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Managed Services Providers’ Measure of Success

13 Oct 2015 by Bob Kane

Why did Uber partner with Spotify? Samsung with French designers? Amazon with Shopify? While each has its core offering, the other has a complementary one. Mix the strengths in these partnerships, and you have a recipe for Intelligent Technology™. As these partnerships combine the total end users, it grows their Average Revenue Per User (ARPU). Plus, it offers a convenient, one-stop shop for the consumer.

Branch out beyond main deliverables.

Like these examples, Managed Service Providers (MSPs) planning for the future can no longer define themselves only by the technologies they implement, manage or support. Although the MSP’s main offerings may be 24/7 remote monitoring, service desk and vendor management, the MSP must add a more comprehensive array of products and services its clients can tap into. Therefore, the MSP’s measure of success is its clients’ ARPU.

MSPs should be asking themselves what intelligent technologies they can offer to their end users to help simplify and add value to the experience while monetizing. The alternative?

Competitors will expand their variety of solutions supplying all of the customers’ needs within a range of IT products and services. This also leaves service providers at risk of being bought for one core offering to benefit their competitors’ growth. The “if you can’t beat them, join them” mentality is a better alternative.

Business is now cooperation and competition.

The old “winner takes all” way of business doesn’t work in today’s connected world. Companies have to both cooperate and compete. Named “co-opetition,” this new way to work necessitates building business strategies that take advantage of relationships to produce the best value in the marketplace. Internet and mobile technologies make it more crucial for companies to cooperate and compete — without information sharing, and integrating and streamlining processes, the networked economy as we know it couldn’t exist.

We're seeing this trend more and more in the IT service provider business. MSPs are partnering with competitors to include supplemental services they don’t specialize in, such as security, data and migration solutions. Take the office productivity space, for instance. Office 365 is adding migration services to help individual users move to the software. And Insight is investing heavily in Intelligent Technology tools to help service providers manage migrations, usage reporting, client reporting and billing, and license management.

This is the full circle of co-opetition.

Today’s MSPs can plug into the Application Programming Interface (API) in which they don’t specialize — such as a competitor’s client reporting and billing platform. This allows MSPs to focus on their main deliverables without being experts at the additional solutions. And it provides one place for client’s to access both the MSP’s core offerings and a variety of complementary solutions. This seamless experience brings a better base of customers and more ARPU for the MSP’s clients. The more products and services the end user receives from the service provider, the more customer loyalty service providers will receive.

For your business, this change can bring threats and opportunities. If you deliver services that help your customers thrive in the connected world, your business will thrive. If you don’t adapt, you’ll lose business, market share and relevance.

Co-opetition doesn’t mean your core deliverables won’t be relevant. They’ll be the main ingredient integrated with supplementary competitor solutions that are separate but on the same page.

The question that remains: How will you secure the data you’re mixing with your competition’s information? Watch for our next article, which will focus on the future of security in the new co-opetition business model.