What Makes Managed Services Hard? It’s Complicated.
Complexity is a fact of life for MSPs and vendors who partner with them, as Auvik, Barracuda, Cynet, and Sophos can all attest.
Spend any time at all talking to MSPs or vendors these days, and you’ll probably end up discussing complexity in one context or another. More tools to juggle. More business models to weigh. More customer touch points to track. More routes to market to manage.
I won’t lie: A big part of the motivation behind this post is that I’ve got a backlog of recent vendor conversations I’ve been meaning to write about and I want to make it smaller. Conveniently for me, though, four of those conversations touched on two specific dimensions of managed services complexity in interesting ways.
An infinity of tools
Let’s start with a form of complexity all too familiar to managed service providers: tool sprawl. In security alone, the average MSP relies on four products from four separate vendors at a cost of over $300,000 a year, according to recent research from Cynet, mostly because the 50 customers that average MSP serves have a long and growing list of attack surfaces.
“The endpoint, the cloud, the users. There’s so much, and it just continues,” says Jeannine Edwards, Cynet’s senior director of marketing.
The picture’s even uglier in networking, per Auvik’s latest IT trends report, which found that 44% of MSPs use 10-20 network tools and another 5% use more than 20. Network management is a complicated task in the work-from-everywhere era, observes Steve Petryschuk (pictured), Auvik’s director of product and market strategy, but not that complicated.
“It doesn’t take that many tools,” he says. Yet MSPs can have trouble resisting the temptation to tack on yet another when a vendor comes along with something new and shiny.
The cost spans well beyond licensing. Fully 60% of the IT professionals Auvik polled are experiencing moderate to significant burnout at present, and the inevitable inefficiencies of using too many tools are a contributing factor.
“There’s a relationship between the amount of time I’m spending on tickets, the number of tools that I have to manage, and burnout,” Petryschuk says, and it only compounds over time.
“It’s sort of like a negative cycle where I’m more burned out, so I’m less efficient, so I’m spending more time on fewer tickets and spiraling downwards,” Petryschuk observes. “The reality is we can’t manage an infinite number of tools.”
That’s one unfortunate explanation for data in Cynet’s research showing that just 40% of MSPs provide cloud security at present, just 35% do vulnerability management, and just 30% offer incident response. Most of those who don’t do all that know they should, Edwards suspects, but are afraid of the added cost and workload. “You don’t want to impact overhead so much that you don’t support the client effectively,” she says.
Both Cynet and Auvik propose the same fix to the tool sprawl problem: get more of your tools from fewer suppliers. Cynet (like Guardz, Coro, and Judy Security, among others) makes that possible by offering a suite of pre-integrated solutions designed to reduce coverage gaps and lower operational overhead, resulting in better security, happier customers, greater profitability, and a higher exit price.
“The EBITDA number is always that magical number,” Edwards says.
Auvik, for its part, has spent the last few years expanding its portfolio to cover the wider range of office and remote network connectivity scenarios MSPs confront in the era of hybrid work, including through acquisitions three years ago of SaaS management vendor Saaslio, Wi-Fi troubleshooting vendor MetaGeek, and remote endpoint support vendor Boardgent.
“Your experience on accessing the applications you need to do your job are totally dependent on the wireless infrastructure,” Petryschuk notes, “but you don’t manage any of it.”
Per you-heard-it-here-first coverage last November, endpoint network monitoring functionality based on capabilities acquired along with Boardgent went live in March.
Fit for purpose across the board
If more tools from fewer vendors is an answer to complexity for MSPs, it’s a source of complexity for those vendors, who must somehow provide an expanding array of products to partners serving small businesses, large businesses, and everything in between via broadline distributors, value-added distributors, telco distributors, cloud marketplaces, and beyond.
Just to raise the degree of difficulty a little higher, moreover, they must manage all that through one partner program that accommodates multiple business models (the average IT provider currently embraces 3.8 identities ranging from MSP to VAR to cloud solution provider, among others) and rewards members for the many ways they can participate in the sales cycle, including what Canalys says are 28 touch points during the pre-sales process alone.
“You need a program that’s fit for purpose for folks across the board,” says Michelle Hodges (pictured), who became Barracuda’s senior vice president of global channels in May.
The varied ways vendors navigate that challenge are interesting. The new partner program Sophos introduced late last month, for example, includes tracks for resellers, MSPs, MSSPs, GSIs, and more.
“We wanted to make sure that we had all the routes to market covered that our partners prefer,” says Chris Bell, who’s been the security vendor’s SVP of global channels, alliances, and corporate development since February. The new program also uses a points-based system to measure progress toward training requirements rather than make a diverse member base complete a uniform set of courses.
“They can really choose their own adventure to get to the certification path that they want,” Bell says. “With 25,000 partners, we wanted to be flexible.”
And yet keep all those partners happy too. At a time when thousands of vendors are courting choosy partners seeking fewer supplier relationships, partner sat must be a top priority, which is why Sophos maintains a 24/7 partner care team as well as a customer success team with a dedicated renewals unit. “The goal there is to work hand in hand with a partner to ensure that they have the highest retention rates when leveraging Sophos technology,” Bell says.
A new titanium tier rewards the vendor’s most loyal and effective partners, while a new referrals program gives the less engaged but still vital companies involved in those 28 pre-sales touch points—Bell calls them “influencers”—an incentive to help sell.
“Partners are seeing higher win rates when there’s more influencers advocating for a partner or for the vendor,” he explains.
In a further bid to please partners, Sophos has built an AI sales companion trained to provide easy answers to sales, technical, and pricing questions that would otherwise take time to research.
“We have no shortage of great content in our partner portal, but it can often be time-consuming to find when I need it in a crunch,” Bell observes. According to Hodges, Barracuda has a similar AI tool coming.
“It allows a partner to open up a referral or a renewal and learn all about the customer, and their licensing, and what products they should sell, and how they should position it,” she says.
Hodges is too new on the job to have decided yet about revisions to Barracuda’s partner program but sees promise in opening up yet more routes to market.
“We don’t do any business today really with hardware OEMs,” she says by way of example, pointing to telco vendors as another potential set of go-to-market allies.
That said, Hodges also recognizes that sometimes continuity is the surest way to a partner’s heart. “I’m not one to drastically change or rip and replace anything,” she says.