The MSP (managed service provider) channel changed a lot during the first 13 or so years of the new century. But, in the last 3 to 4 years, I feel that it has stood still. In 2005 “industry experts” would say that if you didn’t become an MSP by 2008 you wouldn’t be in business by 2010. That wasn’t true. Today some are saying if you don’t become a CSP (cloud services provider) you will be out of business by 2020. I don’t think that it is exactly true either but it does hold some validity.
My personal belief is that the MSP model, as we know it, is over and done with. The days of selling managed services is a dinosaur on its way to becoming a fossil. There still is a need for outsourced IT service providers, that will never go away. But, the small service provider needs to evolve or they will go out of business.
You may be confused as to why I think the IT service provider needs to evolve. Especially if your business is doing fairly well and you have good customers. I understand all of that and, as nice as that is, I have to ask; are you evolving as a business or are you just doing the same thing as everyone else? I’ll explain my thinking further.
A couple of weeks ago, a friend who owns a computer / IT service company sent me a text asking for my advice. To preface this, I must tell you that his current company is primarily a “break/fix” model which has a good name in his community, good customers and is growing. He had an idea to open a second business to market his MSP solutions to businesses. Not surprisingly, I asked him why the hell he would want to do that. He explained that he couldn’t get the recurring revenue model going through his current business so he wanted to launch this second company for just a year to see if he could get it going that way and then bring it all back under the current organization.
There is much more to this story but at the end of the discussion, I told my friend he would be doubling the work for himself and for just one year it wouldn’t be worth it. The investments in the time and finances required to run 2 operations aren’t necessary when he could just restructure and offer the services that his market not only needs and wants but will pay for. Despite my advice, I know my friend will do whatever he wants. So, I told him to let me know the name of the new company.
I find that this is the mindset of the typical MSP and honestly, it blows my mind. I have spent many years trying to help MSP owners think outside of the box and become actual business owners rather than technicians. It’s the same old story over and over again. They continue to look for the magic pill of success. If I had a nickel for every time I witnessed an MSP owner hop on the band wagon of the newest craze thinking they would hit the big time, well, I’d have a lot of nickels.
In my opinion, the IT channel is not evolving, if anything it is devolving. It seems that everyone is still going after the same dollar that they were chasing 10 years ago. It makes me think of, “the blind leading the blind”. Or, as Forest Gump so eloquently said, “Stupid is as stupid does”.
It’s not only me that thinks this way, industry experts are saying the same thing. Earlier last week I saw a tweet from Larry Walsh CEO and Chief Analyst of The 2112 Group where he stated, “the end of the channel, as we know it, is nigh.”
Time to get off my soap box about the IT channel and get back to my new company. I am so happy I made the decision not to work with any MSP or technology companies. I get to sit back and shake my head at the craziness of the entire industry.
After more than 25 years in the IT industry, I bid the stupidity and ignorance a fond farewell without so much as a glance over my shoulder.
Happy Holiday and all the best for success.