Two ways for vendors to improve their relationships with MSPs

Sales of IT managed services through the channel reached US$367 billion in 2021. Vendors of all types are looking to add more subscription or recurring revenue to their business models while marketing their MSP capabilities. But there is often a big difference between the financial aspirations of vendors and the maturity of their MSP offerings. Customers are making renewed investments in managed services in 2022. Let’s look at two ways vendors can improve their relationships with partners delivering managed services:

1. Dedicated MSP programs: 55% of Candefero partners said they will make more than 10% of their revenue from managed services in 2022. This is up from 51% in 2021. Over a million partners are delivering managed services globally, the vast majority of which will make less than US$1 million in managed services revenue. This shows how difficult it is for vendors to develop strategies to address this diverse group.

The line between resellers and managed services providers is blurring further and this poses a problem for programs and account managers. Vendors must develop better MSP programs and adapt them to offer more flexibility in consumption, billing and incentives. This means understanding these partners’ business and revenue models and recognizing the value they bring to customers.

2. Building alliances and ecosystems: Despite the emphasis on vendor marketing messages, partners do not always want to consolidate their vendor technologies. This is partly about caution and trust, as partners do not want to put all their faith in one vendor, and they want the freedom to select the best specialist technologies in their stacks. They much prefer better native integrations and alliances. For example, the Canalys MSP Tech Stack tracks the key technologies that form the backbone of partners’ managed services strategies, including RMM, cloud SaaS, cybersecurity, backup and IT service management software. Vendors often focus only on their competitive advantages, but they can only develop strong MSP offering by understanding their positions in this ecosystem.

A key change for customers in recent years is an understanding of how cybersecurity runs through the Tech Stack. Cybersecurity managed services grew 18% in 2021, but this is not just about endpoint and networking products. Partners must deliver security strategies that cover consulting, technology, monitoring, analytics and remediation services. Prevention is key, but a strong remediation strategy is just as important. Vendors that do not understand this and do not invest in their alliances are losing credibility with MSPs.

Alliances and integrations must be one of the top priorities for vendors’ product and marketing strategies in 2022. Building great relationships with other vendors and marketing these to the channel will improve messaging. Advanced partners need to be able to offer a security service that also includes monitoring, analytics, and rapid backup and disaster recovery of data across on-premises and cloud infrastructure, databases and applications.