-19 affecting MSP strategies?
PB: Covid-19 will likely affect the services which customers demand and the operating model of the MSP itself. There are several common themes that have become apparent for enterprise needs now and over the next several months. These include secure and reliable remote access capabilities, high-performing collaboration tools, the resurgence of BYOD which requires strong infrastructure monitoring and security practices, and the expansion of public cloud and SaaS. The push for digital transformation and the demand for cloud-based services accelerated during and after lockdowns and many pundits expect this trend to continue through the remainder of 2020 and beyond. MSPs will need to emphasize these areas of expertise in their offerings immediately and demonstrate to customers how they can deliver a secure, high quality, 24x7 service in a distributed, remote work environment. They will need to deploy tools that give their operators complete visibility into the customer environment and provide an audit trail. Compliance will be critical and contractual.
OpsRamp: What will be the greatest change to how MSPs work?
PB: Given the highly competitive environment with large MSPs and CSPs, using automation to deliver services will be critical. If an MSP is not investing in technology such as AI to automate repetitive tasks, it will be very difficult to increase profits moving forward. My advice to every MSP today: use your finite people skills to differentiate and innovate, not operate systems that a machine can do with equal or better outcomes.
- Carousel Industries Saves on Operational Costs with OpsRamp
- New Mandates for Managed Service Providers
- New Rules For MSP Survival