MSP - the most debated IT acronym?

We were recently asked by one of our clients, a top gun from the service business, to carry out a survey to help find addressable markets for their Cloud Solutions.

We all know that our profession loves acronyms… Acronyms are the greatest asset for marketing guys looking to revamp an old idea/product/solution with some new features. We won’t go into why that’s the way the business works, but we should point out the risks of sharing terms when a definition hasn’t been fully set up and accepted by everybody.
One of our client’s questions was about recruiting MSPs, not the Wikipedia definition of MSPs, not the IBM definition of MSPs, not even the IDC definition of MSPs, but their own definition.
Come on guys! If consulting companies work hard to establish a definition, it's so that the definition can be used. If language exists, it is to communicate with a shared sense of the meaning of the words...Well most of the time anyway... If a car is a car (except for Tesla), is a Cloud a Cloud?

So we had a lot of discussions about those three letters: M-S-P.
Most vendors try to put all their dreams and expectations behind those three letters, a bit like VARs in the 80s, since nobody has ever qualified their own activity as “VAR”.
The acronym MSP is like the acronym VAR, it denotes not an activity, but a quality: the quality to sell or resell digital solutions as ongoing services.

There are different schools of thought regarding MSPs: those who think that anybody reselling something that will consume IT resources as a service is an MSP, which therefore also includes ISV-SaaS, and, at the other extreme, those who think that MSPs are just the Cloud Providers or Cloud Service Providers. In the middle you find those who include resellers that sell third party Cloud /SaaS services.
What we have seen from our client’s request is that MSPs usually (but not always) include the two following categories:
  • Cloud Providers / Cloud Services Providers
  • Managed Services Resellers

and sometimes also ISVs who have their solutions as SaaS.

We ultimately arrived at this segmentation for Cloud Activities :

Cloud activity segmentation- active Cloud companies

We also did some work on Cloud businesses to find out where they come from (for EMEA only).
Not many are identified as really “Born in the Cloud”, though you can add some from the category “Not IT but Cloud”.


2016 - Cloud segmentation qualitative approach

Finally we researched those who are not in the Cloud to find how far they are from becoming a Cloud partner.
To do this, we performed a Scoring exercise, comparing the characteristics in profiles of Cloud Active partners to those who are not active and scoring the inactive partners according their common characteristics. (We have developed in-house software to industrialize this process).

For partners that are inactive in the Cloud we find the following segmentation.
The % indicates the chances that these companies have already developed a Cloud activity or will develop a Cloud activity soon. We have checked this and it really works (and saves a lot of time).

Non active Cloud partners, with a chance they will develop an activity soon North America EMEA TOTAL (no duplicates)
70 % and above of the max score (Cloud) 0 1 1
60 - 70 % of the max score (Cloud) 0 15 15
50 - 60% of the max score (Cloud) 5 117 122
40 - 50 % of the max score (Cloud) 138 698 836
30 - 40 % of the max score (Cloud) 909 3023 3932
20 - 30 % of the max score (Cloud) 1994 9113 11107
Below 20 % of the max score (Cloud) 6988 59509 66497
TOTAL (no duplicates) 10034 72476 82510
                           © compuBase 2016
There are very few above 50% because those are the ones that are constantly checked to see if they have already started their Cloud activity.
We use this type of segmentation when clients want to enlarge their targets with good potential partners (over 30% is good).


In conclusion, when you want to tackle a new or moving market, DO NOT USE a new acronym if it hasn't yet become a standard.
Define precisely the attributes partners must have to work with you.
The acronym is just a label. Putting a label on a box doesn't mean what's in the box corresponds to the label.