#61 – From the Trenches: Transformation, Strategy & the Blue Ocean Ahead (James Davis)

In this episode of From the Trenches on the BMK Vision Podcast, Josh Peterson sits down with James Davis for a strategic conversation that cuts through one of the MSP industry’s most persistent illusions: that “more tactics” will eventually produce a better business. James has lived the evolution—from early MSP sales in the time-and-materials era to leadership, consulting, and now fractional strategy work across the APAC region—and he brings a rare ability to name what’s really happening beneath the surface when MSP owners feel stuck. The throughline aligns with what we build inside Vision: a deliberate operating system that turns intention into execution instead of letting the business default to “whatever is loudest today.”

This is not a discussion about swapping tools or chasing the next vendor promise. It is a leadership diagnosis. Why do so many MSPs stall at $1–2M? Why do owners say they want growth, then behave like they don’t? Why does “strategy” feel abstract until it becomes urgent? James frames strategy as a sequence: vision → identity → strategy → execution. And he argues that most MSPs aren’t failing because they lack knowledge—they’re failing because they resist deliberate choice. Many are trying to live with one foot in “lifestyle” and one foot in “growth,” which creates the worst possible outcome: constant effort, unclear priorities, and chronic underperformance. The fix is not more activity—it’s a disciplined bridge from strategy to action, where the plan is specific enough to force tradeoffs and measurable enough to create accountability.

The heart of the episode is a forcing function every MSP owner eventually faces: transform or exit. James explains why commoditization pressure, rising costs, and shifting client expectations make “waiting it out” the most dangerous strategy on the table. But he also offers a hopeful counterpoint: there has never been more upside for MSPs willing to move up the value chain into advisory, automation, and industry-aware leadership. The blue ocean is real—but it is not a bolt-on. It is an operating model transformation that starts with the owner’s mindset and ends with a business that no longer depends on heroics to survive—and it’s reinforced by an intentional client lifecycle and leadership cadence, including a clear client engagement strategy from onboarding to QBRs.

What does “strategy” actually mean for an MSP owner?

Most MSPs treat strategy like a motivational poster—something you “should” have, but not something you can operationalize. James reframes it as a practical chain of decisions that creates clarity and removes friction.

Strategy begins with a founder-level question: what do you want the business to produce for you? Not in vague terms (“more growth”), but in identity terms: the size, the culture, the client profile, the leadership model, and the future you’re building toward. From there, strategy becomes the details of how you’ll get there—and execution becomes the daily system that reinforces those choices instead of constantly undermining them.

• Vision defines the destination
• Identity defines what kind of company you are (and are not)
• Strategy defines the choices that make the destination achievable
• Execution makes the strategy real through habits, systems, and accountability

The MSP problem this episode solves

Many MSP owners aren’t stuck because they lack tools, knowledge, or effort. They’re stuck because they’re trying to get two different businesses out of one operating model.

James describes a common pattern: owners default to the “right” growth answer (double revenue in 2–3 years), but they cannot explain why they want it—or what they will do differently to achieve it. That disconnect creates a dangerous loop: ambition without a plan, investment without adoption, and busyness without leverage.

• MSPs stall because owners resist deliberate choice
• Most goal-setting is aspiration, not engineering
• Half-implemented systems create fatigue and false confidence
• Profit is treated as optional—until it becomes existential

Red-ocean vs. blue-ocean MSP strategy

The red ocean is familiar: fixed-price support, reactive workflows, price pressure, and incremental add-ons that don’t change the underlying model. The blue ocean is not “new tools.” It is a shift in what you sell, how you lead, and what your clients rely on you for.

James makes a blunt point: automation, AI, and security are not bolt-ons to a reactive help desk. They require a different mindset (DevOps and systems thinking), a different implementation muscle (real change management), and a different economic model (you must actually realize the gains through leverage, growth, velocity, or new revenue streams). Without transformation, “modernization” becomes an expense line—not a moat.

• Red ocean competes on effort, responsiveness, and price
• Blue ocean competes on advisory leadership and outcomes
• Modern offerings require operating model change, not procurement
• The owner must choose: transform or exit

What a healthy relationship with profit looks like

James highlights a hidden constraint in the MSP market: many owners don’t hate profit—they fear what profit represents. Talking about money feels uncomfortable, pricing feels confrontational, and discounting becomes the default because it avoids a hard conversation.

But a low-profit MSP is not morally superior—it is strategically constrained. If you run thin margins, you can’t fund transformation, you can’t create capacity, and you can’t build the kind of leadership bench required to move into advisory. Profit is not the enemy of stewardship; it is what makes stewardship sustainable.

• Discounting is often a symptom of discomfort, not competition
• Low profit blocks investment in people, process, and transformation
• Stewardship requires pricing that supports long-term delivery
• Profit turns “good intentions” into a durable operating model

A practical “transform or exit” readiness checklist

If this episode hit close to home, use this checklist to pressure-test where you actually are—not where you hope you are.

• Business identity: Can you clearly state what kind of MSP you are building—and what you are refusing to be?
• Execution discipline: Do you consistently implement operational change (or do you half-implement and move on)?
• Profit posture: Can your margins fund transformation without starving the business?
• Leadership capacity: Are you building leaders—or building a company that requires you in every decision?
• Advisory muscle: Are you spending time inside client context (industry, workflow, value streams), or only responding to tickets?
• Leverage plan: If automation frees capacity, do you know which lever you’ll pull to realize the gain (scale, velocity, growth, new offers, or cost reduction)?

Episode highlights

• 00:05:48 – What “strategy” really means for MSP owners—and why most resist it
• 00:10:05 – Why MSPs get stuck at $1–2M: one foot in lifestyle, one foot in growth
• 00:21:48 – The dangerous relationship many MSP owners have with money and profit
• 00:36:50 – Commoditization pressure and why traditional support keeps shrinking in value
• 00:48:47 – Why automation and AI fail without full operational transformation
• 00:55:40 – The upside: advisory-led MSPs and the widening blue ocean
• 01:02:14 – The forcing function: transform or exit—pick one and be deliberate

About the guest: James Davis

James Davis is a strategy advisor and fractional Chief Strategy Officer working with technology and MSP businesses across the APAC region. He helps owners clarify business identity, design future-ready operating models, and execute transformation programs that improve maturity and profitability—without relying on wishful thinking or vendor-led narratives.

🔗 Connect with James on LinkedIn →

Frequently asked questions

Why do MSPs stall at $1–2M in revenue?
Because they can survive on tactics without being deliberate. Growth beyond that ceiling typically requires identity clarity, leadership capacity, and execution discipline—not just “more sales.”

Is a lifestyle MSP strategy still viable?
It can be—if you’re deliberate. But the risk is rising: commoditization, client consolidation, and cost inflation punish MSPs that remain purely reactive and support-led.

Why do automation and AI initiatives fail inside MSPs?
Because they’re treated as bolt-ons to a reactive model. Successful automation requires implementation discipline, adoption management, and a plan to realize the financial leverage created by freed capacity.

What does “transform or exit” mean in practical terms?
It means committing to one path. Either you modernize your business model into advisory-led value (which takes energy and time), or you exit while your model still commands a strong valuation.

Related resources from Bering McKinley

• Implementing a business performance improvement plan: from strategy to action
• The integration blueprint: building a tiered strategy for ConnectWise and 3rd-party tools

Want to continue the conversation?

If you’re an MSP owner who feels the pressure of commoditization and knows you can’t “ticket your way” into the next decade, the goal is simple: get deliberate. Choose your path, build the operating system that supports it, and execute long enough to make it real.

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