When it comes to prospective customers, managed service providers (MSPs) often find themselves trying to navigate between two extremes. On one hand, there are organizations with highly competent IT teams that feel they are the equal with MSPs in terms of IT prowess. On the other, is IT laggards, who are often more trouble than they are worth for MSPs. In the middle is the bulk of the market that values IT, but hasn’t come to terms with how to manage it.

Survey results reveal challenge for MSPs

A new survey of 207 IT leaders at organizations with more than 1,000 employees, conducted by Forrester Consulting on behalf of ScienceLogic, a provider of an IT management platform, illustrates the scope of the challenge MSPs face. Over a third of the respondents (37 percent) said they are exclusively relying on legacy tools to manage their IT environment. That compares to the 12 percent that say they have completely embraced modern tools.

That leaves roughly half the market stuck between those two extremes, which arguably represents the sweet spot MSPs should be focusing on. After all, that half of the market clearly still values IT, but just can’t figure out how to make the next big transition. In fact, the survey finds a third of companies are employing 20 or more tools to manage their IT environments, which suggests plenty of money is being spent ineffectively.

More telling is the fact that at least half the respondents said last revenues per IT outage were in excess of $1,000 per hour, with 28 percent putting the number at more than $10,000 per hour. A quarter said IT outages cost them well more than $1,000 per minute. The survey suggests organizations are becoming more conscious of the fact that increased IT complexity not only results in more downtime, but also higher costs to support, service degradation, and increased security risks. The real issue is to what degree organizations will to do something about those issues.

The bright side for MSPs

The good news is 68 percent of total respondents are committed to becoming more agile, which suggests more of the IT laggards are starting to wake up and smell the proverbial IT coffee. The top five IT operational technology priorities over the next 12 month are improve the use of data/analytics technology (84 percent), increase the use of cloud (80 percent), upgrade business applications/systems (77 percent), increase IT visibility across tools and resources (75 percent), and invest in technologies that drive digital experiences (72 percent).

When it comes to IT there’s been a noticeable shift as of late. More organizations are showing a willingness to invest in digital business initiatives. They just don’t know how to make the most of those investments or what to invest in. Savvy MSPs are positioning themselves not just as providers of best in class IT services, but also as strategic partners in the age of digital business for customers that are serious about modernization. 

Of course, that may require MSPs to significantly expand their knowledge of how IT is applied in a specific vertical industry to utmost affect. The alternative, however, is to be viewed as a little more than the equivalent of an IT maintenance service, that could easily be replaced at any given moment. One of those two roles is a lot more precarious than the other.

Photo:  welcomia / Shutterstock

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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