The MSP model is basically a commodity play

Who wants to be a commodity?

I have struggled with the MSP model since it came out and have considered writing about it for some time.  Today, I realized why we aren’t an MSP.  It’s that the MSP play turns both the client and the provider into commodities.  For those that don’t know, MSP refers to “Managed Service Provider” and has become an ascendent business  model for IT service providers.  The model is predicated on charging fixed monthly fees (usually per client and per server) for a limited list of services.  The provider then tries to scale up and service more clients with fewer technicians by leveraging remote access and monitoring tools.

Patching and monitoring is necessary but not sufficient.

Intuitively I feel that IT services are difficult to commoditize.  This isn’t the fast food industry.  The MSP model says that proactively patching and monitoring systems will reduce service requests.  I find that almost impossible to believe.  Patching and monitoring could not have prevented 95% of the service requests that our company sees in the average week.    Of course we do patching and monitoring.  This is dictated by Best Practice.  Of course patching and monitoring can help a service provider “proactively” fix some problems before they become visible to the end users.  This is true for everyone who follows best practice, regardless of their model.

So what do we do?  How are we different from MSPs?

We didn’t buy an expensive framework to cram all of clients into.  We build custom solutions suited to each individual environment.  We support existing systems as long as they are meeting business requirements.  MSPs have the tendency to push clients to a unified platform that lowers costs on the admin side.  Our model is more flexible.  We go on-site regularly.  We talk to clients face-to-face and work to understand what they are trying to do.  Sure we can provide remote support as needed, that’s trivial these days.  But relying on remote support exclusively turns both the client and the provider into a commodity.   First IBM dumped their commodity businesses in favor of high value-add services and now HP seems ready to follow in their footsteps.  I feel good about trying to learn from them.