Managed Services Providers Coping With New, Evolving IT Channel Business

The need for increased communication with vendors and clients was the most important message at the recent Channel Evolution Europe conference. Key players from top technology companies and their channel partners spoke about challenges, opportunities, and the needs of their customers and the industry. While the forum was supposed to be inter-European in scope and attendance, almost all delegates and channel companies were U.K.-based.

In one of the first sessions, four of the MSP 501 shared their experiences and thoughts about the future of the IT solutions channel. The panel included Mitesh Patel, managing director of Fifosys; Ken Roulston, managing director of CMI; Des Lekerman, CEO of Kocho; and Mark Williams, COO of Complete IT; and was moderated by Informa’s Robert DeMarzo.

One of the critical challenges affecting the channel today was the surge of mergers and acquisitions, effectively consolidating the IT industry, according to CMI’s Roulston. Therefore, MSPs are faced with integrated solutions that big tech offers directly to large corporations. To stay relevant, channel partners must quickly learn and adapt to the new reality. Part of that new reality is that, while many corporations still prefer hybrid cloud solutions, multi-cloud solutions are now driving business, he said.

Meanwhile, focusing on existing platforms, especially in the private cloud, could continue to provide the bread and butter for many channel organizations, according to Complete IT’s Williams. Still, the move to the public cloud for most organizations is unavoidable. MSPs must invest in new applications and technologies to offer their customers bespoke solutions.

Digital Transformation Presents Numerous Opportunities

Digital transformation is now one of the most important business opportunities for vendors and their channel partners. According to Kocho’s Lekerman, many industries are evolving and embracing automation, artificial intelligence, and big data. Scale is the key to achieving results for the MSP sector, but the lack of relevant skills and the unavailability of new talent could jeopardize the growth, he said.

The channel must be proactive in convincing customers to accelerate their digital transformation, Fifosys’ Patel said. Traditional companies in many industries could be overtaken by newcomers and competitors embracing new technologies in this rapidly evolving and competitive environment. Sourcing talent is now a big challenge for many companies, and one solution is to diversify efforts and look for relevant skills elsewhere, especially abroad, he added.

Furthermore, as mentioned before, the pandemic has accelerated the digital transformation of many industries, but not necessarily in an organized way. Many organizations had to scramble for resources and purchase a mix of IT products and services to continue operating during lockdowns and other restrictions. Now they are trying to make sense of their current IT situation. This is another challenge, and opportunity, for MSPs to step in and help them adapt to the “new normal.”

Fragmentation of the European market was also widely discussed. While the American market is mainly dominated by channel partners in the form of MSPs, VARs, and other distribution channels, it is very difficult for large MSPs to operate in several European markets. Additionally, IT services’ regulatory challenges have become highly complex since the U.K. left the European Union.

Finally, security poses a vital challenge for companies. The pandemic has created a surge of shadow in many organizations, as employees resorted to using a mix of applications and products to continue working remotely. Large organizations with the right talent and IT resources were the least affected, but many small- and medium-sized businesses have seen severe security threats and experienced data breaches and ransomware attacks. This is another example of an opportunity for channel partners to help their customers deal with those situations.