Software adds to MSP woes

A recent survey conducted by MSP University and sponsored by GFI MAX, raises an important issue as to how well software developers understand the differing needs of cloud services and Cloud Service Providers (CSPs), compared to the long history and applications development traditions of legacy on-premise applications.

This follows on from the discussion CSW recently hadwith Matt Quinn, the CTO of Tibco, in which he pointed out that the granular nature of the cloud now allowed – indeed was starting to demand – that applications became much more specific in their functionality. Rather than have the traditional  tendency to be a bit of a functional catch-all, applications targeting cloud environments need to stick to one primary function rather than carry a lot of user-selectable options.

In the cloud, it is now quicker, and more flexible, to select the right single-function application than spend time optimising a more generalised application for a tightly focussed task.

The GFI-sponsored survey seems to provide evidence that an increasing number of Managed Service Providers (MSPs) – which can easily find themselves at the sharp end of re-opitmising applications for different client needs – are now butting up against just this issue.

The bottom line of the survey results is that nearly One-Quarter of MSPs say their businesses would be more profitable with more agile software. In this context it is fair to suggest that agile means more single-function apps from which users can self-select, particularly as adapting to customers’ evolving needs, against a background of shortages of skilled employees, is seen as one of the industry’s biggest challenges.

The independent, blind survey of 185 managed services providers set out to explore the agility, use and profitability of software solutions used by MSPs, as well as the business challenges facing the MSP community. Against a background where nearly two-thirds of respondents said that demand for managed services has increased over the last year, nearly half reported negative issues with the key systems software they are using.

For example, 43 percent said they are using less than half of the features available in their software solutions, indicating either that the solutions are not being used to their maximum potential, or are over-specified for the task they are set. Nearly 25 percent said their businesses would be more profitable if the software solutions that they’re currently using were more agile and better fitted the evolving needs of their customers.

Nearly the same share, 22 percent, indicated they sometimes buy more licences up front in order to get a good deal and then don’t use them while an additional 6 percent said they often or always purchase more licenses than necessary.

Perhaps the most obvious indicator that something is wrong in the state of MSP software is the fact that 47 percent of the MSPs surveyed said they would consider breaking their contracts with their current software supplier to move to another vendor, with cost savings and the ability to offer better software or better service cited by the vast majority of them as reasons to move.

There is, it has to be said, some signs that MSPs are their own worst enemy here, for the survey also showed that 55percent of them spend less than £650 a year retraining staff on internal systems, while 38 percent devote less than 10 hours a year on that activity each year.

The survey also shows there is a definable negative impact on generating new business as a consequence of software issues. For example, 18 percent of respondents said they sometimes or frequently are forced to turn away business due to not having the right solutions to handle prospective customers’ specific needs. Of those who prefer not to turn away business, 42 percent admit to paying more to customise offerings so they don’t turn down new business.

And new business in the future will bring the MSP community even more challenges requiring new software and services if they are to continue to compete. For example, 45 percent of them believe adapting to their customers’ evolving needs, such as Bring Your Own Device and  cloud services, will be their biggest challenge yet. And this is at a time when nearly the same share, 41 percent believe a shortage of skilled employees will impact their ability to grow their business.