The impact of the pandemic on Managed Service Providers

February 17th, 2022Rob Prior

As the Covid-19 pandemic deepened, the digital transformation roadmaps that businesses had developed were suddenly void. Many had to quickly adapt to remote working, demanding increased protection against threat perimeters, with expanded network and IT support.

While many end-users witnessed unprecedented change across their sectors, the need to expand network access while ensuring high levels of security, resilience, and availability, simultaneously challenged Managed Service Providers (MSPs) to quickly evolve their services. Demand for infrastructure, IT equipment and digital services surged almost overnight and many MSPs were simply expected to accommodate the increased workloads. Further, many service providers were looked to as trusted advisors and experts who could help business adapt to remote work patterns, while overcoming supply chain challenges.

The transformative change in supply chains, and the rise of the hybrid worker, however, both require a new approach to data and network service delivery, which according to McKinsey, will be reinforced as the pandemic recedes. Growth within the Managed Service sector also shows no signs of slowing, and a new report from TechTarget found that 86% of recipients were looking to work with an MSP during 2022 – an increase from the 75% that responded in 2021.

The challenges facing MSPs are manifold, but what the pandemic has taught the sector is that the need to be agile, combined with robust infrastructure, application security and diverse network connectivity are key to meeting customer demands. In fact, the potential for continued growth post-pandemic is significant. However, only those MSPs that have a strategic plan in place, backed by agile, mission-critical data centre infrastructure, will be well-placed to take advantage of new service opportunities.

Essential support functions

While growth within the sector has already been prolific, the learnings have been many, and not without their downsides. The importance of relationships has stood out as a key point of differentiation for many businesses, and many have been tested to the limit as the realities of meeting unanticipated service level agreements (SLA’s) became apparent.

Whether an MSP chose to expand their service portfolio, or make their existing suite of services more efficient, cost-effective, and secure, the support of like-minded partners remained vital. The ability to scale-up securely and cost effectively was also pivotal, and the role of data centres and network connectivity became critical to the digital economy.

Dynamic service was also key factor and to support those businesses bouncing back from the pandemic, MSPs, like many other service providers, have needed to reinforce their relationships and gain a greater understanding of how they can support evolving customer business models.

Moreover, in recent years, the IT services, and more specifically, the channel marketplace has become particularly competitive and crowded. Many service providers have hoped to expand, diversify, and differentiate their services, but the challenges are many. Further, with supply chains constantly affected, having the ability to futureproof your services and scale quickly in line with customer expectations is critical. Here, having likeminded and reliable partners was, and remains the very difference between success and failure.

Growing demand

One area where MSPs are expected to grow is in security. According to the latest MSP survey from SolarWinds, over half (66%) of respondents adapted their security services to support remote mass working. Colin Knox, vice president of community, SolarWinds MSP said, “Without MSPs as an extension of the team—focused on risk mitigation and business continuity—many businesses would have been lost and wouldn’t have been able to support remote working on such a vast, immediate scale. The knowledge, expertise, and skillset of MSPs has been crucial in this changing climate. They have truly become essential.”

With the skills shortage reaching endemic levels, the role of the MSP has become even more crucial for today’s businesses. But in turn, MSPs have had to develop robust partnerships across the IT stack to service growing customer demands. In the channel, working with businesses, including data centre operators, that don’t compete within the service space, has been critical.

And while it has always been important for MSPs to demonstrate value to their customers, the personalised services that a technical data centre, or ecosystem partner can bring to the table, will only become more critical as greater demands are placed on sales, services, and support functions.

New partnerships and new opportunities

The prosperity of MSPs is, therefore, intimately linked to their partnerships. The data centre is the hub around which many of their services are delivered and as such, colocation operators can play a critical role in the lifecycle.

At Custodian, our agile and mission-critical data centres have been expertly designed to help MSP and IT Service providers grow. We offer fast and dynamic service that acts as an expert, technical support function, helping businesses realise their digital transformation ambitions through resilient digital infrastructure. Further, we believe that partnerships mean transparency, so we offer technical support and services that truly compliment MSP service portfolios. And in turn, service providers know they can rely on us to deliver access to IT, network, power, and cooling capabilities; ensuring that the infrastructure is there to support them when they need it most.

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