What is arguably the most trending topic in IT channel today??

dj blog pic.jpgWould you like to have better client relationships?

Do you think recurring revenue is beneficial for your business?

Are you wanting to keep up with the change of how IT is delivered today?

Is your goal to increase the overall value of your IT business?

If you have answered yes to any of the above (which I am sure most of you have) then read on!!

When my resellers come to me and ask the question “So tell me what is the hottest topic out there?”, I say MSP The response I would usually get is “What now??” another acronym, like the IT industry doesn’t already have enough of these. I then go on to explain what an MSP is and how it is different from a VAR (another acronym). 😊

Let me start by explaining what is a “VAR” (Value Added Reseller): It is someone who adds features or services to an existing product, then resells it (usually to end-users) as an integrated product or complete “turn-key” solution. They may further add value by providing professional services such as integrating, customizing, consulting, training and implementation. They may further add value by developing a specific application for the product designed for the customer’s needs which is then resold as a new package.

Whereas an “MSP” (Managed Service Provider) is an Information technology services provider that manages and assumes responsibility for providing a defined set of services to its clients. As an example, these services may include providing services such as server monitoring and maintenance, for a number of different clients. Most MSPs bill an upfront setup or transition fee and an ongoing flat or near-fixed monthly fee, which benefits clients by providing them with predictable IT support costs. An MSP’s usual target market is small to medium-sized businesses without a dedicated IT staff.

Now comes the most important question, why should you become an MSP?

Many MSPs are in this profession by choice, but as technology and the channel evolve, non-MSPs have no choice but to consider moving into managed services. Essentially, VAR’s do not have to shift their entire business model to managed services (not in the beginning at least). The trick is to blend the best of the current value-added reselling with what fits your business and goals as far as managed services. The beauty is if you migrate from a VAR to an MSP, you’ll make more money from managing what you or others helped install. This could include hundreds of endpoints, dozens of servers, the internal network and the WAN, and even a SAN. Since you are deeply trusted, you’ll be the one to move this infrastructure forward.

Recurring revenue: When most of the costs to run the business are recurring, why not the revenue? Most of you will have recurring costs to run a business such as rent, bills, salaries, software licenses etc.. With MSP, no more techs sitting on the bench, no more slow months where your customers just didn’t seem to have any problems, or at least not enough to keep your cash flowing. When you become an MSP, your clients pay you a monthly recurring fee to remotely monitor their devices. Instead of relying on your clients’ systems to break, you’re guaranteed monthly revenue for each of your clients; then it’s on you as the MSP to deliver on your services.

The MSP way safeguards your business and gives you confidence that money will keep rolling in. Once you are offering clients services, and they are satisfied and trust you, they will be interested in new services. By providing managed services and remote device management, you can handle more devices from one single location. This means you can onboard more clients, without needing to onboard more staff – a practical and foolproof way to add more profit to your business.

Also, this way you will prevent IT issues proactively. With RMM (Remote Monitoring and Management 😊) software, you can proactively detect when networks are close to overload, or when a server might be at risk of crashing. This allows you to make adjustments, add infrastructure, lockdown devices etc. before there is any business impact to your end clients. You are now promoting business continuity, building a stronger business relationship with your clients and gaining their trust. Trust creates the willingness for customers to consider spending more with you when the need arises.

I reckon this article may have created enough interest for you to start googling the word MSP? If you have further questions on the topic, feel free to reach out to me so I can explain how we can help you transition into an MSP !!

Devinder Lamba (DJ..)

DJ@sofsol.co.nz, +64 21 731997

Northern Channel Manager

Soft Solutions Ltd