From coffee and diapers to semiconductor chips, the supply chain crisis continues to linger.
While supply chains recovered to a degree after the pandemic, they still have not completely rebounded to pre-Covid-19 levels – and might never. Managed services providers are battling continued delays for IT hardware –delays that provide hurdles but not necessarily roadblocks.
“It is not business as usual,” says Michael Glasser, equity partner of Frontline Managed Services.
A survey conducted by GetApp, a Gartner-owned enterprise software-recommendation engine, found that information technology departments across industries continue to face higher direct costs, insufficient inventory and an inability to keep up with growth or repair and maintain equipment, thanks to the supply chain.
The good news is that hardware procurement typically makes up a small percentage of an MSP’s business. However, the need to maximize the performance of other services often relies on strong, secure hardware that can provide a modern computing experience. And often, high-revenue projects and network upgrades rely on the availability of networking hardware. If those parts can’t come in, projects can’t close and revenue can’t be collected.
The issue tends to be on the radar of many MSP operators but has yet to reach a real level of concern. While the results of an official survey of MSPs regarding the supply chain have yet to be released (take 30 seconds to complete the survey and tell us your experience), anecdotal evidence shows ongoing challenges.
Glasser has seen notable delays for server hardware and networking technology, in particular switches. When possible, he’s rented the solution his client needs until one becomes available for sale. Other times, he’s purchased from less common vendors.
“I’ve had to get creative at times,” Glasser says. “Thankfully, my customers largely understand the market environment. It is not that I cannot get equipment, but I often have to find other ways to do it.”
Agility Is Key To Success
Willie Kerns, CEO of SmartPath Technologies, finds himself in a similar boat. His company services more than 55 businesses in southwestern Kentucky and has regularly battled with delivery dates and the need to offer customers creative solutions.
While most customers eventually get what they want, the delays can cause short-term problems. For example, he had a customer using Microsoft Windows 8.1 as the company-wide operating system. The system reached end-of-life support in January, potentially exposing them to security vulnerabilities. The customer would also be out of compliance.
“We traditionally have a group of distributors we work with – the same ones a lot of other MSPs work with as well,” Kerns says. “If they do not have something, we’ll have to make some far-reaching grabs – even if it is just a temporary fix.”
He’s also seen clients accelerate cloud adoption instead of waiting for on-site hardware.
Several MSPs have turned toward Datto Networking, which sells only to MSPs, cutting down on the competition and avoiding MSPs getting “skipped” in line by corporations with bigger spend. Datto offers products explicitly priced for MSPs through its channel system. That allows for lower prices along with solutions that do not rely on the traditional supply chain.
Keeping Security In Mind
Regardless of where they purchase, both Kerns and Glasser say security remains their top priority. Some vendors need to meet supply chain security requirements or come from vendors who cannot guarantee the chain of custody of their technology components. The key is to find something available that will work in the short term while potentially waiting for the long term.
The primary challenge comes in replacing parts. For example, Glasser wants networking equipment from the same provider. Using other providers and off-brand companies can present challenges later for technicians looking to expand the network or repair broken parts.
The products themselves must also meet industry-specific security requirements, especially for businesses that work with large amounts of sensitive data. As with the other aspects of the supply chain crisis, managing the security component adds another area of complexity for a company like Glasser’s.
“There’s no correct answer,” Glasser says. “It is about finding the best options and working with your client to decide. Some customers can wait for what they want as long as they know the right thing will come. Others are not that patient.”
Operating In A Post-Covid World
There has long been hope that supply chains would bounce back to pre-pandemic levels at a certain point. Those days may be a thing of the past. China’s “Zero Covid” policy, which has since been lightened, put the supply chain on edge as manufacturing facilities would get shut down seemingly overnight because of an outbreak.
Kerns admits to watching the news to keep abreast of what happens overseas. While he has seen his delivery times come down a bit, he knows that a technology delivery that once took two weeks now takes two months and may never come back.
“It has made things logistically more difficult,” he says. “It’s stressful.”
But, as always, the successful and committed MSPs will continue to adapt to the environment and find creative ways to keep delivering to clients AND make money while doing it.
Have you been impacted (or not impacted at all) by supply chain issues? Take 30 seconds to fill out the survey and let us know what you’ve experienced! https://mspsuccessmagazine.com/survey