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2020 – The year that changed everything for Managed Service Providers by Rachel Rothwell, Regional Director at Zyxel

2020 will be known as the year that changed everything, everyone and every sector – and Managed Service Providers (MSPs) are no exception. The needs of MSP’s customers virtually changed overnight once the pandemic took hold. Those that were once hesitant to allow remote working had their hand forced and are now more relaxed about allowing employees to work from home. But this also means the network needs to be more robust. Many businesses have put money in place to keep people connected from home, many of which were short term solutions not suitable for long term remote working in the ‘new normal’.

COVID challenges for MSPs

While there’s still a large amount of uncertainty regarding what ‘the new normal’ will look like, the short-term challenges for the IT teams that MSP’s work with are becoming more apparent. With restricted access to offices and strict social distancing regulations, there could be complications with respect to installing new equipment. There are new rules and safety guidelines to adhere to in terms of the delivery and installation of new equipment on site – and who can come onto the premises as well.

Restricted access to offices could create challenges with hardware support. If devices are managed as stand-alone units or used as a simple on-network management protocol (SNMP) solution, there may be some difficulties if network administration staff are not on-site all the time. If network administrators aren’t there to monitor traffic and devices, if anything goes wrong there will be a delay in correcting the problem. In contrast, being able to offer remote support as part of an ongoing managed service offering minimises unnecessary boots on the ground, while ensuring IT systems are quickly up and running – and remote workers are back online – without having to visit the office.

A further challenge for many businesses is the availability of IT budgets. With a sharp increase in IT spend at the start of the lockdown period to enable home workers, on top of additional costs associated with the pandemic, IT budgets are likely to be leaner for the foreseeable future. With less upfront budget for new IT equipment, organisations may look to extend the lifecycle of their current hardware or opt for other ways to spread out IT costs, preferring an OpEx costing model to an up-front CapEx model.

As we approach a hopefully  more stable period, MSPs must now work with their customers to future proof IT. If we’ve learnt anything from COVID, it’s the need for agility. So, with this in mind, what are the key areas that MSPs need to be prepared to deliver on?

Tech trends for MSP’s moving forward: Infrastructure as a Service

A recent report from the International Data Corporation (IDC) highlighted that throughout the COVID-19 crisis, spend on technologies such as Infrastructure as a Service remain resilient, with 58% of respondents expecting to maintain or increase their budget in this area. Adding managed services into a reseller’s portfolio doesn’t always require a business remodel. Many vendors and distributors offer white labelled services that deliver “MSP-lite” services without reinvesting in skills, training and equipment.

Hardware as a Service

The Hardware-as-a-Service (HaaS) industry is expected to grow by 26.2% by 2025, and networking equipment is the largest category for leasing after printers.

HaaS represents an alternative to out-right hardware purchases, providing a way for end customers to spread out the cost of their purchase over a longer, more manageable period of time. HaaS can be easily complemented by remote monitoring and management services, providing them with a fixed, pre-defined monthly cost for hardware and services. It will allow businesses to spread the cost over several months or – in the case of the hardware elements – the lifetime of the products.

Managed cloud services

Amongst the current MSP community, many have predicted that cloud-based services will gradually replace those based on-premise. For example, 57% of MSPs expect the use of on-premises servers for critical applications to decline over the next three years. As more applications and data move to the cloud, the face of the network will need to change as more data will inevitably move through the network. According to the April Verizon Network Report, overall data volume across its networks has increased 19% compared to pre-COVID levels.

Moving forward, businesses are likely to need employees to have the same network access point at home, using the same network SSID as they use in the office. As a result, businesses are also now calling for cloud-based remote network management to monitor traffic and resolve any issues. If anything goes wrong, the network can be restored via the cloud-based portal.

Greater security protocols

The gradual evolution into more distributed and virtual structures will have an effect on the underlying infrastructure and network traffic patterns of businesses. In particular, the switch to people working from home more often will have a huge impact. There will be a need for more bandwidth, tighter security and protection at the gateway to the network, as well as a requirement to support more Virtual Private Networks (VPNs) or point-to-point connections.

Additional authentication and encryption may be required, consuming additional bandwidth, and it may be prudent to apply additional layers of protection at the gateway. Faster switches may also be needed to provide adequate throughput on the network backbone, while wireless connections may need to be updated if staff are now going to be more distributed.

Adapting the network

Adapting the network to enable “the everywhere office” will take some planning and, of course, the whole situation is changing all the time. Adjustments will be needed as organisations and their staff adapt to the new way of hybrid working, both in and outside of the office, as there will be a need to monitor network performance and the experiences of both locally connected and remote users.

As part of this, there will then be three main tasks to perform, presenting an opportunity for the IT Channel:

  • A reassessment of networking requirements and proposal for updates, additions and changes
  • Implementation of the additions and changes agreed
  • Performance and security monitoring and issue remediation

All this may be done by internal IT staff, if they possess the requisite skills, but many will need to look to MSPs for assistance. Knowing that there is someone knowledgeable, looking for unusual behaviours or traffic patterns and monitoring the network at all times, will provide an added level of assurance.

The acceleration of digitalisation and blended working represents a massive opportunity for MSPs and resellers that can support the evolving business requirements and adding a managed services layer that’s easy to maintain – on top of your existing services – could help to facilitate this goal.

Changes to workplace practices are accelerating the journey to managed services. As a result, the global managed services market estimated to grow to $65.51bn by 2025. IT resellers that offer managed services could find new success offering easy-to-deliver support and managed services, and could help to reduce customer’s IT costs by 25-45% – now’s the right time to add easy-to-execute managed services into your portfolio. Doing so could help MSPs solve new customer challenges brought to light by COVID-19, and generate new sustainable revenue streams for your business.


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