We have been spending a lot of time talking to MSPs and other vendors over the last few months. Something has been bugging us, we can't quite put our fingers on it but something has changed in the marketplace.
It wasn't until recently that the ah-ha moment really hit. Many MSPs are becoming retailers again. The older MSPs have seen this back when they started off as computer shops where they built custom machines for businesses and users. Then Gateway and Dell popped up and took that responsibility off our hands. When that happened a major shift occurred. We moved to the MSP strategy where we started providing services to clients as our primary bread and butter. We supported companies to help them succeed through managed services. It was glorious as clients who bought our services surpassed their competitors. Then the cloud came and made selling services even easier. The industry matured around us and something funny happened.
"The problem is the vendors have brainwashed MSPs into being resellers."
We walk into clients with a playbook in hand to resell Microsoft or Cisco or whoever has convinced us that their game is the best. Chasing that Gold partner certification.
We are so focused on becoming the best reseller we have forgotten what we should be focused on. Providing services to our clients to help them succeed. The major vendors will do everything they can to distract us from this because MSPs are a key part of their supply chain. The main problem here is that retail margins are a low-bid game.
MSPs have WAY more to offer clients than asset management (retail reselling). Great MSPs are focused on delivering solutions to their clients that make them great at what they are offering the market. Great MSPs are empowering great clients to change the economy around them. That is how we created the dot com boom. It was more than the rise of the internet, it was the reshaping of the economy. We all know that the margines on services are amazing. As a bonus, you get out of the low-bid game!
During the pandemic we saw something similar as the economy reeled from the shutdowns. Great MSPs were reminded of what they could do and worked to help great businesses ride the wave and transform the economy into something even better!
Then the pandemic went away...and the big vendors needed to make up for lost time. So they doubled down on MSPs selling directly to customers. A schism was born. Some MSPs kept focused on services while others bought into the retailer's idea.
What we are seeing today is the MSPs that are staying focused on service delivery are growing rapidly and so are their clients in spite of the recession. The MSPs who are focusing on retail are struggling as no one wants to buy assets during a recession.
So the biggest problem facing MSPs today? The retail game...it is very convincing and you can be delivering so much more to your clients. The problem is...you need to believe that you have more to offer than reselling.