Next Generation MSPs: IBM's 5 Steps to Transformation

By IBM Guest Blog 1

Over 200 MSPs, ISVs, Resellers, System Integrators, and Distributors will gather at the MSP Summit (held at the IBM Edge conference in Las Vegas) to ask the question: What is a next generation managed services provider (MSP)? There is no one answer and everyone will have a point of view during the June 11-12 event, so the dialogue should be captivating and productive.

Two prominent IBM top executives highlight the agenda. Andy Monshaw, general manager of PureFlex Systems, and Deepak Advani, general manager of Cloud and Smarter Infrastructure, will share their thoughts about what it takes to be a next-generation MSP. Also, MSPmentor Editorial Director Joe Panettieri will host a panel of MSPs. Then Robert Faletra, CEO of UBM Channel, will share marketplace insights that impact every channel player involved in managed services. 

My prediction is that they will share insights about how MSPs are moving away from commodity infrastructure and basic managed IT, and into higher, innovative business areas enabled by the cloud. I’m referring to areas like marketing, human capital management, finance, and more.

Continued Transformation

The IBM company has a legacy of shifting to higher value areas, whether the shift to tabulating machines from weight scales or enterprise computing from personal computing. It’s this commitment to change and evolution that I think many MSP’s need to adopt.

I speak to MSPs every week, all over the world. One thing they all have in common is their desire to please their customers while protecting their existing, often personal, investments in their business. They want to know how to grow profitably and differentiate themselves….but how?

There’s a vertical or industry angle, where focus can be on healthcare, finance, manufacturing, gaming, and more. There’s a lot of merit to that type of focus and I’ve seen how service providers can create lasting, competitive differentiation based on this expertise. However, many other MSPs will gravitate towards functional or horizontal areas like supply chain, finance, supply chain, and more.

Those MSPs will also do well, although I’d argue while their expertise is steeped in good areas, it’s not lasting and not high-value. It’s typically a matter of time before the competition — and for MSPs there’s thousands of competitors — catches up. The high value stuff comes when you as a provider are able to attack the business processes of your customers, and not only shave costs, but instead innovate how they compete.

What do you think is a next generation MSP? Come to the IBM Summit and listen to your peers and industry experts share their point of view. Or network with the thousands of clients at IBM Edge and ask what they think and how MSP’s can play a bigger role in their business. Registration fees are waived for MSPs, just submit this nomination form!

Five Transformational Moves

For now, here are five immediate steps to start transforming yourself to a next generation MSP:

1. Assess how your company is different from the MSP down the street. Then ask where are your profits based, will you have to compete on price in a few years, are starting to compete on price now? Light the fire.

2. Take your existing service lines into the cloud. Managed storage is an easy example, create a Disaster Recovery service or Business Continuity capability. No investment appetite? Go SaaS to match your cash flow. Your clients are ready for cloud, are you?

3. Start transforming your salesforce to sell cloud solutions, to new buyers like CMO, CFO, and CPO executives. They now control 50 percent of the enterprise IT spend. Sell offerings that minimize your risk and compliment your service catalog, like white-labeling IBM SmartCloud for Social Business to compliment your RMM and Patch services.

4. Invest in next generation systems and storage that enables you to spin-up client applications and new services in the cloud minutes, not days. Ensure those systems are based on software so you can be flexible and autonomic, adapting your expense equation to client workloads and business cycles.

5. Partner with ISVs. Think about the sea change that every on-prem ISV is facing. They need help, you are their trusted advisor along that journey. Your reward will be further differentiation based on their customer base and an annuity stream from the services you provide them.

But don’t end your efforts there. Join us at IBM’s MSP Summit to get ahead of the MSP innovation curve.

Tim Tsao is MSP marketing leader for IBM General Business Midmarket. Guest blogs such as this one are part of MSPmentor event engagements.