Cisco has long supported managed services and had a partner program for MSPs. But for the last two Partner Summits, the topic of managed services has been top of mind. The company has called it its biggest route-to-market priority, has urged partners to invest more in managed services and has incentivized partners to build managed services around Cisco technologies.
So just how big an opportunity is managed services for the networking giant? For Cisco Canada, it’s enormous.
Zack Dickson, vice president of Cisco Canada’s partner organization, says the company expects partner-ed managed services will represent
half of its total addressable market in Canada by 2025. The company sees managed services growing at about 15 points compounded annually over the last five years.
But managed services are not new to the market. It’s been the hotbed of channel growth and profitability for over a decade, and many Cisco vendors have long embraced the MSP as a critical type of partner. So what’s changed? Dickson cited a few factors, but most notably, the complexity of business technology environments today and the lack of talent to manage that complexity and get businesses the results they want from their technology investments.
“This is setting off light bulbs for our partners,” Dickson said. “We have an opportunity to take our technology and their skills, put it through a tailored approach for building and scaling managed services, and take advantage out there. [Managed services are] twice as profitable for our partners as traditional resale.”
Dickson said Cisco has ramped up its team supporting MSPs and the services they deliver and has rolled out “a very meaningful kicker” to its sellers to focus on partner-managed services in key markets, including SDWAN, full stack observability, and SASE.
“Our customers want to buy this way, and we’re putting a lot of wood behind this arrow,” Dickson said.
The company is also trying to better understand the current managed services landscape in the country, expanding how it keeps track of partner managed versus resale bookings to establish the baseline for how much of its business is currently in managed services. Dickson says Cisco Canada thinks it’s about halfway to that 50 percent goal.
The definition of managed services, and therefore managed service providers, is also expanding as more businesses look to outsource the management or more of their technology and technology-adjacent infrastructure.
When one pictures a managed service provider, the image is probably not of EllisDon. Yes, the company is a significant building builder and construction services company. But an MSP?
“Our managed services practice began 11 years ago,” said Jody Becker, executive vice president of infrastructure services and technology at EllisDon.
It all started with its first forays into building smart buildings for customers. In short, those customers discovered that while they liked the benefits of their new investments, they didn’t necessarily want to manage them themselves. And thus, EllisDon became a managed service provider.
That trend is accelerating, Becker said. As more companies look to build more intelligence into their buildings and as automation becomes more pervasive in driving efficiency, EllisDon clients are turning to the company for the ongoing support of their environments. The ability to manage much of a building’s infrastructure and capabilities through IT systems is changing the archetype of a building superintendent.
“We can’t have Schneider [the friendly handyman from the TV series One Day At A Time] sitting in the basement clanking on things with a wrench anymore,” Becker said. “It all dramatically changes how we think our managed services practice.”