If you have read some of my blogs in the past, you know I have referenced market consolidation in other industries as a predictor of what is to come for service providers. For example, if I asked you to buy a hammer, most people would immediately think to go to Home Depot or Lowes. If I asked you to buy a book, Amazon comes to mind and if I asked you to gather up some office products, Staples or Office Depot jumps into your head. But, 30 years ago, if you had asked our parents the same questions, the answers would have been the local hardware store, the corner bookstore and the stationary store on main street.

Market evolution and consolidation is inevitable, if you don’t believe me, please try and find a movie to rent from Blockbuster. However, market consolidation doesn’t have to be catastrophic, if you’re strategic and plan accordingly.

There are at least three different paths to evaluate when contemplating the future success of your service provider business. All of these are strategies you can learn more about HostingCon, the global event for the cloud and service provider ecosystem:

Companies like Mindshift and All Covered have been acquiring quality MSPs via a seemingly perpetual “roll up strategy” for several years and it seems to be paying off. Both organizations are highly ranked on the MSPmentor 501 with strong growth numbers and both are considered Tier 2 TSPs according to the Clarity TSP Index (which is very good based on their size).

However, they’re not the only ones making deals. Over the last 12-24 months we have seen other players, in some cases small and mid-sized MSPs acquiring other MSPs, as they plan for a future, where bigger could mean better.

If traditional and new acquirers are ramping up their deal making efforts, that means more companies are getting acquired. The companies being acquired generally fit two different profiles, providers who are just looking for the final payday so they can move on and those who want to team up with a larger player and be part of a bigger growth story. Both paths have their merits and it really comes down to ownership’s preference.

Traditionally, service providers have been horizontally focused. It’s very rare the find an MSP that works exclusively within a single vertical market. According to the MSPmentor 501 data most providers target a handful of vertical markets and 35% of MSPs are open to serving any and all vertical markets. The horizontal approach works fine in a fragmented marketplace, like the MSP industry has been since its inception. But as consolidation accelerates, it’s important to be either a larger provider with scale or to be focused on a niche, where the “big boys” can’t provide the same expertise and value.

All three strategies have their advantages and I am not advocating for either one of them, but I do feel strongly you can’t get caught in the middle without a plan. So, gather up your management team and talk through which path makes the most sense for your organization.

This topic and many more will be discussed at HostingCon in New Orleans next month. Join me on Tuesday July 26th at 2:30 to learn more about crafting a successful cloud strategy.

Source: TheWHIR

Regardless of what you want to call it, many industry pundits having been trying to predict when the technology will go “mainstream” and when we’ll see massive adoption. While technology moves faster and faster, it still takes time for new concepts to take a strong foothold, especially in the channel.

People are generally averse to change, so gaining massive adoption is a process.

First you need to change the minds of the service provider, second you need to produce an economic model that makes sense for the service provider and then it’s up to those service providers to sell the new idea to their end clients. That can be a long cycle.

Let me provide an example of the cycle from a personal perspective. As a former leader of an MSP, I remember hearing the term BDR in the context of a product offering for the first time in 2008. At Thrive Networks, we didn’t start to sell a BDR solution until 2009. By the time we really understood what we’re doing it was 2011 and then we became very aggressive selling against tape back-up and insisting our managed clients have a BDR solution because economic model worked and it was the right thing to do for the client.

Today, over 95% of the MSPmentor 501 offers a BDR solution to their clients, making it the #1 product offered by MSPs in the world with Datto taking the most market share in the category.

If you had told me back in 2009 that BDR would eventually beat out RMM (93% penetration in the MSPmentor 501) for that #1 product spot, I wouldn’t have believed you. In fact, I probably would have called you crazy. After all, RMM really invented the MSP recurring revenue model!

Now that we have some perspective on the time it takes a for technology to gain traction in the channel, lets return to the WaaS discussion. The first time many service providers heard of DaaS (now WaaS) it was 2012 and at that point people were confusing it with VDI (which people still do). Many service providers learned more about it from 2012-2013, but most really didn’t start selling it until 2014.

Today, according to the 2015 MSPmentor 501 data, 52% of providers offer DaaS, with another 15% saying it’s a growth area for them in 2016.

As for the market leaders, IndependenceIT® leads the way the with most 501 companies leveraging its Cloud Workspace® Cloud Management Platform, (please note, we did not count their SDDC management or app service management licenses in this analysis) and itopia has the most market share with those 501 companies that leverage a complete end to end WaaS platform. That said, it’s still a wide open space with more competition entering the fray every quarter.

Even though we have more data on the market then we did even last year, many questions still remain. Will WaaS eventually see the type of adoption BDR has enjoyed over the last few years? And if it does, who will emerge has the market leaders? Will we ever see a WaaS provider with a billion dollar valuation like Datto? What we do know is that the emerging technology now has a more appropriate name and continues to make progress with many service providers and their SMB clients.

Who knows maybe in 2020 WaaS will be the #1 channel product for service providers on the MSPmentor 501.

If you’re interested in learning more about WaaS and how it’s becoming a part of the service provider ecosystem, you should check out HostingCon July 24-27th. I will be there talking about creating a successful cloud strategy, which for some businesses could include WaaS.

Source: TheWHIR

Over the last few months, MSPmentor and Clarity Intelligence Platform have leveraged big data principles to produce the MSPmentor 501 List, which will be announced on May 19, 2016. Based on the aggregation of data points from across the entire managed service provider industry, this year’s 501 list will provide unprecedented highlights and insights.

Until now, BI, BA and big data have benefited mid-market and enterprise companies who have the budget to pay for the software as well as the resources necessary to analyze the data. Now, service providers (SPs) can equip their SMB clients with the insights BI, BA and big data produce, allowing them to add strategic and consultative value for their clients.

The most successful SPs in the market conduct monthly or quarterly business reviews with their clients. SPs provide a high level overview of the services consumed during this time period, general technology performance and a road map for future improvements (which usually consists of an upgrade/project).

Here’s the problem, SMBs eventually grow tired of hearing about how many viruses were quarantined last month, how much spam was caught or how much more money they need to spend to upgrade their IT infrastructure. SPs need to utilize this time to demonstrate their value as a trusted advisor who has more to offer than monitoring, and helpdesk.

SPs can go beyond delivering these simple services and instead add real value with business insight type intelligence to their customers, becoming a “trusted advisor”. Matt Toback will discuss ways SPs can offer this service in his HostingCon session, “Service Providers and Metrics: Feed Your Customers”. He will describe how adding BI services can increase value and stickiness beyond ping, power and pipe and how to use existing technology to do it.

There are also now tools to help SPs move from purely a service provider to the coveted role of “trusted advisor”. This concept has been touted by that industry pundits for years, but there have been no tools to enable SPs to easily become one.

Fortunately, that is changing, cloud workspace providers such as itopia and Cloud Jumper (formerly nGenx) are providing platforms that produce BI, BA and big data for the SMB community, delivered exclusively by the SP. Kaseya – one of the world’s leading RMM companies – is also integrating with the Clarity Intelligence Platform to give their MSP partners the ability to drive more value into their client relationships.

It really doesn’t matter which platform or toolset you prefer, the key is providing SMBs with better information to help them run a better business. Doing so allows you to go beyond delivering monitoring, management and helpdesk services to add true value.

This article is brought to you by HostingCon, the Cloud and Service Provider Ecosystem event. Join us in New Orleans, Louisiana July 24-27, 2016 to hear Jim and other thought leaders talk about issues and trends in the cloud, hosting and service provider ecosystem. Save $100 off your HostingCon All Access Pass with coupon code: H1279

Source: TheWHIR