The impact of MSP marketplaces on solution and service providers' channel dynamics

Organisations (small, medium and large), B2B marketplaces and sales and marketing channels are adopting digital technology. The goal of this adaptation and its implementation is to improve effectiveness, value and innovation.

No business or organisation is left out. Even the process of discovering, trialing, provisioning, consuming and scaling Everything as a Service (XaaS) in sales and marketing channels has evolved significantly over the past years.

The pandemic put everyone under heavy tests. Managed Service Providers (MSPs) were not left out as they were forced to bring out their best qualities.

They say when the going gets tough, only the toughest get going. This was proven true as MSPs immediately began seeking ways to ensure that their customers who had small, medium and large enterprises furnished the technologies and services required to facilitate the accessible work-from-home experiences for their organisations.

“MSPs are retooling their business models and adding more intelligent instrumentation to capitalise on new Everything-as-a-Service revenue streams and digital transformation investments. XaaS offerings are getting more sophisticated and robust, and changing the dynamics economically, as businesses require less CapEx, but more OpEx given consumption-based pricing models. It’s not easy to navigate the transition, but what we are finding is that with the right strategy, MSPs are benefitting greatly by digitally transforming themselves, and tapping into the kind of innovation we are passionate about bringing to the market.” explains Scott Chasin, Chief Technology Officer at Pax8. He is a cloud marketplace provider who has experienced great growth over the last several years.

“MSPs can successfully deliver on the demands of our increasingly hyper-digital world, despite ongoing supply chain constraints and tight labor markets. In fact, in this uncertain economic time, taking advantage of integrated systems like ours, which blend the marketplace with PSA platforms, is a must-have, not a nice to have.” Chasin credits their MSP members with bringing Pax8 their most significant challenges to solve.

The global professional services sector is expected to go up to $7.1 trillion (about $22,000 per person in the US) in 2025 from $5.4 trillion in 2021. This climb is expected to fuel the size of the global professional service automation software market, which is projected to hit $16 billion by 2025. This is according to Grand View Research.

Nick Heddy, Chief Commerce Officer at Pax8, said, “We are going beyond traditional cloud marketplaces. As a result of the global pandemic, our customers, Managed Service Providers, experienced a surge of interest in XaaS and, by extension, the need for reliable and profitable cloud infrastructure services. Those MSPs who jumped right in to help their customers outperformed during the pandemic, and they are now enjoying continued growth as they learned how to serve their customers in better ways – accelerating, for example, digital transformation initiatives that may have been underway at the time, but lagging until the shockwaves of work-from-home and the borderless environment hit everybody at once.”

Heddy further said that MSPs need to replace traditional revenues and reimagine how they efficiently procure cloud services and applications and manage them for greater operational automation.

“We are integrating our marketplace into all ecosystems to give our partners the choices they want, and to bring the best new solutions into the world of Pax8 after we carefully vet each one,” Chasin said. “We are constantly working closely with our MSP members and the vendor partners, whether in real-time communications, collaboration, workflow, accounting and finance, cybersecurity, or entire ERP systems, all of which can be delivered as a service, via public, private and hybrid clouds.”

This is a challenging time of growth for MSPs as they are finding themselves at the crossroads of their industry's growth, cloud services, and the growth of applications that consume cloud services in the XaaS era.

marketsandmarkets predicts that spending in the cloud-managed services market will reach $139 billion by 2026, up from $86—billion in 2021.

That is not all that will expand. The breadth of services will also expand. Today, cloud-managed services span mobility, security, and data services, the report indicates, with the overall goal of cloud-managed to deliver “hassle-free management of businesses, network, security, data centre and mobility services.”

“Navigating the pandemic was an intense time for every business, including ours. At the same time, it was an inspiring time as we were able to help so many of our members and vendor partners. Necessity was the mother of invention, and for those MSPs and other businesses who rallied – who adapted – who move quickly. Innovation accelerated and we are benefitting from all the hard work undertaken under the worst of circumstances.” Heddy said.

Chasin said, "In the IT world, optimisation is a key component for success. Even if something works, why not try to make it work better? If there are areas where a process can be fixed, streamlined, or otherwise improved, why not utilise that to make your operations as seamless and efficient as possible?”