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CompTIA: strategic MSP role among top trends in managed services

CompTIA's latest Trends in Managed Services study indicates a higher adoption rate among customers who cast MSPs in a more strategic role.

There's a lot of advice for managed service providers (MSPs) in CompTIA's 4th Annual Trends in Managed Services study released today.

The survey queried 350 IT and business professionals in the U.S. about their experiences, decision factors and usage trends when it came to utilizing MSP firms. The first two noteworthy trends in this year's survey compared to last year's, is an uptick in adoption of managed services at respondent's firms and, the increasingly strategic role of MSPs at end user organizations.

But the most valuable takeaway information for MSPs was derived from the application of the Kano model by CompTIA researchers, according to the organization. The Kano model was used to categorize and prioritize customer perception of a product or service. In particular, by applying this model to various questions about managed services, end user responses were weighted as to which service attributes, i.e. 24/7 support, stellar network uptime, responsive/friendly customer service or easy to understand and predictable pricing, for example, were considered basic table stakes, nice to have but wouldn't pay extra, or great to have and would pay extra.

According to Carolyn April, senior director of industry analysis at CompTIA and report author, this was the first time that she used the Kano model in the Annual Trends in Managed Services study. "The results were quite interesting in terms of what end users consider desirable in a managed services engagement," she said.

Getting to know you

The latest Annual Trends in Managed Services study looked at small, medium and large companies from a range of industries, according to CompTIA. The report referred to small end-user companies as those with fewer than 100 employees and larger organizations as those with 100 or more employees.

According to the 2015 report, 68% of respondents used an outside IT firm to manage one or more of their IT functions or to provide implementation, integration or other IT project work. April said that about 50% of these respondents used an MSP -- this compared to roughly three in 10 firms said to have used an MSP in the 2014 report.

"The most recent figures indicated a more normal rate of adoption compared to the surprisingly tepid numbers from last year's research," said April.

There's more good news for MSPs: 50% of respondents indicated that they would consider using an outside IT firm in the next two years, another 15% are currently evaluating an outside IT firm, and 2% plan on using an outside firm in the future.

The greater use of outside IT firms by businesses was linked to survey results that indicated that more than half of respondents are "very familiar" with the concept of managed services, while another 4 in 10 said they were "somewhat familiar" with managed services. In the 2014 report, only 36% of respondents said they were "very familiar" with managed services and 47% noted some familiarity with managed services.

On the other hand, 31% of the respondents in the 2015 study said they had no plans to use an outside IT firm in the next two years compared with 7% in the 2014 report.

While the study author couldn't say for sure why more companies won't be using IT firms, one factor could be an increased use of cloud offerings that these businesses are procuring themselves.

More strategic role

Historically, companies turned to MSPs to save money and/or cut costs versus having in-house IT staff. While customers are still interested in lowering their IT expenditures, that's not their top consideration for adopting managed services, according to the latest survey results. According to the CompTIA report, the No. 1 reason companies turn to MSPs is to improve efficiency and reliability of IT operations.

"This really speaks to the value that the role of the MSP holds in the mind of the end user," said April.

The role of the MSP has become more strategic: Respondents cited the ability to enhance security and compliance and a proactive approach to maintenance as the second- and third-ranked reasons companies work with MSPs. This year, return on investment/cost savings fell from the No. 2 spot in the 2014 report to the No. 4 position.

Expectations

According to the CompTIA Annual Trends in Managed Services study there are some things that small and larger organizations expected in a basic MSP offering, such as easy to understand and predictable pricing and responsive and friendly customer service. Providers don't earn extra points with their customers for offering what users expect in a core offering, but users will penalize them for failing to provide at the expected level of quality.

Surprisingly, easy-to-read service-level agreements (SLAs) and a single point of contact fell outside of what's expected in a basic offering by both small and larger organizations -- meaning that respondents would be willing to pay extra money to get these things. Similarly, proactive maintenance and rapid response or on-site service also fell out of the scope of what's expected in a basic service.

So what does this tell MSPs? April wasn't sure, but suggested a couple of possibilities.

"To me, these [attributes] are core to an MSP offering. Are MSPs not selling themselves that way? That's a possibility. Or, are end users not perceiving it that way?" she said.

When it came to SLAs only 38% of respondents cited response times as a top item to be quantified and guaranteed within the SLA compared to 55% in last year's survey. Viewed through the Kano model, the 2015 drop in percentage could be based on the premise that companies consider response time a basic attribute and not a bonus feature.

At the same time, 62% of smaller firms cited 24/7 support -- a fairly basic expectation of a MSP -- as a top SLA priority compared to 49% of larger firms, according to the report.

Food for thought

There are a number of takeaways from the CompTIA report that could benefit MSPs.

For example, a sizeable number of organizations aren't using MSPs, either because they're content with their IT as it exists or they have reservations about working with an MSP. Either way, April contends that MSPs who reach out to this non-MSP user group with positive messaging may find some new clients.

In fact, according to the CompTIA survey, this non-MSP user group shouldn't be considered dead and buried. About 4 in 10 larger firms said they researched managed services or had a formal assessment done by an MSP -- double the number compared to smaller firms.

At the same time, 47% of respondents said that they were contacted, in the past two years, by an MSP who offered to do an assessment. Eighteen percent of this group accepted the MSP's offer while 29% declined.

Some other key report findings:

  • MSPs must deliver an experience, not just a product or service as consumer apps and customer experience increasingly dominate the IT department's mindset.
  • MSPs must bring specific expertise to the table as the customer mindset extends beyond managing devices towards managing and monetizing information, or data from on-premises, cloud and social systems.
  • MSPs must go deeper on vertical market software-as-a-service (SaaS), compliance and security mandates.
  • Core infrastructure management remains an opportunity as midsize businesses add headcount, devices and remote locations.
  • While CIOs remain the gatekeeper, additional CxO voices influence IT decisions.
  • MSP face time with customers remains a requirement so an MSP's physical location is important.
  • SaaS, big data and application management are important skill areas for an MSP -- if an MSP organization doesn't possess skills in all of these areas they should expect to share an account with other providers who fill in the missing pieces.

Next Steps

Learn how to explain managed services pricing to customers

Gain insight into marketing MSP services

Read about MSPs' business transition

Dig Deeper on Managed service provider (MSP) business model

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