Managed Service Providers and Their Role In SME Market Development
Updated: Mar 14
The core aim of each business is to grow from a tiny startup to a full-fledged enterprise with affiliates worldwide. All managers think about business scaling and transformation because it's a natural part of the evolution in this field. However, how many obstacles are waiting for enthusiasts striving to achieve more! The budget issues, bold expectations, force-majeure…
Now, the foremost thing business leaders should focus on is business digitization: migration to new technologies, modernization of legacy approaches, or even more - digital transformation as it is. The movement in the right direction is half of success.
However, for small and mid-sized enterprises (SMEs), every detail can affect the final result and lead to failure. Following CHAOS Report 2020, only 31% of projects were completed successfully. Most likely, their number will be a bit lower because of post-pandemic instability and the economic consequences of the Russian invasion of Ukraine, which affected almost the whole world. So, what helps such companies to survive? Who provides them with the software infrastructure and tools?
Managed service providers seem reliable allies for SMEs since they allow them to optimize business processes, cut costs and turn into mature & flexible businesses. Read on to explore how SMEs can benefit from service providers and how they are doing it now.
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What is Managed Service Provider and How It Support SME Business Growing
"A managed service provider (MSP) delivers services, such as network, application, infrastructure, and security, via ongoing and regular support and active administration on customers' premises, in their MSP's data center (hosting), or in a third-party data center. The term MSP was traditionally applied to infrastructure or device-centric types of services but has expanded to include continuous, regular management, maintenance, and support."
Most software products businesses are using is part of a managed service provider's offering. Just look around, you can find samples anywhere starting with Google Drive and ending with Amazon marketplace. SaaS, IaaS, PaaS, no-/low code platforms, and other cloud services you use in daily activities are the results of managed service provider operation.
Considering the Gartner's point of view, we can assume that MSPs are companies offering cloud-based products ensuring a complete coverage of all processes related to their implementation, hosting and maintenance.
Evgeniy Aleksandrenko, Digital Transformation Officer at JEVERA Software, once said,
"Cloud products are the engine of digital transformation for small and mid-sized businesses. They help companies create a competitive advantage and evolve using reasonable resources. This competition lets consumers receive better services and companies - achieve sky-high results and growth they strive for."
It is what managed service providers are about. They can provide narrow functionality or an all-in-one approach, they can be used by various companies from different industries. But MSPs have several common features:
They launch cloud-based software.
They take care of its deployment, updating, hosting, and maintenance.
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Core pros of cooperation with managed service providers
To be honest, the any-scaled company uses at least one product delivered by managed service providers. But here, we're focused on small and medium businesses. Why? The case is for them, MSP's activities mean much more than for enterprises. They help companies use business opportunities that were not available before. Among core values managed service providers bring to SMEs are:
Optimization of resources
When using MSP's services, small and medium enterprises don't need to design something from scratch. They have two options on how to get proven software:
apply ready-to-use tool by managed service providers
use a product helping create custom software with fully customizable templates
This way, companies can save the time and investment needed to start software development projects. Usually, this business segment hasn't any specific needs to cover, so the general approach of managed service providers will absolutely suit them.
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Lower Total Cost of Ownership (TCO)
Since managed service providers take care of effortless deployment, fail-safe hosting, and usually 24/7 maintenance, companies can use it to cut operating costs and reinvest them for strategic goals achievement. Moreover, businesses don't need any additional hardware or software to implement the MSP's offering, which means that the total cost of ownership is limited by the subscription fee.
Faster Time-to-Market (TTM)
Managed service providers give clients an opportunity to use various tools and features to set up well-designed business processes and roll out new software times faster. For example, in the case of drag-and-drop design service application, companies don't even need to think about a coding approach - they can create a "picture" by moving template components. Consequently, the simplified procedures can cut time-to-market dramatically.
Focus on first-priority business goals
The absence of the need to create software regularly helps business leaders to remain flexible and focus on goals that can provide vast scaling opportunities. Here, MSPs let small and mid-sized companies optimize their processes, resources, and workflow to grow with lightning speed.
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Core pros of being a managed service provider
Currently, Statista highlights Microsoft, Salesforce, Oracle, SAP, and Google as the most prominent companies in the SaaS market or managed service providers. But it doesn't mean that you can't be among companies offering services that MSPs usually offer. It's a huge advantage for tech startups or mid-sized companies looking for a way to transform their business models. By launching its product and becoming a managed service provider, your company can:
expand new revenue streams
engage new audiences
turn competitors into partners or product users
Managed service providers give SMEs precisely what they require: market-proven software for a reasonable subscription fee. MSP services are everywhere now. Even an ordinary marketplace is a software infrastructure that looks like a virtual mall where each retailer has a rented trading hall. The same applies to the entire managed service providers' offering, where all products are cloud-based, and vendors are obligated to cover hosting & maintenance.
Each small or mid-sized business can be an MSP, an MSP's user, or both. In the first case, the company can benefit from lower TCO, faster TTM, optimized resources, and business processes. Being a managed service provider, the company can expand its audience, drive revenue and receive a competitive advantage. But when the business uses both options - it's a win-win from each side.
Looking for a way to become a managed service provider and grow your business? Let us know! Our experts will advise you on where to start your transformation journey.
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