Is 2024 the year of the Managed Service Provider? It’s clear that there are lots of changes in the sector. After acquisition, Broadcom ending VMware channel programme has changed the tech stack for many MSPs. But, despite these forces, the MSP business model isn’t undergoing a major change. The fundamentals are still the same. Driven by investors, shareholders, business owners and ambition – the successful MSP has to be as fit for purpose as ever before. Three main factors emerge:
Productivity. An MSP depends on its team to deliver excellent services and delight customers. And in 2024, staff retention and developing key talent has never been harder. Fundamentally, an MSP needs to be getting the most out of its employees. So where productivity becomes a key board metric, MSPs need to invest in creating systems and workflows that minimise toil and automate where possible. In the first instance, select tools that most closely fit your business. Customisation kills productivity, requires maintenance and creates technical debt. Secondly – explore what synergies you can get by integrating, connecting and synchronising datasets between tooling. How can you automate data extraction, reporting, and analytics?
Customer Satisfaction. Customer retention is a huge deal in 2024. In an earlier post, I introduced the context around competition, commoditisation and customer expectations. Consistently delivering excellent services can keep these eroding forces at bay. Further, in an increasingly competitive market where customer acquisition is difficult – the imperative for referrals and high NPS puts customer satisfaction as a strategic board level directive. Build trust with your customers. How are your levels of communication? Are you open and reliable in how you communicate successes and failures?
Margins. The bread and butter of an MSP business based on cloud and SaaS delivery is to maximise profit margin. A wise prophet once said ‘where there’s mystery, there’s margin’ – and this paradigm fits sweetly in the managed services model. To improve margin means increasing the top line through value, or decreasing the bottom line through efficiencies. Value selling is an imperative for all businesses to differentiate and build better customer relationships. Start by measuring your successes, in your customer’s language. Where are you relevant? How would you tell your story to the CEO? Equally, there are still signifiant efficiency gains to reduce bottom line for many businesses. The market is full of innovators and disruptors. If you can account for the cost of change, could you reduce costs of your basic operations?
There still remains, even in 2024, incredible opportunity for MSPs to radically improve their fundamentals. It’s evolution. Revolution can wait for another day.
About Panoramic Data
We provide solutions to MSPs – that’s all we do. We are a LogicMonitor partner, with expertise in observability, operations automation, and data management. With customers across multiple continents, decades of know-how and software engineering expertise – we become trusted partners for growth. Speak with one of our team today