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As 2022 comes to an end, we are seeing that the “Great Resignation” due to the pandemic has turned into the “Great Layoff” as the global economy adjusts to current world events. Organizations are now preparing to ride out the market downturn. The downturn itself is being driven by weak demand due to high inflation and low pay raises. This means that buyers have less money to spend, and their fixed expenses have gone up. So, what does this mean for MSPs?

Not all bad news

At first glance, it looks like a poor outlook for MSPs. Organizations are tightening their belts as revenue shrinks and a more critical review at how best to save money.

However, this is where MSPs can shine. By changing messaging to focus primarily on efficiency and effectiveness – in essence, how to do a lot more with less time – MSPs can be seen as a way to save money, improve performance, and the better option to ride out the storm.

Automation promotes accuracy, efficiency, and cost savings

One of the primary ways that MSPs can help their customers is through automation. If organizations are restructuring (or employees decided to leave), then there will be fewer people available to carry out the work.

Automating processes to only deal with the exceptions, rather than the everyday aspects of processes, can create a lot of efficiencies. It can also reduce the likelihood of human errors with fewer tasks that may need to be redone or checked to ensure sure they were done correctly. Automation can also reduce problems of slow responses to the needs of a process, such as signing off items or reviewing them, allowing MSPs and customers to become more efficient and it will be easier to audit.

MSPs must also look for the opportunity to provide new functionality that prospects, and existing customers aren’t using yet. This may be areas such as data analysis and reporting, taking existing data such as sales information and identifying for the customer where to focus sales across their geographic reach, where to look at cross- and up-selling based on historical data and so on.

Each one of these areas can provide a means for the customer to uncover new sources of income – and therefore not only enabling them to survive, but maybe even to thrive through the coming year.  Again, each of these areas will need to be messaged to the customer as to how they will save them money, investment for future gains will not be a strong message through 2023.

Flexibility is a major benefit in uncertain times

Another aspect that MSPs do well is flexing systems to meet needs. If an organization is unsure as to what size its employee base will be through 2023, then putting in place on-site infrastructure is very much a hit-and-miss activity. Should servers and storage be sized to meet possible highest predicted employee levels, so resulting in a lot of wasted resources, or sized at lower end, so resulting in possible slow responses and even downtime caused by resource constraints?

Far better to move to an MSP that offers flexibility where the customer can add or delete new users as it is needed and only pay MSP for the resources that the MSP dynamically provisions to meet those needs.  As the MSP is serving a large customer base, it is easy to provide the flexibility rather than having dedicated on-premises hardware and software. MSPs must turn this into a major benefit through 2023.

As always, the MSP should be able to position this flexibility as money saving – not necessarily through direct savings on subscriptions, but through the comparable lifetime costs of a fully-managed, continuously updated, and patched system against the same levels of functionality being installed and managed by the organization in its own facilities.

MSPs must help customers mitigate the impact of the downturn

Overall, it is likely to be tough to truly thrive as the geopolitical and economic problems continue to weigh heavily across the markets in the coming year. The key is to pivot and play to the customer’s greatest needs, in this case, it is the financial loss or gain that can be easily agreed to by them. This is no different to what has been seen in previous market downturns, such as the banking crash of 2008. However, the market for MSPs has matured considerably since then.

Arguments on functionality and advanced capabilities will not carry as much weight as they have done in the past. Messaging around what an MSP can do to help the customer manage to deal with this specific downturn will carry far more weight.

Photo: Robert Bodnar T / Shutterstock


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Posted by Clive Longbottom

Clive Longbottom is a UK-based independent commentator on the impact of technology on organizations and was a co-founder and service director at Quocirca. He has also been an ITC industry analyst for more than 20 years.

8 Comments

  1. Well written article.

    Reply

  2. I believe it is critical that MPSs continue to provide value-based services while having empathy for clients and prospects who may be experiencing a downturn in business while, at the same time, being required to make additional investments in IT and cybersecurity.

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  3. A good MSP should drive efficiency at every turn and translate that into tangible benefits to the customer’s bottom line. It is during the hard times that we should shine the brightest.

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  4. get as much automated and get processes set as a standard so things can be applied across the board. then SOP what is unique so that there is no ambiguity in process. Then the bottom line of keeping clients ahead and providing great value

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  5. Great summary of what we can expect as we transition into the new year.

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  6. Great article. Always good to assist clients with automation and improving their efficiency.

    Reply

  7. For all the doom and gloom London isn’t slowing down much at the moment. The SMB market also has opportunity with many customers looking to transition from an in-house model to a more efficient outsourcing arrangement, especially downsizing below the need for a full-time employee.

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  8. Excellent article. Well structured and certainly some key points to take away.

    Reply

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