Managed Services 3.0
I recently had the privilege of conducting a podcast with Nick Lippis of the Lippis Report regarding the evolution of the managed services market. Specifically, we discussed how the market is entering a new era, which I refer to as Managed Services 3.0.
Having been a part of the managed services market for the past 25 years, I divide its history into three stages.
In the 1980s, the newly emancipated Regional Bell Operating Companies (RBOCs) formed as a result of the AT&T divestiture were the primary providers of managed services. While they called their offerings managed services, they were really outsourcing arrangements aimed at their largest corporate customers. These highly customized services were part of a larger portfolio of carrier services.
In the 1990s, a new breed of independent service providers emerged offering a new generation of specialized managed services to small- and mid-size businesses (SMBs). These standalone managed service providers (MSPs) leveraged third-party tools and their own homegrown systems to deliver highly standardized ‘point’ services aimed at addressing their customers’ desktop, network, storage, security and other ongoing management needs.
Despite plenty of hype about the managed services market opportunity, few of the MSPs founded in the 1990s survived the demise of the dot.com era. We can spend hours dissecting all the reasons why managed services failed at that point, but they can be summarized into three areas,
- Immature enabling technologies
- Immature marketing strategies
- Immature management skills
Improvements in each of these areas, plus an economic climate which is driving companies of all sizes to seek ‘out-tasking’ alternatives to managing their own IT operations, has produced a new opportunity for managed services to flourish.
Managed Services 3.0 represents the confluence of three important forces,
- More powerful and cost-effective enabling technologies
- More compelling marketing messages and effective marketing tactics
- More committed leadership and sophisticated management
MSPs are learning how to leverage SaaS-empowered enabling technologies to build and deliver their services. They are learning how to sell the right solution to the right IT/business buyer. And, MSP executives are learning about the operational and organizational requirements for building a successful managed services business.
Combine these with the growing receptivity among IT/business decision-makers within companies of all sizes to accept and adopt third-party services to better manage their IT operations, and you have a fertile market opportunity for MSPs.
Click here to hear my conversation with Nick Lippis regarding Managed Services 3.0. Visit THINKstrategies’ Managed Services Showplace to find more insights about these trends and information about the growing array of companies offering managed services.