In the 15 years I’ve been in the IT business I’ve seen some evolutions and shifts in this business. So where is your business on that journey? In this excerpt from my new book: Infinite Scale: The Ultimate Guide to Growing your MSP, we take a look at the 4 different phases of MSP evolution.
Break–fix. Simple and straightforward.
I started with a screwdriver and an idea; that was the first phase, and it was how things were 15 years ago. A small business would call me up and say, ‘James, my computer’s broken…’ and I’d say, ‘Okay, I’ll fix it and I’ll charge you $100’. A week later they would phone up and say the printer doesn’t work, and I’d charge another $100, which is why I call that the break–fix phase. Big disadvantage: unpredictable revenue and cash flow.
Managed Service Provider (MSP). Taking care of business.
When the industry started to mature, companies wanted to fix their costs so their accountants and everyone else knew where they stood financially. It also helped the service providers, giving them a retainer that enabled them to budget too.
These companies were saying, ‘I don’t want to pay by the hour for IT support, I want you to tell me how much it’s going to cost me every month for you to maintain my company’s entire system’. From that, the managed services industry evolved, which is where most MSPs are today.
The Cloud. The ultimate in de-centralization.
Then came a burst in Internet information services. There wasn’t anything you couldn’t find out and there wasn’t anything you couldn’t buy online. In fact, a lot of information came free, and everything moved to the Cloud. It went from hands-on computer servicing to customers suddenly saying, ‘We don’t need software on our computers any more, we just go online, sign in and it’s all there…so, what do you guys actually do for me now?’
Open for business. Welcome to the whole planet.
As I write, we are in a fourth phase where globalisation has turned service into a mixture of in-house and offshore labor. You and your clients are not simply competing with the MSP across the street. Anybody can go after your customers. And so MSP businesses need to be far more agile than they ever were.
The technology is going to keep moving more and more radically; the one thing that hasn’t changed is that we still don’t understand where it will all end. We’ve survived three phases, we’re living in a fourth, and there will be a fifth phase and a sixth. One day there’ll be a tenth phase! So think about where you are – are you ahead or behind? The fact is we all need to keep moving and look at how we can make our business models as agile and scalable as possible.
If you want to learn more about evolving and growing your MSP – take a look at Infinite Scale: The Ultimate Guide to Growing your MSP. It’s an informative and quick read designed to help you evaluate where you are in your MSP and what you need to do to go forward.