The MSP industry: turbulence ahead.
Conclusion: Easy venture capital money and a highly fragmented market are driving consolidation in the Managed Service Provider (MSP) industry.
Whether your MSP is the target or the buyer, the M&A activity will be accompanied by organisational changes and strong pressure from the VCs to maximise returns. In the low margin MSP industry, this could have implications on the MSPs’ willingness to retain the resources which provide the resiliency that you need. In any outsourced relationship, it is advisable to clearly define the service being sourced, the service level expectations and to perform due diligence on the capabilities of the service provider that enable them to deliver this. In a consolidating market, IT organisations need to pay even greater attention to these activities.
Commoditising your infrastructure and technology achieves two important outcomes: standardised skills, which are easier to find; and easier transition to (and between) MSPs as they also have resource constraints.
About The Advisor
James Turner is an IBRS emeritus Advisor who specialised in cyber security and risk and facilitates the CIO Cyber and Risk Network on behalf of IBRS. James has over a decade of experience as an industry analyst and advisor; researching the cyber security industry in Australia. As an IBRS Advisor, James authored over 100 IBRS Advisory papers, led dozens of executive roundtables, and presented at numerous conferences.