For managed service providers (MSPs), it’s more difficult than ever to differentiate services and build a viable business. Declining prices, increasing commoditization, and intensifying competition are all contributing to this new reality. For some MSPs, building a sustainable business in the face of these trends means taking on any new client whether or not they understand their business or have the skill set to deliver the services they need. This horizontal approach can quickly backfire. Without a deep understanding of a client’s business environment, it can be difficult to add unique value, which leads to service commoditization.
One remedy is to specialize in vertical markets. This approach helps you distinguish your business by becoming subject-matter experts. You get insight into the common needs and applications of customers in that industry, making it faster and more efficient to identify and solve problems. It also enables you to offer a more relevant mix of products and services that provide a complete solution, and create greater customer value. This leads to a more focused and relevant offering, stronger customer relationships, and ultimately to increased revenue and a more successful managed services business. read the rest here