‘US managed service providers are killing themselves’

UK managed service providers (MSPs) can learn a lot from their self-destructive US counterparts, who are cutting prices in a bid to stay competitive, says The 2112 Group’s Larry Walsh.

Speaking at the 2013 CRN Channel Conference, the channel expert said: "The UK can learn a lot from US mistakes.

"US MSPs are killing themselves by dropping prices for no reason – just because another company dropped their prices and they thought they had to follow suit. But really it’s about maintaining value for your customers.

"A lot of companies failed when migrating to managed services. They treated it like a product but its not, it’s a business model."

Walsh – a former publisher who founded the Channel Vanguard Council in cooperation with CompTIA – also criticised Microsoft’s cloud offering.

"Cloud is a myth – there’s no such thing as the cloud," he added.

"Microsoft killed the cloud. They ran a bunch of commercials on TV where there’s unicorns and fairies and magical things and put it in the cloud. It was never like that and never will be. It’s about managed services."

Walsh added that being a managed service provider, if executed correctly, offers higher profits and a more sustainable business model with recurring revenues, but said that a particular challenge was finding skilled engineers and the cost of training them.