Should Big MSPs Continue to Partner?
In a previous post, I talk about how the added efficiency from the scale of a traditional NOC service, with its shared service model, decreases as an MSP grows, and in fact the lack of process and tool flexibility can actually impede a mature MSP’s growth. This naturally leads to the question, should a large mature MSP still partner and if so why? I believe the answer is absolutely yes, but the partner selection needs to focus on different criteria.
- Dedicated Resources – Once an MSP has enough internal scale, the additional efficiency contributed from the scale of a shared NOC is very small. At this point, the MSP is better served by finding a partner that can offer a dedicated team that benefits from a shared facility, infrastructure and management and that is located in an economically advantaged geography. This arrangement provides the MSP with the consistency that comes from always working with the same individuals, but with little facility and HR overhead. Additionally, the members of the team assigned to a given MSP will become very familiar with that MSP’s customers and will deliver better service over time. Operating within a shared facility and infrastructure, the MSP will still benefit from shared cost on those items that will not effect day-to-day service. Finally, an economically advantaged geography provides highly trained resources at a fraction of the cost that is available locally.
- Process & Tool Flexibility – When a VAR first embraces services and becomes an MSP, they will typically be weak on processes, but as they mature, they develop a deep understanding of what works for their customers and they may even acquire some large customers that have their own process requirements. At this point, the MSP needs a partner that allows the MSP to specify the process and tool selection and to perhaps set specific processes by customer.
- Flexible Resource Pool – Having a dedicated team is great for consistency and building specific knowledge to support your practice areas. However, there are times when a skill set is required either on a one time case or a periodic frequency that does not justify a full time resource within you team. To meet these requirements, an MSP needs to identify a partner that has a pool of specialized talent that can be drawn upon to meet a specific need or simply augment the staff to meet a temporary workload increase.
By following these considerations, the large MSP will still benefit from improved service quality and reduced service delivery cost while still focusing their internal resources on high-value projects and closing new business.