Gaining a real competitive edge in managed services

These are interesting – and challenging – times to be a Managed Service Provider. When it first published its Managed Services Market Size Forecast, Mordor Intelligence valued the market at US$152 billion in 2020, and predicted it to reach US$274 billion by 2026, a compound annual growth rate of 11.2%.

Over a year later, following a pandemic which has changed the way most of us work and which will probably see permanent changes going forward, Mordor is sticking by its prediction. Interestingly, however, the market intelligence firm has been tracking the impact of the pandemic on the different sectors that comprise the managed services market and has shifted its focus on where the growth will come from.

Industries like retail and manufacturing have seen a slump in their revenues, for example, with a consequent decline in the business of MSPs offering services to those sectors. On the flipside, areas like the cloud and DevOps which play a major part in the digital transformation strategies of organizations ‘are expected to hold tremendous potentials for managed service providers during the forecast period’ according to Mordor.

The 2020 Global State of the MSP Report from Datto concurs. It found that 84% of the 1,608 MSPs surveyed believe now is a good time to be an MSP, and they are still expecting to grow their business, although at a slower pace than expected before the pandemic.

This continued potential, of the market however doesn’t mean it’s plain sailing for MSPs. The sheer amount of money being invested in managed services has led to thousands of businesses across the globe trying their hand in the space. These newcomers range from specialist sole entrepreneurs delivering services to a select group of clients, all the way up to multinationals looking to expand their existing product portfolios. In such a competitive market, it gets harder for MSPs to set their business apart and avoid being forced to differentiate on price.

Perhaps the answer lies in the viewpoint of Bob Petrocelli, Chief Technology Officer of Datto. In the State of the MSP Report, he says: Unlike big enterprise IT shops that are often inward looking and sometimes overvalue complexity, MSPs value simplicity, stability, and quality. When we are at our best, we deliver technology that is aligned with these MSP values.

The report also found that 61% of MSPs consider the most critical security solutions for SMBs are anti-virus, advanced firewall, and remote monitoring and management (RMM) solutions. Anti-virus and firewall solutions and services are well covered, but the monitoring and management of database systems is an area that has often been neglected by MSPs. This is despite the fact that advanced solutions can be used to help deliver greater value to customers and give MSPs a real edge over their competitors.

A common approach to RMM, for example, is to consider broad and shallow monitoring solutions. These can initially seem attractive in isolation as they give insights across general metrics for a wide range of technologies. However, they fail to provide the insights necessary to see increased benefits and value delivered to both the MSP and their customer on such a critical element as the database. A more granular approach to database monitoring can be a used to complement such a product and plug the data gap with respect to database metrics.

Why database monitoring?

According to Redgate’s 2020 State of Database Monitoring Report, database estates are growing more than ever. In the report, organizations with fewer than 100 instances dropped for a second year, while those with over 100 instances increased. The biggest rise was seen in estates with over 1,000 instances, which grew nine percentage points year-on-year.

While the delivery of services in this area has long been a responsibility of MSPs, what this has meant in practice varies and has not always lived up to customer expectations. MSPs are typically willing to provide feedback to customers concerning high level metrics about the availability and general wellbeing of a database estate, for example, but there is often a reluctance to provide further insights. This might not at first appear to be a concern, but such a reactive approach leaves a grey area with customers when performance issues arise.

Responses vary from MSP to MSP, but they typically fall into three broad categories.

The first is to attempt an ad-hoc diagnosis of the issue and provide something in the way of a fix. If an MSP is not accustomed to providing this level of support, whether due to lack of tooling or time, the response provided will not genuinely be of value.

Quite often, for example, historical data has not been retained and DBA teams will use manually produced scripts to try and diagnose an issue that has already occurred. Because it’s after the event, it’s frequently not possible and, rather than fixing the problem, the only option is to try and put alerts in place in case it happens again. This leaves customers in a position where they don’t know why a problem has occurred, when it will happen again, or what effect it could have on their business.

The second response is more damaging and this is for the MSP to state it is not part of their service contract, or cover for it was offered and declined. The service delivery team responsible may try to offer a more helpful response and advise customers of ways they can dig deeper into the problem using tools from third party vendors, but this is still stepping away from the issue rather than resolving it.

The third option is to offer consultancy services on a reactive, ad-hoc basis to investigate issues not covered by contracted services. This can take time to agree and initiate and may be ultimately fruitless as the critical evidence relating to the cause of an event may no longer be available. It is also both inefficient for the MSP and costly for the customer, with no guarantee of results.

Regardless of whether MSPs choose to attempt to provide answers through imperfect processes, defer involvement in issue resolution, or be reactive rather than proactive, the result is nearly always the same. The customer is left in the dark and, most worryingly, it raises questions about the relationship with their service provider.

Where’s the competitive edge?

A better approach is for MSPs to take the initiative and go beyond the basic maintenance of server estates to also include effective issue resolution, performance tuning and proactive monitoring. By doing so, they will be able to provide the kind of additional value that enhances their competitive edge and demonstrates the advantages of their services.

To deliver a premium offering such as this, MSPs need to incorporate third-party tooling into their service delivery to give them the ability to provide these additional features without significantly scaling the size of their delivery teams.

Redgate’s SQL Monitor is one option in this space that allows MSPs to easily maintain the health of their customer’s estates with tailored alerting, root cause analysis and an easy-to-use single pane of glass overview of entire estates. Its multi-tenanted architecture and integration with ITSMs and enterprise infrastructure tooling also ensures that the solution can seamlessly fit into an MSP’s existing technology stack.

Conclusion

The continued willingness of organizations to outsource large chunks of their IT operations to third party providers is leading to a growth in the MSP market. This will inevitably result in increased competition and MSPs will have to look for every opportunity available to differentiate their offerings from their competitors.

One obvious way for MSPs to deliver extra value is to provide more detailed and proactive database monitoring and management. Redgate’s SQL Monitor can ensure MSPs are able to deliver a much higher level of service to their customers so that they never question the quality of support they receive.

If you’re interested in learning more about Redgate’s SQL Monitor offering for Managed Service Providers, download a free 14-day fully functioning trial or speak with one of our subject matter experts.

Tools in this post

SQL Monitor

Real-time SQL Server performance monitoring, with alerts and diagnostics

Find out more