The ASCII Group just released their MSP insights for vendors from their membership and we wanted to discuss some of our takeaways. The data increasingly shines a light on many of the consistent problems that MSPs are facing in an ever more competitive market, where offerings are being commoditized and standardized, and service, talent and packaging continue to increase in value and importance.
We were frankly thrilled to see that none of the members listed "Tech Tool Overload" as a primary roadblock to growth, and that seems to speak to the growth of the industry as a whole in making technology and MSP solutions more easily deployable and digestible. Time Management continues to be a major driver of inefficiency and will likely be an area that sees significant improvement as AI continues to infiltrate our lives and automate communications and monotonous tasks.
Staffing, of course, came as no surprise to us here. Representing nearly a quarter of the 'block' so to speak; this speaks to the challenges MSPs continue to face in identifying the right talent for their needs and then scaling that talent to meet the demands of their customers. Too often MSPs are stuck between hiring before the revenue or scrambling to hire after the revenue has been booked, and the risks that are associated with that.
In seeing the previous numbers, one would think that "Talent Acquisition" would be a larger share here as well, but this is also sort of a "chicken or the egg" type scenario. Are Cybersecurity Threats such a significant challenge because of the dearth of experienced Cyber talent? Are MSPs just waiting in fear of the next customer breach or exposure because they know that they don't have ample bodies to be able to deal with the fallout?
"Service Differentiation" is definitely a common theme we see more and more. As every MSP aligns with the 'red team' or 'blue team' ecosystems of tools and services, it becomes harder and harder for them to define to their customers why they should be chosen as their next provider. The 'why?' is not about features, software, buzzwords and acronyms, it's about how you can make them feel and at what price. How will you provide assurance that they are supported and protected, and why are you better at that assurance than your competition who's maybe asking for $10/less per seat?
We firmly believe, and this is backed by our own industry experiences, that having a hybrid workforce is a huge part of the differentiation equation. When the customer asks you how you're better, maybe you can tell them that you are able to staff your own NOC and after-hours support teams in-house, rather than relying on a vendor to sub it out? Or maybe, because you are able to staff your organization appropriately, you can ensure that your best and brightest will be able to handle their on-site work, or their projects, because they aren't being bogged down by endless phone calls and Tier 1 problems?
How many of your competitors can truly say that they operate a 24/7 model utilizing their own in-house labor? More and more, this kind of coverage is important to your customers, and showing them that you've put time and dollars into investing in your model above and beyond your competition will give them confidence that selecting you will be a good investment for them.
Looking at these numbers, it should come as no shock to any MSP sales person or owner that more than 70% of all deals require participating in RFPs or otherwise highly competitive 'RFP-like' sales processes. You've been in the rooms, you've seem the multi-page questionnaires and spreadsheets that aim to distill your offering down to it's bare parts. How on earth is anyone supposed to differentiate themselves in that environment? Again, it goes back to packaging, and in this case, price as well.
Luckily, when you have a hybridized workforce you'll know that your costs for labor are lower on average than your competition. So with that ammo in your belt, you can lean in with more aggressive pricing from the get-go when you're faced with a highly competitive deal. Secondly, you can package your offering as being broader and more comprehensive, knowing that you have the labor pool to tap into to offer broader support, greater oversight and more depth of skill.
Overall, through our eyes these insights point to talent and service packaging as still being to two primary drivers (or inhibitors) of growth. Acquire the talent, expand your offerings, package your offerings in unique, easily digestible forms to separate yourself from the pack.
Thank you to ASCII Group for providing this data. If you aren't already a member, check out their website and see if they are a fit for you.