Managed Services: How Much Market Upside Remains?

ov_logo_blueonWhite
by || 04/13/2011

Sometimes I worry about the managed services market. Worldwide, I suspect roughly 1,500 MSPs are really executing well. Perhaps another 15,000 are moving right along — doing well but not exactly firing on all cylinders. And in North America alone, there are 70,000-plus VARs and resellers that are evaluating a range of options — managed services, cloud, IT project work, and so on. My key question: Is there still upside in the managed services market? Are more resellers still coming in? I found the answer earlier this week at the Synnex Varnex conference in Boston, Mass.

During an MSP-centric workshop on April 10, Synnex rolled out a freemium managed services strategy that involves close working relationships with Level Platforms, Axcient, Intronis, Reflexion and Symantec. Roughly 30 Synnex Varnex channel partners attended the workshop. Some were seasoned MSPs looking to fine-tune their business strategies. Others were box resellers asking basic questions:

  • What’s a NOC (network operations center)?
  • How do I price managed services?
  • How will I interact with Synnex and go to market with my managed services?

During the workshop, Synnex shared some interesting math. Using Level Platforms’ remote monitoring tools, Synnex estimates that roughly 45 percent of customers’ PCs and notebooks are four or five years old — or perhaps even older. So the massive PC refresh trend will continue. But as part of that trend, Synnex is calling on channel partners to promote lifecycle management services. In other words: Cradle to grave PC managed services.

In some ways I found the workshop reassuring. Plenty of resellers are still gearing up to catch multiple managed services waves — PC and server management, digital signage, video as a service, unified communications, hosted PBX services… and the list goes on.

But on the flip side I don’t want to paint managed services as a silver bullet that solves all reseller problems. As I often say: If you’re a bad reseller why on earth would expect to become a top MSP?

Bottom line: I think there’s more upside in this market. And I think plenty more resellers will thrive as MSPs. But let’s all steer clear of the hype. Managed services ain’t easy. And the challenges will only intensify as big vendors offer direct-to-customer options.