This week’s Ask the Expert is answered by Mark Banfield, SVP International at Datto, Inc.
Ask the Expert: What can an IT Channel Partner bring to my business?
Digital transformation is changing the way businesses operate, with an increasing number of organisations now recognising the competitive advantages delivered by new, cutting-edge technologies and services.
However, this means what clients demand from their IT service provider is changing, and managed service providers (MSPs) that embrace digital transformation will be the ones to win in the long run.
So, what do clients now want from their IT provider?
Complete ‘IT as a Service’
Clients don’t want to get bogged down in the ownership of servers, networks, disk arrays, databases, software, websites, authentication systems, or even end-user devices. Instead, they want to gain specific business capabilities, which require these underlying components.
They increasingly want their IT on a ‘pay-to-play’ basis. Data, application logic, and actionable analytics are ultimately what make the world go around—not ownership of CPUs or flash drives.
Price on Total Value
The client doesn’t want to spend their time examining IT costs and breaking down itemised bills. They want their IT on-demand – whether hardware, software or services – as part of a fully-managed package.
MSPs that can deliver pricing based on total value to the customer, rather than a mark-up on total cost of things like equipment and labour costs have the advantage. Their profitability depends on maximising value to the customer while controlling costs – undifferentiated services simply won’t support a profitable price-point.
Capitalising on Cloud
Cloud services are growing in popularity among clients. Running an Opex pricing model, successful MSPs often turn to cloud services to support their business, taking advantage of the sharing economy for capabilities they once might have built in- house, including financials, marketing, and QA.
Combined with a services-led pricing model, digital transformation is changing the relationship between clients and their MSP, with a focus now on business outcomes rather than the technology itself.
Ultimately, MSPs must focus more rigorously on client satisfaction, since revenue and profits ultimately depend on retention and renewals. MSPs that don’t structure their services and staff incentives to support client satisfaction will wind up having to constantly chase new clients – which is not nearly as lucrative as keeping existing ones.