Security Solutions Offer MSPs a Great Opportunity for Business Growth, But Service Providers Must Address the Licensing Issues

Managed services providers (MSPs) are experiencing a world of change these days, as cloud computing and the “as-a-service” trend continues to grow and have a huge impact on virtually every aspect of IT.

Consider the impact that the growth of public cloud services from Amazon Web Services and other providers has had on IT operations. And think about how much virtualization technologies from vendors such as VMware has changed the way data centers are designed and operated.

As research firm Forrester Research pointed out in a 2013 report, entitled “The Shape-Shifting Tech Industry Channel Ecosystem”, while cloud computing has been a boon for the technology industry in general, channel partners “have to deal with shrinking product margins, skills shortages, and new competitor types”.

For the typical MSP, the business model has changed dramatically in just the last few years. Companies have moved from procuring on-site servers, storage systems, security tools and enterprise applications in the traditional manner to a services model that is designed to reduce costs and increase agility.

Hybrid models and success

Successful channel partners will be those that operate under a hybrid business model, Forrester Research says, combining on-premises and cloud delivery, and IT and business value. MSPs are expanding their services portfolios, the firm notes, in some cases using remote management and monitoring tools and remote network management technologies available from a number of vendors.

Even as MSPs grapple with the sea changes that are underway, information security represents a huge opportunity for business growth and competitive advantage. End-user organizations are making systems and data protection a high priority in the evolving cloud environment, and MSPs can be the ones to deliver security solutions—whether they are standalone offerings or “baked into” other platforms.

Another recent report from Forrester sheds some light on the potential opportunities of offering managed security services. As security and risk professionals scramble to address new business complexities and threats, they are turning to third parties to extend their organizations' security capabilities with as much efficiency as possible, according to the report, “Market Overview: Managed Security Services, Europe, Q2 2014.”

Although the report focuses on the European market, Forrester says managed security is a growing business across the globe.

In a report from 2013, market research firm Infonetics Research stated that organizations “are moving to managed security services to deal with increased attack volume and complexity, manage security product sprawl, deliver consistent security for a distributed workforce and device population, and provide security for cloud infrastructure.”

The report, “Cloud and CPE Managed Security Services”, which analyzes the market for cloud- and customer premises equipment (CPE)-based security services delivered by service providers to small, medium and large businesses, includes a forecast from Infonetics that sales of cloud-based security services will grow 69% over the next five years.

This all sounds good, but managed services providers that are looking to develop and provide a portfolio of security offerings need to consider that security offerings can also present management challenges and revenue risks. This is particularly true in the way licensing models are presented by vendors.

The burden of traditional licensing

Traditional fixed licenses for end-point security technology that lock in MSPs and/or their customers for multiple years can become a financial albatross. But by leveraging options that are available today such as streamlined licensing via a single cloud-hosted console for all customers, MPS can reduce the management hassles and costs of licensing.

With such solutions, they can easily manage all of their customers in one view and use a dedicated self-service portal to provision licenses. At the end of each month, they are invoiced only for the total number of seats protected.

And with these types of offerings, whether you’re an experienced MSP or planning to transition from being a value-added reseller to the MSP model, you can quickly begin using MSP facilities such as monthly licensing and remote customer security without abandoning yearly license plans.

This type of licensing management efficiency and flexibility can give MSPs a huge advantage in the marketplace as well as help keep costs down. They would not face the challenge of needing to predict how many end points their customers will need to protect in two or three years.

A security solution should first of all provide excellent quality, and the ability to offer protection for corporate assets. But it should also deliver the flexibility and ease-of-management that MSPs need to compete in today’s rapidly changing business environment. They can then free up internal resources and focus on creating and delivering enhanced service to their customers.

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