MSPs often face a difficult choice – aim for the broad marketplace or go vertical.
In a post-pandemic world, some industry experts believe that MSPs (Managed Service Providers) should diversify their offerings across several industries. To them, this reduces the risks to businesses and ensures they stay afloat, especially in times of economic volatility caused by rising inflation.
However, some believe there’s no better time for MSPs to go vertical than now. This way, they can climb higher on the business/IT value stack and reap more significant rewards in future.
According to a study conducted by Microsoft and IDC, MSPs that choose and implement a strategy for verticalization are likely to achieve massive success in the industry.
When we talk about verticals, we’re not focusing on industries like retail, automotive, healthcare and banking alone. Some MSPs have discovered that going vertical in newer technologies like cloud computing, cybersecurity, data analytics, big data, artificial intelligence, and additive manufacturing is quite advantageous.
Currently, there are massive improvements in cloud infrastructure, and businesses are hiring modern MSPs that specialize in these fields.
In this article, we’ll examine the optimal target verticals for MSPs, things to consider when choosing a vertical, and steps to take for success.
What is technology verticalization?
Thanks to the pandemic, several industries experienced an increase in remote work together with increased adoption of cloud resources. As a result, the cloud computing market cap is expected to rise from $445 billion in 2021 to $947 billion by 2026 – a compound yearly growth rate of 16.3%.
Therefore, there’s an increased need for cybersecurity and cloud experts. Consequently, MSPs need to develop their expertise in cybersecurity cloud and computing.
Going Vertical in the Cloud
The future of tech is in the cloud. IT experts at Web Tribunal believe that 30 percent of most companies’ workloads will be in private clouds by 2025, while 28 percent will be in public clouds. But, unfortunately, the shortage of skilled tech workers is impeding the progress of this sector.
For this reason, MSPs that take advantage of this gap and get certified in cloud computing are positioned for success. Analysts from Forrester believe that 60 percent of B2B buyers favor providers that are skillful and knowledgeable to meet their needs.
The importance of cyber security was brought to the fore in the past decade after several high-profile attacks on top companies, MSPs, and even regular customers. A recent study showed that 89% of SMBs – small and medium-sized businesses – who are regular MSP clients would consider switching to a new service provider if they can get the cyber security solutions they need. In addition, they’re also willing to pay 34 percent more for that service provider.
Moreover, because SMBs are a constant target of cyber-attacks, they have become more reliant on managed services businesses. Unfortunately, MSPs have also become a target for cybercriminals too. Hence, MSPs have to become specialists in cyber security so they can protect themselves and their customers.
Becoming an expert in this field also comes with added advantages. The MSP will have an in-depth knowledge of compliance requirements, industry-specific regulations, tech trends, and custom-made tools for the industry. This way, the MSP will offer more value, and luckily, customers are more than willing to pay a premium for such services.
Why MSPs should consider going vertical
Verticalizing around a particular industry is vital as they’re now more competitive and niche than before. Doing this will ensure the MSP is poised for success.
An in-depth knowledge of a particular industry allows the MSP to identify the major pain points of the clients and create a holistic solution(s) geared towards that need. Essentially, managed services businesses can now be on the same page as their customers.
How to choose the best verticals for you
An MSP must consider several important factors when choosing the best tech and industry verticals. Here are a few pointers. MSPs:
- Have to determine their domain of expertise
- Study their current client base to see which tech or industry domain is at the forefront
- Consider the market size
- Determine viability and growth opportunities available
In addition, MSPs would also gain from building an ecosystem of solutions, tools, providers, and vendor partners that can assist in helping to fix the vertical’s needs. This will allow them to offer holistic solutions to their customers promptly.
After making the decision on the preferred vertical, MSPs have to train their workers and hire specialists to improve domain expertise. That’s not all, they also have to build relationships that will help grow their customer base, improve vendor competencies to enhance their expertise in tech solutions that can solve problems for various industry and tech verticals.
The shift to verticalization
The primary advantage of a vertical strategy is that the MSP will not only be an expert, but an insider in that market. This comprehensive understanding drives both opportunity and credibility.
So for an MSP to stay competitive and relevant, they must become experts in a specific technology or industry while taking the required steps to ensure their service offerings align.
Why choose Atera to go vertical
After choosing and focusing on your preferred vertical, you need a trusted partner to help take your business to the next level — and that is where Atera comes in.
Atera is custom-made for the modern MSPs. Our RMM software helps you get your work done in a more efficient and timely manner. In addition, the RMM platform gives you an edge as it allows you to discover any potential issue before your clients thanks to its powerful patch management, root cause analysis and more.
With the RMM platform, you can proactively spot issues before your customers with robust root-cause analysis, patch management, and more.
This RMM MSP software is a dream come true for all IT experts. It’s predictable, transparent and the technician-based pricing plan comes with unlimited workstations and servers.
Atera will help your managed services business work more efficiently, improve the productivity of your team and help you drive more revenue. So, why don’t you sign up for a free trial and get ready to be wowed?
See Atera in Action
RMM Software, PSA and Remote Access that will change the way you run your MSP Business