Managed services providers must extend portfolios to provide more services while narrowing their vertical market focus to add further value, a European Managed Services and Hosting Summit was told.
Gartner’s research director Mark Paine told the assembled throngs that while MSP Services were growing over 35 percent, but it is not going to last, and the survivors will need a strategy.
When customers say that only five per cent of managed services firms differ from all the others, then it will pay them to invest in skills and marketing. Otherwise, customers will go with larger, better-established providers or ignore them altogether.
But the rewards are waiting for those MSPs who can prove what problems they solve and what makes them unique, particularly when the MSP can show how the deal will work and how customers get value, he says. Research shows that product success and aggressive selling carry no weight with the customer, compared to laying out a vision for the customer’s own growth and success.
European lawyer Ieva Andersone, from Baltic legal specialist Sorainen, said the industry was facing compliance issues, including GDPR, which were all about establishing trust. She warned that the GDPR framework while grabbing the headlines, was itself subject to “national peculiarities”. Individual countries enabled their legislation differently and a lot more new compliance rules, some affecting business use of data, were being looked at across Europe, which might soon start to affect the use of public data.
M&A experts Hampleton’s director Jonathan Simnett said that in the last year, financial investors have returned to tech company buying and this was driving up valuations in specific sectors, including automotive tech and e-commerce. What defined the value of an MSP, in particular, was not its status so much as the vertical markets it was addressing.
The next in the Managed Services Summit series of events, the UK Managed Services & Hosting Summit, will be held in London on 19 September 2018.
