The managed service provider and the dung beetle

Dung beetles

Pictured: Not a productive MSP.

There are many people who are telling what managed service providers what they should be. But at N-able Technologies2010 Partner Summit in Scottsdale, Ariz. this week, NetEnrich senior vice president and general manager Justin Crotty offered his view on what managed service providers shouldn’t be.

A dung beetle.

So what’s the connection between the lowly beetle and the high-growth MSP? It’s the dirty work, Crotty said. Dung beetles do it. MSPs shouldn’t. Here’s why.

First of all, consider Crotty’s position. Currently he’s representing NetEnrich, which offers outsourced NOC services to MSPs, and NOC is just the kind of role that Crotty advises MSPs steer clear of taking on internally. He proudly admits that his company is “the dung beetle of the IT industry” along with other organizations that offer outsourced nuts-and-bolts baseline services. And before joining NetEnrich earlier this year, Crotty’s job was primarily connecting such “dung beetles” with MSPs as the man with the plan behind the growth of Ingram Micro’s Seismic managed services division.

Still, there’s logic behind Crotty’s argument. It comes down to the old argument of focusing on table stakes versus focusing on that which differentiates you from your competitors in the marketplace.

As Crotty puts it, there are a lot of “below the line” services that “must be done flawlessly or your customer experience suffers,” but for which customers frequently do not recognize value. The differentiation, what gets you recognized as a truly value-added partner, comes above the line – building out solutions, making suggestions and consulting.

“We’re all faced with limited resources and challenged to use the resources we do have in the most productive and margin-rich manner,” Crotty told MSPs.

And there are good reasons to move out of those “table stakes” infrastructure offerings – consider if you will the new price point at which Amazon Web Services is setting for starting to build out public cloud-based infrastructure: Free.

For those doing network operating centers today, Crotty’s message is to outsource it unless that’s really the core of your business, and focus on the context. For those not doing it, working with a company like NetEnrich is a way to add it to your bag of tricks without having to go through the expense in tools and resources to build it yourself. But don’t make the mistake of assuming that buying the right tools will automatically make the business. “I could buy the best utensils in the world, but I’d still suck at cooking,” Crotty quipped.

So what about it – are you today a “dung beetle” and is there enough margin in that to make it worth your while? Or are you looking for ways to outsource the expected and invest on the customer wow factor? Buzz back in the comments below and let us know.