Mid-sized companies offer growth potential for MSPs: CompTIA

A recent survey by CompTIA reveals that the managed services provider (MSP) sector is in for slow growth this year, but the information technology industry education and certification association also reports that opportunities abound for MSPs that scale beyond basic managed services

The survey conducted late last year by CompTIA covered 400 IT and business professionals involved in IT decision making as well as in-depth interviews with 17 top management level professionals, CompTIA found that current IT management and outsourcing behaviours indicate that majority of firms are satisfied with the performance of their in-house IT departments and are using less outside IT help. While respondents were United States-based, April said the finding could apply to MSP market north of the border as “the situation in Canada is likely to be as close to what is seen in the U.S.”

Traditionally the customer base for MSPs was dominated by small businesses that may have outsourced their entire IT function, as well as by enterprises that looked to MSPs for discrete functions such as hosting email or providing data backup services, according to Carolyn April, director for industry analysis with CompTIA. Today, however, mid-sized companies are embracing the MSP model to address evolving situations ranging from bring-your-own device models to social media.

For example, CompTIA found that operations-focused IT departments are ill-suited for tackling ongoing research and investigations associated with issues such as BYOD because “after all, they must keep the business running first and foremost.”

As one outsourcing consultant quoted in the survey put it:

“There is a commodity level of, ‘I can do it cheaper than you can do it and frankly I can do it better, because I have more and I can go faster, you don’t have to deal with all of that.’ But there’s also a place for the newer technologies where people want to go or experiment with, but they don’t have the ability to have an internal staffing to go play and do this research.”

In the past IT generalist could be counted on to shoulder an organization’s IT load. However as IT complexity increases, many firms are realizing that they need experts in areas such as virtualization, cloud computing, software-as-a-service integration, mobile device management, disaster recovery and other technologies.

In many cases these businesses find it more efficient to retain an MSP “than to hire a dozen high-priced experts that will be lightly utilized,” according to the report.

April said one of the key trends CompTIA spotted is that many MSP are setting the tone of the customers’ IT strategy to the extent that their influence can be felt upper executive levels of the organizations.

The opportunities in the mid-sized market go beyond selling existing MSP offerings at scale. CompTIA has the following suggestion to MSPs in order to make the most of these opportunities:

Specialize to raise value and margins – Offer high value and specialized services in areas such as: SaaS integration, mobile devices, disaster recovery and hybrid cloud. MSPs with a pool experts across customers has the opportunity to develop a deeper customer relationship delivering higher-margin services

Become a strategic partner – Customers today are looking for a “trusted advisor”. Many successful MSPs have taken the role in setting their customers’ overall technical strategies and are even affecting the operation of the C-level executive suite.

Go beyond technical excellence – Companies are increasingly viewing IT as something that the merely supports business goals. Customers want MSPs, to support this goal as well. Today the MSP-customer relationship paradigm requires that MSP personnel have strong business, industry, interpersonal and communication skills.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Nestor Arellano
Nestor Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

Related Tech News

Featured Tech Jobs


CDN in your inbox

CDN delivers a critical analysis of the competitive landscape detailing both the challenges and opportunities facing solution providers. CDN's email newsletter details the most important news and commentary from the channel.