Across the board, next-gen technologies are driving savings and adding value:
- Deloitte cites 57% cost savings for Fortune 500s through cloud-native serverless
- Companies using full-stack observability release 60% more products
- CI/CD cuts overall TTM by 30%
Any one of these achievements has the potential to be a major inflection point, depending on your business model.
And 2025 is certainly a year budgets and outputs are coming under greater scrutiny.
However, there’s a reason why some have these transformations at their fingertips while others are held back: the business model of the MSP they’re partnered with.
Naturally, over time and in parallel with the progression of cloud computing, MSPs have evolved their business models with varying degrees of success. The result, broadly speaking, is the emergence of three types of partners, which I will outline in more detail below.
Those at the forefront of this development are able to deliver market-leading savings and innovations. Those dragging behind are not.
Is your cloud partner ready to deliver?
The ability to deliver these savings and efficiencies comes down to your MSP or cloud partner’s delivery model.
In short, next-gen, business-first MSPs can, while those whose business models haven’t evolved with the times cannot.
An overview of the development
I’ll keep this brief. The evolution of MSPs from bare-metal to the next-gen partners of today can be split into three stages.
Stage one – just crawling out of the waters of hardware
The first managed service providers were pivoting hardware companies. They transitioned from selling bare-metal servers to virtual ones.
At the time, there was limited adaptation to the evolving technology. They sold these virtual servers:
- At scale – with a low margin
- Without anything but the most perfunctory and reactive account management
- With no emphasis on iterative improvement
It was a business model unmodified from the bare-metal era, which treated cloud almost like a utility.
MSPs who remain at this stage fail to take advantage of the closing gap between applications and infrastructures.
Stage two – taking the first steps toward an account-based delivery model
The second stage of MSPs’ evolution runs parallel to the confluence of application and infrastructure.
Essentially, you could now deliver the types of outcomes that would have been associated with application-level engineering through cloud engineering: performance optimisation, security augmentation, and much more.
The providers that recognised this fact pivoted to a service delivery model. They sold cloud services:
- As solutions to problems, i.e. if you’re struggling to hit this APM (application performance metric), we can conduct this review to offer that solution
- As a personalised service with account management
- As part of ongoing maintenance and reactive issue resolution
There’s a lot I could say here, but the core problems with this model – and this is a model that persists in the market today – are that it’s reactive and tech-led.
It’s reactive in that it waits for the client to take the problem to the MSP, and it’s tech-led in that the stakeholders identifying these problems do so from an engineering or operations perspective.
This is a model which treats cloud like a more traditional business service but fails to see how integral cloud is to businesses’ core objectives, especially as cloud and application-level problems merge.
Stage three – next-generation, business-led MSPs
The way cloud services should now be sold is as a vital component of overall strategy.
I say should because many feel held back by partners who are still operating in one of the two models above.
A true, next-generation managed services provider sells cloud services:
As a business-led, strategic partner: essentially, this means breaking down organisational silos so that the C-suite are able to place business targets at the heart of cloud strategy, with the MSP’s role being to facilitate, advise and deliver.
As a proactive, future-proofing process: with business-led goals established, a true next-gen partner will keep evolving client solutions in line with current best practices and targets. This sounds jargon-y, but what it really means is that the MSP will lead on the new technologies they know will best serve your goals.
As long-term deliverers of value: this current iteration of the MSP/client relationship is a result of good partners analysing the technology and updating their business models. This won’t stop.
I’ve no doubt that, as the underlying technologies evolve further, so will business models and the ways MSPs can add value. A good partner will recognise this and continue to change.
How next-gen MSPs can drive value in 2025
These are some popular ways MSPs are driving value right now.
Guide, accelerate and evaluate migrations and modernisation to M.A.C.H technologies
While organisations claim 61% of their technology stack will be MACH (microservices, API-first, containers, headless) architected by 2026, forward-thinking MSPs will be instrumental in guiding and accelerating migrations and modernisation projects.
Next-generation service providers will:
- Align migrations and solution design with key strategic objectives (as opposed to simply ‘delivering a MACH architecture,’ as a goal in itself)
- Accelerate and de-risk modernisation efforts by ensuring the adoption strategy matches the stated objectives, start point and underlying technologies
- Apply ROI frameworks to ensure the architecture is delivering on the goals set out (often reduced costs and increased scalability)
Transition from monitoring to observability for a twofold ROI
Monitoring is an increasingly outdated practice that fails to deliver continuity for modern apps.
In contrast, a recent study from New Relic demonstrates that observability-driven reductions in outage duration and frequency added up to a double ROI for the enterprises surveyed.
There’s no hard and fast rule, but this points to the scale of savings that can be made on outage reduction alone. Not to mention the deeper understanding of your architecture.
The main ways in which next-gen MSPs can help with this transition are:
- Consulting on initial tooling and strategy
- Executing the discovery stage
- Building an iterative support function based on findings
Unblock DevSecOps adoption
DevSecOps is one of those theoretically well-adopted practices that, in reality, has stalled for many teams.
There are valid concerns about DevSecOps slowing down feature releases, being too costly, and leading to drawn-out adoptions bottlenecked by skill gaps.
However, there are clear benefits to integration, and the practice is likely to become an essential in the near future.
In 2025, MSPs can:
- Support cultural change through strong relationships with the C-suite
- Bring structure to adoption through certified frameworks and methodologies
- Bring the skills in tooling and automation to ensure the benefits of DevSecOps don’t come at the expense of delivery
AI & automation
Now that the initial frenzy around AI adoption has subsided, businesses should be taking a considered view of how the adoption of AI and automation can deliver.
The opportunities are endless, but some examples of where MSPs can use AI and automation with purpose are:
- Using AI models to more effectively manage workloads and deliver both cost optimisation and performance improvements
- Contextual anomaly detection based on your own platform’s tendencies, i.e. using AI to analyse expected behaviours and identify potential issues before they become incidents
- Continuous compliance and risk management carried out by AI models, in contrast to single point-in-time analysis
What level of partner are you working with?
These 9 questions are designed as jumping-off points to help you decide what level of MSP you’re currently working with.
Not every business will fall neatly into a last-gen/next-gen binary, but this is a good place to start.
Value delivery
- Are you able to articulate the value that your MSP delivers to you across each service you use in a single sentence?
- If your MSP proposed an increase to their costs, would you view this as a trigger to review the relationship or instead as a fair reflection of the value they deliver to your organisation?
- Can you name at least one major saving, productivity gain or cost avoidance (i.e. downtime or security breach) they have delivered since you began working together?
Innovation delivery
- If you were assessing a major new component of your tech stack, would your MSP be one of the first people you’d contact?
- Can you name at least one project or innovation you couldn’t have achieved without them in the previous 24 months?
- If they disappeared tomorrow, would at least one area of the business be negatively impacted?
Communication and being a strategic partner
- Is the ratio of who initiates communications balanced – or are you always going to them?
- If you asked them to name your business priorities for the financial year, do you think they’d give a good summary?
- Last but not least, do you view your MSP as just another vendor or as a trusted partner that can help provide advice and strategic direction? Someone that you can go to for advice?
Driving value in 2025
If there were a few too many negative responses to the questions above, you’re in the right place. At Just After Midnight, we pride ourselves on placing value delivery at the top of our priorities, so if you want to explore ways we can help you, just get in touch.
