Archive for December 12th, 2019

Managed Service Providers (MSPs) are winning in the new age of business telecom

December 12, 2019

MSPs are the new force in Unified Communications, and they are taking on the business telecom market at an accelerating pace, worldwide.

MSPs are winning an increasing share of the business telecom market
MSPs are winning an increasing share of the business telecom market

Through my business Datagate Innovation, that provides white-label telecom billing solutions, I am witnessing first hand, how MSPs are winning an increasing share of the business telecom market. From what we see at Datagate, this is very much a worldwide trend, and we see it directly in the USA, Canada, UK, Australia and New Zealand.

This is happening for the following reasons;

  • Business customers want a closer, more integrated and higher level of service than what the large telecom providers can give. MSPs have a closer relationship and better understanding of their business customers than the largest telecom providers can ever have.
  • Business customers want a single point of responsibility if/when something goes wrong with their mission-critical telecom service. They do not want to have their telecom provider and their MSP arguing about who is at fault and who needs to fix something.
  • Phones and computers have converged. Both are now running on the same networks and the same technologies. Whether MSPs directly sell the phone system or not, they end up supporting it by virtue of supporting its underlying network platform.
  • It’s good business for the MSP. Reselling telecom services is very profitable. It’s contracted and recurring revenue, with all the ingredients for MSPs to add considerable financial value to their businesses.
  • Being the “single point of supply” for all information and data technology solutions, elevates the MSP to a more strategic relationship with the customer and makes the customer “more sticky”.
  • It’s not difficult for MSPs who have no prior telecom experience to enter this space. Through the various white-label wholesale providers and solutions available, they can get as deeply involved in the technology as they want, or leave it to others to provide services for them to resell. The more deeply they get involved, the larger are the recurring margins.

My Datagate colleagues and I estimate that about 20% of MSPs are currently reselling telecom services and the MSP-driven telecom revolution is still in its early stages. The timing is clearly good for the other 80% of MSPs to enter this space!