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Why MSPs should care about Microsoft 365 Lighthouse

With Microsoft announcing its new RMM tool, Dave Sobel breaks down how this affects IT channel companies and how they could respond to ensure their business stays ahead of Microsoft.

Dave Sobel is the host of the podcast The Business of Tech and co-host of the podcast Killing IT. In addition, he wrote Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business.

This week, Sobel examines the news around Microsoft announcing its own RMM tool called Microsoft 365 Lighthouse and how this could impact IT channel companies. Microsoft is yet another vendor, following in the wake of HP and Lenovo both expanding beyond simply providing enterprise hardware.

Transcript follows below.

This week, Microsoft announced their new remote monitoring and management (RMM) tool, Microsoft 365 Lighthouse. Think about that -- Microsoft now has an RMM.

This comes on the heels of another announcement this week, with T-Mobile including Microsoft 365 in their business packages, as well as expanded staffing for SMBs. Previously, HP has expanded their successful enterprise offerings that included hardware and services to new offerings for the SMB. And, Lenovo has their similarly Microsoft-based managed services offering.

The two are all linked. The big providers are coming for pieces of your existing businesses. Yeah, let's talk about this, and I'm starting with 'The vendors are coming for us.' As a student of history, this is not the first, nor the last time of this.

In the bygone days of the IT channel, companies made money by being sellers of hardware -- to significant profit. In those bygone days, you could simply sell someone a computer and you could make a lot of money on that just by being the seller. Really. Forty, 50 points of margin.

When that started to go away, you would sell services around the computer itself -- particularly repairs. But then, the vendors came for that too, selling their own repair services and care. So, you focused on other services, like monitoring and management and help desk. Well, they are coming for those too.

Analysts consider 'The vendors are coming for you' as the number-one threat

They're wrong. The reason -- they've always been coming for you, and you stay a step ahead of them. That's been true for 30 years. It'll be true for another 30 more. If it's a constant 'threat,' then it's just the nature of doing business, and so it's not really a threat at all.

If the threat of flooding is impacting your building, you don't bemoan the constant threat, you just build homes that anticipate it.

Now that the non-threat is out of the way, I want to tell you: This changes the game. But you have plenty of time. What do I mean by this? What most technology services companies do is look at the current release and decide if this is valuable to them now. This makes sense -- you're an assembler, not a builder.

Assemblers take technology components and put them together to make them form something bigger. Don't think I'm being dismissive -- this is a very important role, and companies all along the value chain need this capability. The iPhone requires both skills -- assemblers to make the physical device, builders to invent the software (and in Apple's case, now envision and create the silicon itself).

Most providers are assemblers -- and assemblers look for components off the shelf, and thus they must be there right now. If it's not there now, it's not useful. You can't assemble on future promises. The trick is that you have to be assembling now. And positioning to where the market will be.

Thus, this isn't a threat today. Your current RMM solution is exactly the right tool for now. It's also probably the right tool for tomorrow. Is it the right tool for next year? Or two years from now? That's the question to be thinking about.

Those who are debating features of the product are missing the point. My favorite comment was 'If it doesn't have PowerShell, I'll never use it.' Oh really? How's that PowerShell working out for iOS devices? Android? IoT devices? Chromebooks?

Don't get me wrong, I think PowerShell is powerful, useful and relevant. And I do not predict Microsoft will phase it out any time soon. But this statement is like saying 'I'll never stop using MS-DOS' or VBScript. Sure, you will. More importantly, these will fade into the background.

The future of management is that you don't need to script it yourself

Instead, you focus on configuring management policies. You can see this in software development trends -- serverless and codeless compute are the direction. You manage fleets of other devices not by writing scripts to control it, but by configuring policies. Which is exactly the tool Microsoft has built.

Intune is this policy management tool, and even RMM providers get this -- SolarWinds MSP has ceded the space Intune has carved out and will integrate with them rather than build a competing product.

The question is all about timing. Don't debate the current feature set -- you're looking to see where this product fits into the larger plan, particularly from Microsoft -- a company who can afford to play a long game. Remember, they just paid $7 billion in cash for a gaming company to play the long game for subscriptions in their Xbox unit. They can afford to invest here and take their time.

On Patreon, Amy offered that she thinks this is an internal tool -- and she might be right. Microsoft is already working on their Cloud PC project and would certainly love to offer a fully managed endpoint. To do so requires a tool, and what better way to develop it than with their partners. They won't be single channel, as they expect customers to consume as they want, either with a partner, or direct from Microsoft, so this makes sense. Even if they don't use it themselves, this framework for the system requirements still is logical.

I saw an objection saying 'Oh, this is just delegated access which we could do 80% of this already.' Ah, my dear sir, you don't get it.

You need Microsoft. You can't escape them. They're Microsoft 365, they're Azure, they're all the parts you need. And if they offer the things you can do already and remove one more tool and vendor, they just made things easier.

Remember, they need a tool too -- because they're launching their own management service. They are going to build it, and they're happy to sell it to you to monetize it. And how do I know Microsoft is building it? Well, besides the job listings for Cloud PC I've reported on the show, and the fact they already offer it in the enterprise, I can see that in the moves from Lenovo and HP.

I'll reference now the video I released called 'If I were to start an MSP today.' The idea -- your new competitor isn't built the way you are. They don't have your legacy. And without that legacy, they are going to look a lot different.

A new competitor isn't thinking about all that legacy stuff. They aren't dragging that along with them. They don't care about 'sunk cost.' They aren't investing in tools that were created 15 or 20 years ago and dragged along.

They are ahead of you on the race to the future. And they love the idea of building businesses on top of the ecosystem the large vendors are bringing to them. They're happy to partner and build on top of that future.

I'm not saying to abandon any of your legacy business

In fact, I think you are stronger for having it. What I'm saying is that you need to make sure it's not your core value. If you think you're going to compete on the same service you've been delivering for a decade, you're not ready for the future.

Just don't think what you're doing now is going to be the same -- nor have the same requirements. You probably bought an RMM because it monitored for hard drive failures -- who worries about that anymore? Remember when "cleaning out temporary files" was a thing? The problems these core tools were built to solve are problems we don't think about anymore -- particularly on endpoints.

This is the action I want technology services providers to take. Deconstruct your need and think about things in functions rather than technology. You don't need PowerShell -- you need the ability to make changes to system configurations. You don't care about Windows or iOS -- you care about endpoints.

You're moving to higher ground to defend against the flooding. Moving up the stack means also deemphasizing those services you built your business on because the vendors coming for that business, like they always have. It's not new; it's the slow-moving rise of the tide.

Do you agree or disagree with my argument?

Now, you may be screaming 'Dave, you're all wrong.' Great. You have your own opinion. Set your course. Make your own bet. You just can't complain later that you were surprised. The frog in the pot didn't feel it as the water slowly, slowly, slowly got hot.

About the author

Dave Sobel is the host of the podcast "The Business of Tech," co-host of the podcast "Killing IT" and authored the book Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business. He owned and operated an IT solution provider and MSP for more than a decade, and has worked for vendors such as Level Platforms, GFI, LOGICnow and SolarWinds, leading community, event, marketing, and product strategies, as well as M&A activities. Sobel has received multiple industry recognitions, including CRN Channel Chief, CRN UK A-List, Channel Futures Circle of Excellence winner, Channel Pro's 20/20 Visionaries and MSPmentor 250.

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