How do you feel about the future of MSPs and IT Support?

Originally posted on reddit.com/r/msp by /u/tntgav

When I say future, I mean in five years from now.

I’ve been working at an MSP for the last decade, more or less, and in that time I’ve worked my way up the ladder at the MSP where I work.
For a few years now I’ve been concerned about the longevity of our typical MSP business model and IT Support in general, especially selling into the 1-30 user bracket. Our business, and I assume a lot of yours, get a lot of our revenue from doing workstation/laptop/server/network installs with ongoing support and the subsequent markup that comes out of that. I just don’t see that persisting into the future for a number of reasons:

Cloud services are making it simpler and easier for clients in most sectors to replace their old, server requiring, line of business applications.

Technology is constantly reducing in price, as well as being easier to configure initially – this decrease in price and complexity drives down price.
A complete simplification of a lot of services, especially with the massive increase of browser based, industry specific applications and a massive increase in usage of common type software (CRM/PSA/RMM). We can even see this in our own sector with the introduction of a lot of browser based PSA/RMM tools.
As systems become less complex as well as less geographic, the entry point for delivering support services reduces and this leads to more competition and a requirement to be more price competitive.
We are now looking at a workplace where millennials are entering the workforce, people who were bought up with an understanding of basic IT services. With the configuration of services becoming easier and people becoming (slowly) technically more savvy.
All the major players are throwing billions into their cloud based services. This should be an indicator on the direction the industry is moving. MS killed SBS for a reason (other than it was Frankenstein mess ;))
BYOD – we are seeing in our MSP an increasing amount of clients who are happy buying their own kit, as they know their newer systems are easier to configure.

Software is becoming more and more stable, user friendly and easy to setup, reducing the amount of support needed in certain scenarios.

Take Office 365 for example, it drastically reduces the complexity and requirements of a clients network and also gives almost enterprise type uptime/features for many companies – but I see it as a short term sticking plaster. If your businesses are anything like ours, we are drowning in Office 365 migrations at the moment. This is great for us in the short term, but in the long term it’s a nail in that old business model. Over time though these services are going to stagnate in terms of their growth as we hit implementing it at most of our clients.

A mid term solution is cloud desktop, but reselling this with margins similar to what we get at the moment is exceptionally difficult. The stickiness is high, but in the long term if clients are going to be largely using browser based SaaS applications, are these going to be as much of a requirement for small businesses?I’ve been following Azure since its inception and I’ve been able to guess pretty accurately where they are going next. If I would have said six years ago that Active Directory as a cloud based SaaS will exist, a lot of you (including myself in the early days) would have laughed. Now that’s starting to become a reality. I don’t foresee it being long until the Azure MDM stack (ADaaS, Intune and Office 365) become a trio of products that’s capable of providing excellent environments for IT management and for the clients. It would not surprise me in the next few years if we see MS release an Active Directory that is fully configurable through a web browser. Imagine them having a best practice AD deployment that you can setup with a few clicks and forms with preset GPOs, security, software deployments etc and adding a workstation to this domain is a simple as logging in. This is already possible in some ways with Azure AD and Intune, but it’s in its infancy at the moment. As this gets perfected over the next few years it will be a real problem (and subsequently an opportunity).

I’ve been following Azure since its inception and I’ve been able to guess pretty accurately where they are going next. If I would have said six years ago that Active Directory as a cloud based SaaS will exist, a lot of you (including myself in the early days) would have laughed. Now that’s starting to become a reality. I don’t foresee it being long until the Azure MDM stack (ADaaS, Intune and Office 365) become a trio of products that’s capable of providing excellent environments for IT management and for the clients. It would not surprise me in the next few years if we see MS release an Active Directory that is fully configurable through a web browser. Imagine them having a best practice AD deployment that you can setup with a few clicks and forms with preset GPOs, security, software deployments etc and adding a workstation to this domain is a simple as logging in. This is already possible in some ways with Azure AD and Intune, but it’s in its infancy at the moment. As this gets perfected over the next few years it will be a real problem (and subsequently an opportunity).
The same with something like OneDrive, once this is perfected and it works well I think the concept of a file server on-site for small businesses will slowly die.I think this will largely affect the 1-30 bracket of size business. Larger clients are always going to require good quality IT guidance. I foresee the role of an MSP in five years time being a lot more focussed on consultancy of these products as well as development and interactions of SaaS products.

I think this will largely affect the 1-30 bracket of size business.

Larger clients are always going to require good quality IT guidance. I foresee the role of an MSP in five years time being a lot more focussed on consultancy of these products as well as development and interactions of SaaS products.
I can’t help but foresee in every direction a difficult decade for MSPs providing IT support. I’m not just thinking of this from a business point of view either, as a technical person I am also looking at what technologies I should be learning to future proof me and my own career. I am really struggling at my current MSP to get this across to the other decision makers. One is an old school, NT server at heart guy who has no interest in cloud technologies of any sort and the other is a fantastic salesman/boss with a bit of technical knowledge but he sees the amount we are making at the moment on standard technologies and struggles to grasp the concept when we are doing so much work in the present. He’s dismissive of technologies or things that don’t make us as much margin as we currently make on things. Our engineers are very server orientated, there’s almost no collective scripting/development knowledge (I’m the only one who can code) and none of them seem even interested in cloud stacks like Azure/AWS. They think a Powershell script is

Our engineers are very server orientated, there’s almost no collective scripting/development knowledge (I’m the only one who can code) and none of them seem even interested in cloud stacks like Azure/AWS. They think a Powershell script is wizardry. I think the business is due for a hard fall in the next five years. I’m sure some services can be kept, but when a customer is paying $50 a month for internet, and $20 per user for their LOB app that works fine in a browser it’s going to be very difficult to go in and sell support services for $100s per month.

I’d love to hear what others think and how you are insulating your MSP from these threats while still making a decent margin. I’m also interested to see if anyone thinks this is not a threat at all, maybe I am overthinking it? A lot of this is speculation and I recognise no-one can really truly know what will happen in the next 5-10 years but to me all the signs point towards it being rough for those who are not prepared.