The managed services provider (MSP) model has had a remarkably long run, considering how much IT has changed over the last 20 years or so. Written off by many as the economics of cloud bit into the MSPs' market share, at one point many were predicting the end of the MSP, displaced by a combination of SaaS and public cloud.
Not any more. So what's changed?
MSPs get cloud
The role of the MSP was originally to help companies manage hosted infrastructure and applications, and provide a POP onto the Internet. As SaaS and public cloud became affordable, and sufficiently reliable and performant for enterprise usage, it seemed that the MSP would be overwhelmed by this competition.
In practice this was not the case, not least because enterprise needs do not switch in a binary fashion. Not only are there still many core, business process and business-critical applications that do not fit comfortably into a cloud environment, they still need to be managed, and visibility needs to be maintained. Compliance issues may also be involved. This makes moving into the cloud much more complex.
An example of a classic business-critical function is ecommerce, a function that both consists of many applications and elements, and is probably highly customised in many enterprises. While any change in such crucial processes is likely to be incremental, applications will over time develop, be tweaked and tuned and have elements that move onto different platforms as cloud and hyper-scale technology matures, and competitive pressures force change. The end result is likely to be a blend of in-house, hosted, SaaS and multiple cloud platforms.
Management of such a complex environment is unlikely to be a skillset in which most enterprises will to want to invest large amounts of cash or training time. Rather, this is a task for the specialist, such as an MSP who has experience of managing mixed environments.
Management need not be the whole of the service. The right MSP can help with advice, for example, on the most appropriate location for individual workloads, whether a hosted environment, the cloud, or on-prem, within the constraints of cost, security policies and compliance.
MSPs go beyond management
So it is in this modern environment that we can expect the MSP to shine. Not only can the MSP help with management, they are likely to advise on and take control of policy and process management, allowing the enterprise to outsource entire business processes.
In other words, the MSP has shifted from providing "your mess for less" to being a cloud-based provider of business processes. This allows the enterprise to, for example, rent back the ERP services it used to manage at considerable expense - for less. Following the traditional cloud model, for the customer this means no more infrastructure management, and a predictable monthly cost model both for ongoing process delivery and business process changes.
The more forward-looking MSPs will also offer services that not only shoulder the load of steady-state business processes, but also help the enterprise become more agile by nurturing productivity-enhancing application development processes such as DevOps.
So the modern MSP is changing, from an organisation that just manages your stuff to an organisation that blends the cloud and cloud services with a range of advice and practical help, in some cases even providing business processes that were once performed in-house. So it seems as if the MSP will be around for the forseeable future.