Microsoft announced recently they will bring on 7,500 partners per month on top of their 400,000 base.  These new channel partners are mostly ‘‘shadow” channels, meaning they are companies that are not really focused on the transactional side.  AWS, Google and IBM are going into the same direction and these ecosystems are growing faster than they ever grown in the past.  This is the current gold mine.

This will surely affect the traditional VARs and MSPs, who no longer own their customers’ projects from end to end.  They will need to try to open new doors of opportunities beyond their traditional offerings, such as VOIP and UCaaS. There are now 40 layers of tech stack nowadays and managed services’ margins are down. 70% of the MSPs are looking at an exit in the next 5 years.

Consolidating a price per device or per month may have provin profitable for over a decade but now it makes it difficult for MSPs to increase their prices.

10,000 companies are competing in the 7 layers of security.  Very few have end to end solution.  There will be horizontal players that will consolidate that market.  VARs and MSPs should always look at innovations and always be flexible to check out other vendors.  In the future, 73% of customers will buy direct or through a marketplace.  This is why VARs and MSPs have to build their own brand in front of their customers.

They should look at the fastest growing market, which is RPA (Robotic Process Automation), which is basically workflow around business transformation.  This channel represents a massive opportunity for MSPs with triple digit margins.

To view Forrester’s predictions for 2019, please click here.