Cloud, Mobility, Big Data Key To Growth In Managed Services Space

Solution providers are expecting accelerated growth in the managed services space but stress that MSPs must transform as the need for cloud, mobility and big data solutions rises.

A study released Wednesday by research and consulting firm MarketsAndMarkets predicted the demand for managed services will jump drastically in the next five years, with the global market slated to grow from $101.2 billion in 2014 to $193.3 billion in 2019.

Related: Analyst Firm Predicts Huge Managed Services Growth, But MSPs Urge Caution

Kyle Cebull, CMO of Fort Myers, Fla.-based solution provider Entech, said customers are looking to managed services to increase efficiency and reduce in-house costs.

’Managed service providers are a more sophisticated way of handling information technology,’ he said. ’Companies are becoming more sophisticated in general about looking for new ways to excel. Those companies who do the same thing and don’t change are the same ones who are dying.’

Cebull stressed, however, that MSPs must always be on the lookout for proactive ways to improve efficiency for their customers.

’Many managed service providers have backgrounds as technicians, so there is a constant focus on taking advantage of technology innovation. Most solution providers are also starting to look toward moving into that environment, where they have end-to-end control,’ he explained.

The strongest MSPs are looking at how to enhance their offerings around mobility, cloud computing and big data, he said, but noted that the latter may not yet be ideal for all clients.

’I think people use the term ['big data'] but don’t yet know what it means in the managed services provider space. From a solution provider’s perspective, we have to look at our client’s perspective and see if this can actually help them,’ he said.

This rings true for Robby Hill, CEO and founder of Florence, S.C.-based HillSouth, which offers managed services such as unlimited IT support, software monitoring systems and proactive maintenance services.

’We do see a lot of opportunities in the big data market, but our focus is the small- and medium-business market and they are not yet challenged in the same way for the needs and analytics that big data brings,’ he stated. ’The MSP model is built around demonstrating expertise in key verticals and rapidly delivering solutions that cater to specific customers.’

NEXT: Solution Providers Predict Future Changes to the MSP Model

Solution providers also predict the managed services model will be redefined going forward.

Several client-specific requirements that have developed with the move to the cloud, such as compliance requirements, will require ’drastic’ changes to the MSP market, said Ed Don, president of Lumen21, an Orange, Calif.-based solution provider focused on managed services, consulting and infrastructure services.

’Successful MSPs will have to change their model,’ he said. ’Now, it’s no longer good enough to just manage infrastructure. MSPs will need to consider under what guise they will work, what equipment and policies are needed in managing services for specific industries.’

Looking forward, Don said that while the demand for MSPs may be higher, the need for a changed model could change the entire managed services market.

Herb Hogue, senior vice president of professional services and engineering at Gardena, Calif.-based solution provider En Pointe Technologies, agreed. As customers migrate to the cloud, they will favor MSPs who manage specialized cloud assets, he said.

’It will be a long progression for MSPs,’ he said ’The term 'managed services' is changing. We’re no longer in the days of just managing desktops. … It’s different than that.’

PUBLISHED JAN. 8, 2015