In just a few months the MSP (management service provider) market has made the transition from latest industry buzzword to legitimate player in the services delivery landscape.
Despite some early success stories, however, experts say customer confusion, increased competition, and scalability hurdles still lie ahead for an MSP market seeking a definitive identity.
Last week, 19 companies launched the Management Service Provider Association at PC Expo. The Wakefield, Mass.-based consortium was formed in hopes of educating the marketplace to understand just what a management service provider is and how it can help businesses, said member Jon Gettinger, marketing vice president at iSharp, in Redwood City, Calif.
The group defines MSPs as those providing IT infrastructure services on a subscription basis.
The organization intends to develop standards and best-practices guidelines for MSPs, Gettinger said.
Corey Ferengul, an analyst at Stamford, Conn.-based Meta Group, said that, because the concept of MSPs evolved quickly from that of ASPs (application service providers), confusion abounds.
"We've seen [the MSP market] go from zero to 100 miles an hour in no time flat," Ferengul said. "The model for MSP has a lot of potential, but education is a barrier."
Ferengul said managed services can greatly reduce a majority of the risk and failure problems currently plaguing the IT industry and can give small to midsize businesses access to vendors and services that they may never have been able to afford or justify.
Along with enthusiasm about the Management Service Provider Association, there is some skepticism. According to some sources, "major" traditional management product vendors may decide to take up the services game themselves, leaving most MSPs to forage in a contained small to midsize business niche.
Collaboration issues exist as well. Agreeing on a set of MSP standards will prove difficult for the association because many MSPs, particularly start-ups, have never faced competition before, Ferengul said.
IT obstacles for MSPs include adjusting to major vendor upgrades while maintaining 99.9 percent reliability to customers, as well as scalability problems that may develop to handle a customer base potentially doubling and tripling in size very quickly.
As traditional and nontraditional services vendors rush to promote themselves as "true" MSPs, customers must determine who can help them and why based on their business needs, said Caryn Gillooly, an analyst at Framingham, Mass.-based Hurwitz Group.
"Unfortunately, the burden is on the customer," Gillooly said. "Everyone wants to be an MSP right now. Simply looking at the [MSP] tagline isn't going to do anything."
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