Column: Survival skills the key in a managed services world

I found little to argue about with the story in MicroScope suggesting that resellers should consider making the shift to managed services in the face of declining hardware sales and fierce competition, writes Billy MacInnes. The exhortation for resellers to get into managed services at an event by K

I found little to argue about with the story in MicroScope suggesting that resellers should consider making the shift to managed services in the face of declining hardware sales and fierce competition, writes Billy MacInnes.

The exhortation for resellers to get into managed services at an event by Kaseya on 23 February sounds like common sense when you consider Forrester's prediction that managed services will be worth $18.1bn in the UK within two years.

The only concern I can see is that the more resellers pile into managed services, the more pressure will be brought to bear on margins in managed services and the fiercer the competition.

Mahmood Chaudhri, managing director and co-founder of at Datrix, told the audience that "if you can't differentiate in this industry as a reseller you have got a problem".

Now, while I understand where he's coming from, I have to wonder just how much differentiation resellers actually go in for. Back when resellers were being exhorted to get into software and then services, for example, they were portrayed as a means for resellers to differentiate themselves but I wonder if they actually did.

In most markets, there is a tendency for a handful of dominant suppliers to emerge or, in the case of services, service offerings. Naturally enough, resellers tend to coalesce around these dominant suppliers or service offerings so you end up with a large chunk of them offering pretty much the same software and services as everyone else.

With so many of them able to provide the required software or service to an acceptable standard for customers, the focus tends to shift from competency to price and margin.

I suggest the same will probably apply for managed services in the future, especially if a significant proportion of them are white label wraparounds of packaged services provided by vendors.

I'm not saying people shouldn't make the move to managed services, far from it, but what I am suggesting is that the survival skills they have developed in the current market may well prove as valuable in the managed services future as any attempt they make to differentiate themselves.

This was last published in February 2012

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