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The managed services market: MSPWorld panel looks back, ahead to 2016

At MSPWorld 2015, a panel discussed current trends that are shaping the managed services market and what MSPs should focus on in 2016.

LAS VEGAS -- The fall MSPWorld 2015 conference opened on Monday, with a panel discussion that touched upon various trends shaping today's managed services market. Defining factors included opportunities in security and compliance services, as well as the fallout from this year's controversy surrounding former Secretary of State Hillary Clinton's server issues.

Led by MSPAlliance CEO Charles Weaver, the panel of experienced managed service providers (MSPs) featured Chris Parry, CEO of Enkompas Technology Solutions, an  MSP based in Pittsburgh; Scott Barlow, vice president of sales at Reflexion, an email security provider in Burlington, Mass., that was acquired by Sophos Ltd. earlier this year; Les Roach, enterprise account executive of cloud and managed service providers at Lenovo; and Celia Weaver, co-founder and president of the MSPAlliance, based in Chico, Calif.

Each of the panelists noted a rich array of opportunities for MSPs to seize in the managed services/cloud landscape.

For Parry, MSPs are in a good position to grow their businesses if they can vary their services and build trust with their customers. "We're in the Pittsburgh market, but we're seeing outside of our own … geography [that] the more varied services that you're able to provide and [the more you] develop trust with the customer base that you have, the more you have the opportunity to grow," Parry said. "I think that the more important you make yourself relationship-wise … it will dovetail nicely off of all of the services that you provide and the product that you provide."

While the managed services market is maturing, many channel firms remain unsure about how to differentiate their managed services offerings -- even if they should make the transition from break/fix services into an MSP business model, Barlow said. He sees mature MSPs differentiating themselves by delving more into compliance work.

Roach agreed, saying that MSPs have a strong opportunity right now to differentiate themselves around regulated markets. He also pointed to opportunities presented by the cloud, citing a survey published last week in which 60% of Amazon's customers said they would consider using an MSP to help manage public cloud use.

Celia Weaver echoed the other panelists about the size of the managed services opportunity today, but she said MSPs have some industry-wide problems they need to help resolve. "We do need to address the maturity level of some MSPs … Unfortunately, it's those bad eggs that get all the press, so everybody paints us with a broad brush and says, 'Well, look at this industry. They haven't grown up.' … So we still have to do some education, in my opinion, especially when it comes to transparency," she said.

Throughout the discussion, the panel returned several times to the negative mainstream attention that managed services received in the aftermath of the Clinton controversy. "The fact of the matter is that our industry is now being very visibly discussed," Charles Weaver said. "The question is, how do we control that conversation in some way?"

According to Celia Weaver, transparency is the issue of the day for MSPs. "As an MSP builds out its network of partners, they have to be very careful about who those partners are. Who do those partners have as partners, as well? Where does the data go? Where does it reside? How is it backed up? How is it stored? How is it secured? Sometimes, the MSP doesn't have enough clarity into that to give to their customers," she said.

Security is on the minds of many of Enkompas' customers, Parry said. "Our customer base is now looking [at security risks], because that's what's hitting the front pages. And they're looking at their own world and how they can evolve, and how they can do that securely. … We are being asked more sophisticated questions."

Our customer base is now looking [at security risks], because that's what's hitting the front pages. And they're looking at their own world and how they can evolve, and how they can do that securely.
Chris ParryCEO, Enkompas Technology Solutions

Parry suggested MSPs can strengthen their positions with their customers by taking more of a consultant's approach, representing a wide range of offerings with their partners.

In terms of email archiving, one of the lessons to come from the Clinton controversy is that MSPs need to "assume that someone is watching your email," Barlow said. MSPs need to encrypt the data both in motion and at rest, deploy disk encryption and email encryption, and work with vendors to ensure privacy, he said.

Charles Weaver prompted a discussion about what MSPs should be considering as they wrap up calendar year 2015 and start planning for 2016.

"I think we need more agreed-upon standards and principles that we all follow as an industry body," Celia Weaver said. She added that MSPs have to shore up their marketing messages and make that marketing friendlier to end users in 2016.

Charles Weaver recommended that MSPs re-evaluate everything as they develop their 2016 plans, including who they will have on their line cards and what services they will deliver.

Barlow agreed and added it's important for MSPs to increase their network security posture moving forward.

Next Steps

Read about 10 mistakes to avoid in an MSP business model transition. 

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Learn how MSPs can optimize their business mix.

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