Managed services – the future of the channel?

The message from vendors and distributors to the channel has long been to reduce reliance on quick, transactional deals, and shift to more value-generating, recurring-revenue services. With this in mind, in this edition of The Margin, we focus on managed services and the companies that provide them. If this is the aim that channel players should be striving towards, what do MSPs offer? How is the local market evolving? Is the MSP opportunity really one worth chasing?

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The old adage that an outsourced IT service provider can deal with the complex and skill-intensive world of IT so that the client business can hand that over and rather focus on what they do best still rings true in the world of managed services. But the market is evolving from the outsourced IT model.

Clients are still turning to MSPs to assist with improving efficiencies, saving costs, shifting from capex to opex and not having to hire the skills inhouse. But MSPs are more strategically involved with the business than an outsourced IT provider.

MSPs help clients to meet business outcomes, align with GRC objectives with managed security offerings, improve the user experience, and, among other things, help the client organisation to digitally transform. And it’s this last part where the opportunity will really lie over the next few years.

The wave of digital transformation, driven by emerging technologies such as IoT and AI, is an area where MSPs can prove their worth. Cloud and connectivity enable the creation of all manner of possibilities for managed services. But with the change to a cloud-like world, there’s a shift from the long-term contracts to more flexible, pay-as-you-use, risk-sharing engagement models.

Undoubtedly, the managed services area is one that is coming of age in South Africa, and there’s still room for channel players to seize the opportunity, but as with the shift from box dropping to annuity services, it requires a mindset change. It’s not just a lift n’ shift; the challenge on the ground is changing your own business model, so how do you abandon the transactional deals that often get you into client companies to then sell them services?

In these pages, you’ll also find features on the reality of 3D printing, selling to the mining sector and determining how much to reinvest into your business. We’ve also run a couple of roundtables recently (one on the networking market opportunity and the other on the converged and hyperconverged infrastructure market), and you’ll find the reportbacks from those. Our infographic toolkit in this edition looks at some of the key considerations to be made when starting your own channel business.

It’s a jam-packed edition and I hope you find something that piques your interest.

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Adrian Hinchcliffe
Editor
adrian@itweb.co.za