How vendors can get skin in the MSP game

How vendors can get skin in the MSP game

More dedicated MSP programs, alliances and ecosystems.

Credit: Dreamstime

Vendors have room to improve with their managed services offerings this year and could take two major paths to strengthen their relationships with their partner networks.

According to analyst firm Canalys, vendors are looking to add more subscription or recurring revenue to their business models as they market their managed services provider (MSP) capabilities.

The firm’s senior analyst Robin Ody claimed the two ways vendors can approach this are through dedicated MSP programs and the construction of alliances and ecosystems.

Sourcing data from Canalys’ IT channel community platform Candefero, Ody claimed 55 per cent of partners within the community have said they will make more than 10 per cent of their revenue from managed services this year, up from 51 per cent in 2021.

The senior analyst said that due to the fact that over a million partners are delivering managed services globally, with the “vast majority” making less than US$1 million in managed services revenue, it is difficult for vendors to develop a strategy that addresses a diverse market such as the partner community.

The line between resellers and managed services providers is blurring further and this poses a problem for programs and account managers,” Ody said.

“Vendors must develop better MSP programs and adapt them to offer more flexibility in consumption, billing and incentives. This means understanding these partners’ business and revenue models and recognising the value they bring to customers.”

The second tactic of building alliances and ecosystems comes as Ody said partners do not always want to consolidate their vendor technologies.

“This is partly about caution and trust, as partners do not want to put all their faith in one vendor, and they want the freedom to select the best specialist technologies in their stacks," the senior analyst said. "They much prefer better native integrations and alliances.”

He also said that vendors often focus only on their competitive advantages, but in order to develop an appealing MSP offering, they need to understand their position in the ecosystem, pointing to cyber security as an example.

“Cyber security managed services grew 18 per cent in 2021, but this is not just about endpoint and networking products,” Ody said.

“Partners must deliver security strategies that cover consulting, technology, monitoring, analytics and remediation services. Prevention is key, but a strong remediation strategy is just as important. Vendors that do not understand this and do not invest in their alliances are losing credibility with MSPs.

“Alliances and integrations must be one of the top priorities for vendors’ product and marketing strategies in 2022. Building great relationships with other vendors and marketing these to the channel will improve messaging.

“Advanced partners need to be able to offer a security service that also includes monitoring, analytics and rapid backup and disaster recovery of data across on-premises and cloud infrastructure, databases and applications,” he added.

Canalys' analysis of the relationship between vendors and partners comes as fellow research firm Gartner claimed that the combined global spend on IT and communication services is expected to reach US$4.4 trillion by the end of 2022.

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