What value does your company add? It’s a perennial business question, one that channel firms face each and every day in interactions with customers, vendors and other partners. In this era of cloud computing and ongoing business model upheaval, everyone is looking for a way to stand out, especially to the customer. If you can’t answer the fundamental question – Why do we matter? – your business is at a disadvantage.
The managed services model is one example of a channel business that — in theory — adds great value and plenty of upsides for customers. Despite the raft of benefits, managed services adoption is less than robust among end-user organizations. CompTIA’s recent study, Third Annual Trends in Managed Services, finds that just 3 in 10 end-user customers use managed services for some or all of their IT needs. That’s just 30 percent — a paltry sum, considering the model has been touted for a decade as the channel’s savior against margin erosion and product reselling obsolescence.
A number of factors have dampened managed services adoption, with a key one falling at the foot of the channel itself: the inability to simply and clearly explain the value that’s being added. To truly add value, you must be able to educate customers about what you do and craft that message to reflect the customer’s business needs. Show them how you’ll creatively solve their problems and/or drive financial benefits. An effective message drives adoption rates and raises awareness. Case in point: CompTIA’s study finds satisfaction rates are quite high among end-user organizations that use managed services.
Hurdles to Clear
The ambiguity of managed service provider may have something to do with the low adoption rate. An executive in a law firm or manufacturing shop who hears MSP or managed service provider won’t intuitively know what you do, which is why branding and messaging are essential. Marketing activities have never been a strong suit for many channel firms, but that’s got to change. In the years ahead, as customers look to a model for IT that operates with more predictability in pricing and as a service, a clear marketing message will become even more important.
Another major hurdle is that certain customers will always have objections to using a third party for their IT needs. Wariness to outsource in general is holding people back, according to the CompTIA study, while others report an existing satisfaction with their current internal IT staff.
Those objections don’t change the fact that managed services would appeal to many more customers if MSPs could get out a clear message about what they do and the value they add. The market for managed services is so far from saturated that one can’t help but wonder if it’s time for the channel to go all-in with the model and lead with it as their value-add, over and above other lines of business. In other words; double down. Couple that with sharp messaging around benefits and the channel just might stave off an unfortunate long-term plateau of the market.
CompTIA members can read more about MSP trends in CompTIA’s Third Annual Trends in Managed Services. Not a member? Click here to learn how you can join the thriving community of IT organizations.
Carolyn April is CompTIA’s director of industry analysis and market research.
