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As an MSP, it can be a bit daunting when looking around at the competitive market. Sure, there are other MSPs your size, doing pretty much the same things as you. It’s a case of competing on a peer level for the business that’s out there.

However, there is always a possibility (nay, a probability) that one of the ‘big guys’ (AWS, Google Cloud Platform, Microsoft Azure) will step up to the plate and put something in place that competes with your portfolio. Due to their size, they can afford to undercut you, making it difficult for you to fight back effectively.

I have written previously on the need for your marketing to differentiate from the more faceless behemoths of such large platform providers and to focus on the added value a true customer/provider relationship can offer. However, this may not be enough by itself.

How smaller MSPs can fight back

For those who find themselves being overly squeezed, there are a couple of extra options that can be looked at to increase the chances of keeping and gaining more customers.

The first thing is to accept that imitation is the sincerest form of flattery. Suddenly, a major platform vendor is doing something similar to what you are doing. Rather than messaging the basic functions, point directly to the messaging that the Big Guy is putting out there. State that these points are just the ‘table stakes’ – any vendor that cannot offer these is not worthy of any consideration.

Now, pick out points where your offering is unique and message these to differentiate yourself from the Big Guy. In other words, ride their coat tails; let them lay the road for you, and you can then drive along it more smoothly than they can.

The second option is a bit more impactful. MSPs coming from a long background are probably still using their own kit in their own datacentre, or possibly using a colocation facility to cut back on those costs.

However, when you look at the ‘successful,’ born-in-the-cloud companies, such as Uber, Airbnb, Lyft, and so on, they own very little. They go further than just making the most of a large platform provider’s messaging — instead, they sit right on top of that platform.

This removes capital, licence, maintenance, and a large part of the administration costs. Instead, far more predictable per-monthly (or equivalent) costs can be put in place, or a more variable, but still essentially predictable, usage cost can be used.

This goes beyond just shifting the costs from being totally owned by the MSP. It opens a range of extra capabilities that make sense in a modern environment. Based on my previous two posts looking at microservices and open standards, sitting on top of a major platform not only gives a dynamic, flexible environment where resources can be increased or decreased as required, but also gives access to other services that are sitting on that platform.

For example, as an MSP, you have been looking at how artificial intelligence (AI) could help you in providing added-value services to your customers. You could start from scratch and build your own AI system. However, this is not recommended — keeping up to speed with companies that specialize in AI will be too costly and will probably not work anyway.

Instead, why not find those companies with AI expertise that sit on the same platform as you and link to them? All the main platforms provide marketplaces where a chosen service can be integrated into a system and operate at datacentre speeds. Those using your service will not see any increased latency in response times, as the integrated service is running as if it was part of the same network.

Indeed, even for those MSPs choosing colocation, the same approach works. Large colocation vendors such as Equinix or Digital Realty offer marketplaces for services operated by third parties within their datacentres. Also, such facility managers offer high-speed connectivity to the Big Guys (via Azure ExpressRoute and AWS Direct Connect). This gives the best of all worlds, with a better working relationship with a colocation partner, while still having access to a raft of third-party services at datacentre speeds.

Combining the two options gives your MSP a distinct advantage over the big guys themselves. You can ride their coat tails on messaging, while providing a complete solution to your customers, through the aggregation of services across the platform.

Surely that is a great way to compete in an effective manner?

Photo: PlusONE / Shutterstock

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Clive Longbottom

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.

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