The Hype Cycle for Managed Service Providers

"Hype is the enemy of profitable, repeatable managed services."

I first made this point on stage at partner summits a few years back. It drew a few nods and a few raised eyebrows, but the line landed. It's a point worth coming back to, because the pattern it describes doesn't really change — only the name of the latest shiny thing does. To be clear, I’m not anti-hype. Hype creates awareness, excitement and funding, and without it nobody’s buying and nobody’s building. The trouble starts when the hype becomes the plan.

Here’s Gartner’s Hype Cycle, viewed through MSP eyes. Gartner’s version ends on the Plateau of Productivity, where mainstream adoption takes off. For an MSP that isn’t the end of the story, so I’ve added the stage Gartner doesn’t draw.

The Managed Service Danger Zone

This is where far too many MSPs spend far too much time, for far too little return.

It starts with A New Dawn. The latest, greatest thing arrives in the industry's consciousness, and even though we keep hearing more about it, most of us don't really know what it is yet. Often enough, it's a reincarnation of things we already have and know, dressed up in a new acronym.

From there, we climb to the Summit of Buzzword Mountain, where meetings are stuffed with buzzwords and very little substance to back them up. Whoever shouts the loudest on the stand at the show seems to win the day. Customers walk in asking for the buzzword, and only the MSPs who get it right peel it back to the actual requirement — which is usually much simpler than the buzzword made it sound.

Soon after, we slide down into Trough of Acronym Anarchy. Every news article, meeting and pitch deck is full of acronyms, with very little behind them. The confident few stop saying the buzzword in full and just fire the acronym across the table. Most of us are left with more confusion than clarity.

Only a small part of the industry is talking sense at this point.

The Managed Service Profit Zone

The leading few cut through the noise and make enough sense of the underlying technology to wrap it into a service a customer actually wants to buy.

Welcome to the Ascent of Profitable Standardisation, …where bespoke offerings turn into repeatable ones, and the priority becomes a proposition you can deliver to most of your customer base. My rule of thumb is 80% standard, 20% bespoke. Multi-year contracts, happy customers, happy investors — provided the basics are done well.

The Managed Service Comfort Zone

This is the stage Gartner doesn’t draw. Stay in the Profit Zone too long and the Descent of Commoditised Erosion sets in. Renewals flatten, margin gets eroded, and standing still ends up being the same as falling behind. Even happy customers can drift off toward whoever is selling the next set of new possibilities.

To be fair, somebody has to go first. Vendors need early movers to prove a market exists, and the MSPs who climb Buzzword Mountain early sometimes win the logos and the margin. The difference is whether they come down the other side with a service, or just a story.It's a tough balance to manage, and the trick is not going too early and not staying too long.

The point of this blog is simple… help MSP partners resist the temptation of jumping in feet first into the Danger Zone, be as effective as possible in the Profit Zone, and keep challenging them to progress so they never quietly settle into the Comfort Zone.

Where would you put your newest service on the curve right now?

Service before Technology. Always.