By Rick Trujillo, Director of Cloud and Professional Services
As businesses struggle with adapting to new technologies and staffing to accommodate rapid change, the demand for outsourcing services continues to grow. Gartner expects outsourced services to grow by 6.7% in 2023 with a projected total of $264.9 billion.
And once those businesses start looking for help, they are faced with over 20,000 Managed Services Providers (MSP) in North America alone – making it a daunting task to filter through them all and determine what value means to them.
A small percentage of businesses are evaluating recurring services for the first time, not just in managed services, but for end-user support (Help Desk). The larger pool of businesses currently evaluating MSPs have already been outsourcing for a long time, their contracts are up for renewal, and they are looking for a new experience, mainly due to MSPs failing to support them effectively during the pandemic in areas like security, remote workforce, and cloud modernization.
Today’s more modern MSPs must be battle-tested, forward-thinking, and willing to reach a new level of honesty and transparency with their clients.
As businesses evaluate MSPs in 2023, here are four things to look for and questions to consider when meeting with potential MSP candidates.
MSP pricing programs are increasing due to a combination of inflation, enhanced data security expenditures, and higher talent costs. According to TechTarget and the ASCII Group, most MSPs are raising their prices anywhere from 5-10% on average. As contract renewals come up for review, businesses are not only faced with an unbudgeted increase in cost but the feeling that they may not have received the value they expected during the previous contract. Those concerns are encouraging businesses to evaluate their options.
Vendor selection decisions should not be based on price alone. Businesses should enter vendor discussions prepared with questions and what value they expect to receive from their chosen provider.
This may seem trivial, but a lot of Microsoft IT Professionals – at least the relevant key players in the business – are completely separated from how licenses are provisioned, the structure of the contract, and the contract negotiations. IT administrators need to be involved so they can offer recommendations on how licensing has truly impacted the business and provide advice on how licensing should play a role in the business in the coming year(s). Understanding the renewal date also allows for team involvement and setting of milestones for reaching the best business decisions for next-gen products and projects. A runway of 4-6 months is ideal when evaluating an EA renewal.
Today’s MSP must work smarter. Although businesses still see value in relationships, the local MSP shop that was a quick phone call away is losing its luster due to a lack of expertise, organization, and automated services. It is crucial that MSPs reinvest in how they do business in 2023 if they want to support today’s client needs.
Larger MSPs with capital are reinvesting in day-to-day operations with better tools for new customer onboarding and support, ticketing and billing systems, and marketing strategy. The primary intent is to do more with fewer people on the operational side and to rebuild the focus with face-to-face sales and relationship building.
As businesses evaluate MSPs in 2023, it is important to ask questions and fully understand what tools and systems are in place to automate the support and relationship that is required.
The “stale” MSP is dying out. The basic requirements of an MSP, such as monitoring, patching, break/fix, and onsite support are no longer differentiators… they are expected.
Today’s MSP must focus on cloud migration, cloud security, and cost optimization in the cloud. Offering variety in the public cloud is difficult due to certification and personnel costs at the engineering level, but is important for an MSP to provide services for at least one of the big three (Azure, AWS, GCP) and to offer comprehensive services ranging from migration, optimization, and fully managed support for all resources.
The growing interest in cloud-based device management, such as Microsoft Intune should also be considered. The process of imaging devices in a conventional way does not align with today’s remote workforce model and small-staffed IT teams. A business must adopt the ability to reduce steps in delivering a fully secure device to a user that fits their use case. Selecting an MSP that understands hardware provisioning, zero-touch user-initiated deployments of the device, and support of that device from the cloud is a must.
Outsourcing of the Help Desk will also take on new meaning. Instead of responding to support requests from end users, the MSP must now work proactively at the admin level by assisting with onboarding, lifecycle management, and secure offboarding of users, which would include reallocation of licenses and devices to new employees. This requires in-depth knowledge of device management and governance within Microsoft 365 and other client-preferred third-party products for security and compliance.
Cyber insurance policy approvals continue to get more complicated, and businesses’ adoption of security frameworks such as NIST and CIS18 continues to rise. The toughest challenge for IT professionals today is taking what is technically required to secure a business and translating it into business language that will encourage executive buy-in and budget approval. The modern MSP should be able to support this challenge by guiding the client through inventory management, gap analysis, and application to support applied controls.
Email security, endpoint protection, MFA, backup for M365, and user awareness training should be the baseline to any MSP agreement and the MSP should be able to onboard and support the client across all products offered. Leveraging the security manufacturer for additional SOC services is okay and is growing in popularity for smaller and less security-focused MSPs.
As a best practice, it is important for businesses to understand the basics of how they are contracted with their current MSP. Understanding renewal dates, terms and conditions for termination of the contract, and the offboarding procedures are just as important as the contract entry terms. Evaluation of MSPs on an annual basis is a great practice for businesses if time permits.
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“Rick Trujillo is the Director of Cloud and Professional Services at MicroAge where he serves as a subject matter expert on the benefits of the cloud. Rick educates associates throughout MicroAge on how they can support clients on their move to the cloud while empowering data governance and limiting resource sprawl.”Rick TrujilloDirector of Cloud and Professional Services, MicroAge