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MPS and Managed IT: Convergence or Conflict?

MPS and Managed IT: Convergence or Conflict?

February 9, 2022

As MPS providers move into the digital-centric, hybrid world, some are adapting their business models to include IT services. To drive the best outcomes for customers, MPS and Managed IT service providers should collaborate as transformation partners.

Quocirca’s managed IT services study reveals that 86% of UK IT decision-makers would consider a single managed service provider (MSP) for both IT and print infrastructure. The convergence between IT and print is driving MPS providers to adapt their business models to include IT services. As organisations look to create secure and collaborative workplaces for the hybrid workforce, MSPs with cloud and security expertise will be positioned to differentiate themselves. How can MPS providers capture the IT services opportunity?

Changing workplace dynamics are creating IT complexity

After almost two years of disruption, organisations are faced with the reality of creating a secure and productive hybrid workplace. IT service delivery is increasingly complex, encompassing areas such as remote support and management, cloud enablement, security, collaboration tools, and provisioning and supporting equipment for both remote and office employees.

This all creates new opportunities for MSPs that can help organisations optimise workforce productivity and minimise security risks. Quocirca’s managed IT services study found that although they desire to shift the focus of IT resources and leadership to more strategic activities, companies are being hindered by legacy technology and complex IT infrastructure, which places a significant burden on internal teams. As a result, many are looking to outsourcing to address the challenges associated with handling IT in-house.

The study finds that companies are turning to MSPs to offload infrastructure, user support, security operations and management. Of ITDMs, 84% said they were already using MSPs, with a further 10% planning to do so in the next 18 months. As organisations continue to leverage the cloud and accelerate their digitisation initiatives, MSPs look set to take a deeper role in guiding companies with their technology roadmap.

In-house IT teams are stretched

Quocirca’s research revealed that legacy IT (52%) and complexity of IT infrastructure (48%) are by far the biggest challenges to managing IT in-house. The rapid shift to the cloud and associated security challenges top the list of concerns for ITDMs, and the managed IT services study shows that many are turning to MSPs to address cloud complexity and security issues that arise from diverse infrastructure and legacy technology.

Outsourcing a significant amount of IT infrastructure is a popular strategic option for decision-makers. One in 10 already outsource all of their IT to an MSP, and this will increase, with a further 6% planning to outsource all of their IT infrastructure within the next 18 months. This is the primary reason for using an MSP to free up IT resources to focus on strategic activities, closely followed by strategic consultancy and direction. Potentially, this could mean IT-centric MSPs will increasingly lead customer relationships, building print into their offer, rather than vice versa.

Building credibility in IT

The print sector has long moved away from the traditional transaction-based sales approach. Vendors today are focused on offering a range of managed and “as-as-service” options that help to maximise customer lifetime value and build more sustainable business based on recurring revenue streams.

Office print volumes are unlikely to recover to pre-pandemic levels, and while manufacturers and resellers recognise the need to expand their business beyond print, the key challenge is how best to build the requisite expertise to be seen as credible in the IT services space.

The research findings suggest a strong appetite among ITDMs to use a single provider, with 86% of respondents saying they would consider using a provider that offered both managed IT services and MPS. However, the majority prefer IT services providers with print service capabilities – with over half (52%) stating they would only consider only using a Managed IT Service provider that offers MPS as part of their service offering. With almost 60% of respondents using a managed print service, if incumbent MPS providers are to mitigate risk, they need to boost their credibility and establish a strategy that will enable them to grow their IT service capabilities.

Acquisition has proven to be a popular path. Several OEMs, including Konica Minolta, Kyocera, Ricoh, Sharp and Xerox, have acquired IT specialist firms to support them on their journey towards becoming IT services providers. It is likely that consolidation, mergers and acquisitions will remain constant in the print and IT sector.

However, full convergence of both channels is still a long way off. MPS and Managed IT require vastly different skills and processes. Billing and sales cycles are widely different, and remote platforms designed to manage the print environment are not necessarily suitable for IT infrastructure. In many cases, providers that that could work together to pursue new markets and business models may find that their systems don’t connect seamlessly.

Partnering for transformation

Print-centric resellers recognise that they do not have the resources to learn every technology they might support. Many have improved technical know-how and enhanced their customer offering through acquisition, while others have invested in new hires, bringing in expertise to help them succeed. However, in light of the IT skills shortage, it is likely that partnering with MSPs, which are skilled at managing complex technology infrastructure, could be the way forward if they are to capture new opportunities.

Although becoming a white-label service provider to MSPs may not seem attractive to existing MPS providers, this approach removes the pressure and cost to build up skills in areas where MSPs are already skilled. It also frees up resources to focus on bringing additional value to customers’ print environments and integrating this within a broader managed IT services offering. Through collaboration MPS providers can improve their value propositions and competitive advantage.

As the IT landscape grows more complex, MPS providers need to embrace IT partnerships to innovate and grow their business. The two worlds can coexist for mutual benefit – and for MPS providers, forging new alliances with MSPs skilled in security, cloud and analytics will be key to future success. There has never been a better time to innovate and develop a new wave of managed services, extending legacy contracts to include collaboration, cloud, infrastructure, security and digital transformation tools as-a-service, packaged to address the needs of the hybrid workplace.

Read more in our Managed IT Services Opportunity Report.

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