Simply, the MSP business model makes sense. Small and midsize businesses can’t afford expensive enterprise software management packages or the highly trained and experienced personnel required for implementing and maintaining such software. But these businesses still have mission-critical networks.

MSPs give small and midsize businesses the ability to manage their networks at a reasonable price by selling them access to management tools on a monthly subscription basis. A midsize business may not be able to throw down tens of thousands of dollars on a network management tool, but it can afford a few hundred dollars per month to make sure its network is healthy.

MSPs will continue working the small to midsize business domain in 2001. They’d see little benefit in targeting larger IT shops, which can afford their own management packages and the people to maintain them. Most large companies already have complex management systems in place, and have little incentive to throw those investments away to move to an MSP, at least in the short term.

Also, BMC Software, Hewlett-Packard, Tivoli Systems and other management software vendors that sell the tools MSPs use to monitor customer networks aren’t going to let MSPs snatch away their large bread-and-butter accounts.

Ultimately, these vendors will get into the MSP market by setting up their own MSP divisions or through acquisition.

Now more than 50 companies call themselves MSPs and have their own industry-promoting association. But we should see some market consolidation in 2001, with specialty MSPs merging or partnering with MSPs offering a broader array of system and network management services. Customers like one point of contact, after all.

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