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Managed Service Providers

Our January publication of the Channel Facts

  • Managed Service Providers

 

Service providers who provide extended services to the customers in the areas of infrastructure, security or applications are described as Managed Service Providers (MSPs)


Managed service providers are very much in trend at the moment. Of particular interest is their know-how of the business processes and sustainable customer access. Since autumn 2012 MSPs have received a considerable number of "requests for collaboration" - especially from software and hardware IT vendors. Many IT vendors have launched new partner programs specifically aimed at MSPs or expanded existing programs to include promotional possibilities.


COMPRIS researched the topic of managed service providers in order to find out how they are perceived in the market place.  We also wanted to find out how MSPs perceive themselves and what kind of offers do they focus on. Which business model is more successful? What kind of software and hardware services do they cover?

The term managed service providers is primarily used by IT vendors

COMPRIS has investigated the topic by analyzing approximately 2,000 IT service companies.  The results of the analysis show that approximately 500 VARs offer ‘managed services’ even though they do not consider themselves managed service providers.


IT service providers who offer managed services refer to themselves for the most part as a consultant (73%) or as a technology solution provider (54%). 42% use the term service provider and another 36% describe themselves as a system integrator. 23% see themselves as VAR, 14% as a software company.

 

Chart 1: Company classification, multiple choice

Chart 1: Company classification, multiple choice

 

Focus & services of the Managed Service Providers

Service providers focus equally on all areas of managed services: 83% focus on services, 82% on hardware and 80% on software. In the area of services MSPs primarily offer consultation services (43%) and support services (30%). The cloud services follow with 27% and project conception services with 25%. 15% of MSPs offer project management services and 12% offer hotline support.

 

Chart 2: Managed services offered by service providers, multiple choiceChart 2: Managed services offered by service providers, multiple choice

 

MSPs‘ focus in the areas of hardware and software

In the software field the MSPs focus on operating systems (59%) and backup / disaster recovery (53%). Security solutions also play an important role (50%). They are followed by database solutions (43%) and communication solutions (38%). Furthermore 24% of MSPs focus on risk management, 22% on ERP systems and 21% on CRM and standard or user software.  17% of MSPs offer email and  file archiving whereas 14% offer endpoint security and 10% offer business solutions.


Other software services that are offered by managed service providers include:   

•    Server virtualization (7%)
•    Content or document management systems (7%)
•    DLP Data Lost Prevention (usage and  & retention of confidential information) ( 6%)
•    Network solutions (e.g. NOVELL) (5%)
•    System management (servers) (5%)
•    Desktop virtualization (5%)
•    Software distribution (endpoint management) (4%)
•    Knowledge management (4%)
•    Middleware (3%)
•    IT service management (1%)
•    Storage virtualization (1%)

 

Chart 3: MSPs‘ software portfolio, multiple choiceChart 3: MSPs software portfolio, multiple choice

 

In the area of hardware MSPs focus on servers (73%) and storage (53%). Furthermore the area of network components play an important role (34%). This is followed by monitors / displays (20%) and  printers (19%). Tablets / PCs / clients, webcams and telecommunication systems account for 16%.

 

Chart 4: MSPs‘ hardware portfolio, multiple choiceChart 4: MSPs hardware portfolio, multiple choice

 

 

Conclusion


The result of our analysis shows that the number of IT vendors in the area of service-based IT services is largely overestimated. The portfolio of IT vendors is diverse and service-based services are not the main focus for the majority of service providers. On closer examination the number of service providers that can be classified as "managed service providers" in the traditional sense is not more than 150 of those surveyed. The main characteristics of MSPs are excellent customer access and as a result good customer loyalty. In addition MSPs possess an excellent knowledge of technical and process-based business topics.

 

The results of our analysis also show that it is of great importance for IT vendors to develop VARs and system integrators so they can become managed service providers. It seems however that not all the partners are fully aware of the possibility of becoming a managed service provider. According to the results of our web analysis only about 500 IT service providers offer managed services in different areas.

 

As things stand today the service provider market is still very fragmented. Most service providers are focused on business needs and offer "on demand" solutions. However the consolidation process is in full swing at all levels.
It can be beneficial to work together with service providers. However, there is an expectation on the part of service providers that IT vendors need to show them a clear benefit if they are to cooperate with them. Thus, service providers show that they are immune to traditional partner programs and models.


Currently we are researching  the following topics:


- Training:  What motivates partners to go through the certification process? What kind of training do IT vendors have to offer to meet partners‘ expectations and to cover their needs? What kind of training is not offered by IT vendors that is considered to be important by partners?

- Cloud & Security