So the MSP 1.0 is business model is not even widespread yet, and here is the new 2.0 model already. I guess you would like to see what the key differentiators between the two models are. The list is referring to an average, but not remarkable MSP 1.0 and MSP 2.0 practice. We are assuming that the MSP 2.0 model is heavily supported by 7C. The differentiations could be simplistic, but our aim is to show the possible limitations, challenges of the MSP 1.0 model, and the opportunities of the MSP 2.0.
You have to understand that MSP 2.0 is not a substitution of the 1.0 model. It is the extension. So you can move your existing 1.0 services forward, but with 2.0 as a companion your existing options are going to be very promising.
[Tech value vs. Business value]
Giving someone a technology solution is different than giving business value. The technology solution is only a part of the complete solution. If it is ERP, the software is just part of the whole internal processes, interactions etc. If it is an email system, it’s also just part of the whole communication of the company. The business value of an ERP project to is to drive out the fat of their processes, with automation and streamlining. The business value of the E-mail system is an effective, well-processed, internal and outside communication with limited access in a secure way. The technology is 30%, the rest is HR, management, controlling etc. In MSP 1.0, usually the MSP only does the technology part of the project. In MSP 2.0, he becomes the leader of these projects and evaluates vendors, does the project management, quality control, and the technology part. This is a big difference in value to the customer.
[Techy Slot vs. Trusted Advisor]
The general limitation of the 1.0 is that you are a technology service provider, and you provide value by technology. Yes, we know, you are providing business sense for the different solutions, but count how many times you got the following call, “Hi, we need to expand our operation abroad, please help us figure out the best way”, or “we want to penetrate the new market segment and establish a sales representative system, please help us to figure it out together”. Probably very rarely. Usually they call you with “you guys know an accounting package which can handle foreign currencies?’, or “can you guys deploy a server for MS Dynamics CRM to us”? So they put you in the “Techy slot”
There is nothing wrong with that, but the problem is that if you have to wait for them till they realize, they need something concerning technology it limits your opportunities tremendously.
As we have seen, in MSP 2.0 you give them business value, which means you are there if they have a major challenge in their businesses. You know where they are going, so you are able to become a Trusted Advisor, or Virtual Chief Information Officer, a VCIO. So you can be there well before there is something about technology, or you are even able to let them know the IT challenge, background of their decisions. That changes your opportunities tremendously.
[Thin focus vs. Broad Focus]
In MSP 1.0 you are focusing on technology, and your part of the client side. Maybe you give them quarterly planning sessions, even some kind of strategy, but the scope of these projects are limited in your service scope. In MSP 2.0 you think of everything globally from the client’s perspective. You think of your MSP 1.0 service like one piece of the pie, and you manage all the vendor, third party even the internal IT team in some extent. You negotiate the support contract for the ERP vendor, you sign the bill of the telco company and so on… So your focus is on the global value creation of the IT, not just the MSP 1.0 scope.
[Low level vs. high level]
With this in mind you can see that the MSP 1.0 focuses on technology and low level execution. MSP 2.0 focuses more on the management on a high level. Neither of them is better than the other, but truly these are different games. Most of the time, the Low level ground work isn’t visible for the C level executives, they are not able to measure, evaluate, just see the costs. In high level work you are dealing with them personally, you help them with their problems. Your visibility is very different.