Cheaper Than Dirt …The Future of MSP

I think I am becoming a bit cynical on the MSP front. It is not because of my special insight or expertise in cloud computing (well maybe a little). It is not because I am tired of hearing about MSP services and everything that goes with along with it (ok it might be). It is not because I think that the entire MSP market is going to shrink massively (it is…) It is because most pricing models cannot sustain long-term scalability and growth.

I am not sure who the first person to yell out some per device cost was. But I sure can see the droves of IT business owners that followed suit and started pricing their services similarly. I constantly see people asking, “What do you charge for XX.” Umm …Seriously? What has this industry turned into where the future success of one’s livelihood is dependent on a price from someone from across the country?

You price your services by what you can charge for them and by what your costs to provide such services are. If you do not know either then you are setting yourself up for failure by pricing managed services using someone else’s pricing model.

You sell your services not based on the pricing, but on the value you are providing, to each individual client. If a client cannot see the value, then that client might not be a fit for your services, or you may not be teaching the client what the value of your services really is.

As more of this crazy pricing occurs and the inability to teach and deliver value, the price of managed services will fall, fall, and continue to fall …until it is literally cheaper than dirt. It is called commoditization.  Commoditization of managed services is already happening in most markets.

As we voyage through this cheaper than dirt, commoditized market, nothing is more important than differentiation and innovation. Oh, and take a look at that cloud thing… :-)