In a word scale. That's the name of the game, is not it?
Managed Service Providers (MSPs or) offer IT services for small and large businesses. They focus generally on high quality customized services based on a high level of IT and network technologies. Their contracts to end customers (or subscribers) are focused on customized business solutions for customized implementations. Low-scale, high-margin term contracts. MSPs now have a couple of decades ago. The industry has this approach as "your mess for less" hosted services.
But that is not the only solution.
larger growth through replication
Citrix Service Provider (or CSPs) looking to optimize their growth based on replication. The Service Level Agreements (SLAs) are still high quality, but are subject to a catalog of applications that used by a large and growing pool of small and medium enterprises to provide high-volume business.
There is at this scale where CSPs thrive because they use the same infrastructure over and over again to provide service delivery.
their terms are much more flexible than their counterparts in the control and they depend on a multi -tenant approach to reduce costs and drive margins. In most cases, the same IT engineering or networking expert will work with tens (or even hundreds) of clients.
There is room for both models in the industry today.
the key to a sustainable business model is the cost for the end user. Like giant Hyper cloud providers such as Amazon Web Services provide a low cost, hyper scale solutions MSPs under tremendous pressure set to reduce prices. In time contracts expire they find will be of 30% of contracts not extended upwards. As a result, MSPs will deliver squeezed at a lower price more scalable solutions.
Which is better, MSP or CSP?
It's really too early to say which model is better, but the market overall is through a massive transformation. Most of CSPs in the market today actually had (or have) an MSP business model.
use by a normative, programmatic approach from Citrix, these MSPs move into the higher scale cloud-based service model and compete well with the hyper clouds. The most productive, highest average revenue per user (ARPU) and lowest churn CSPs are offering bundles of applications in their catalogs on specific market verticals.
These service providers grow their top line at 20%, 30% and even 40% yoy, while a good margin is maintained. SwizzNet, one of our US partner recently told me: "We have found that with a bunch of applications for accounting practices gives us a great value for our customers and a scalable alternative to in-house IT management provide a quality service. "
This model high volume account produces income. More importantly, the model is large margins creates based on a replicable sales process that translates for you into a successful, sustainable business model.
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