Comments on: Weak Economy Begins to Impact Managed Service Providers http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/ Managed Services & Cloud Services Blog for VARs & MSPs Tue, 14 Feb 2012 23:41:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Mike Ellison http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/comment-page-1/#comment-8067 Mike Ellison Thu, 01 May 2008 12:59:03 +0000 http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/#comment-8067 It's true that MSPs should be mindful of environmental factors that can impact their business and their clients, such as an economic slowdown. However, customers closely examining their own businesses for areas where they can save money or gain efficiency spells opportunity for a good MSP. As an MSP, it's vital to look beyond the obvious IT budget the client has, and help them find ways to avoid lost productivity, security risk, and workflow inefficencies. If you help them save money in other areas by adopting a sound IT support strategy, then you're less likely to be painted into a corner trying to negotiate support based on your hourly rate. Your contract sizes will actually go up. It’s true that MSPs should be mindful of environmental factors that can impact their business and their clients, such as an economic slowdown. However, customers closely examining their own businesses for areas where they can save money or gain efficiency spells opportunity for a good MSP. As an MSP, it’s vital to look beyond the obvious IT budget the client has, and help them find ways to avoid lost productivity, security risk, and workflow inefficencies. If you help them save money in other areas by adopting a sound IT support strategy, then you’re less likely to be painted into a corner trying to negotiate support based on your hourly rate. Your contract sizes will actually go up.

]]> By: Richard http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/comment-page-1/#comment-8030 Richard Thu, 01 May 2008 04:05:55 +0000 http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/#comment-8030 I agree with Joe. We are not in a bubble like 2001, where everything went pop. The Nasdaq isn't at 5,000. IPOs aren't skyrocketing every week. I agree though that managed services will feel a bit of a pinch as the year goes on. Small business owners are notorious for failing to pay bills, moving to new zip codes, and starting over. If these nomads avoid their bills, MSPs could be left holding the bag on some SLAs and managed service contracts. I agree with Joe. We are not in a bubble like 2001, where everything went pop. The Nasdaq isn’t at 5,000. IPOs aren’t skyrocketing every week. I agree though that managed services will feel a bit of a pinch as the year goes on.

Small business owners are notorious for failing to pay bills, moving to new zip codes, and starting over. If these nomads avoid their bills, MSPs could be left holding the bag on some SLAs and managed service contracts.

]]> By: Joe Panettieri http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/comment-page-1/#comment-7988 Joe Panettieri Wed, 30 Apr 2008 21:21:33 +0000 http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/#comment-7988 Stu: Thanks for your views. Very timely. I do believe we're in for some sort of spending slowdown, and MSPs will be impacted. However, there is a silver lining. In 2001 when the dot-com bubble burst and spending went off a cliff, many IT customers were money-losing businesses. Even Cisco was guilty of selling to customers with bad business models and no real path to profits. This time around, most businesses seem to be focused on the right metrics (true net income rather than EBITDA; sustainable growth rather than Internet eyeballs). So hopefully, MSPs are selling to real customers with viable business strategies during these challenging times. A few outsourcers and service providers will surely get burned by customers that go bust (example: Bear Stearns). But overall, I'm still cautiously optimistic. And I keep hearing solid financial anecdotes from MSP platform providers, which is somewhat reassuring. Stu: Thanks for your views. Very timely.

I do believe we’re in for some sort of spending slowdown, and MSPs will be impacted. However, there is a silver lining.

In 2001 when the dot-com bubble burst and spending went off a cliff, many IT customers were money-losing businesses. Even Cisco was guilty of selling to customers with bad business models and no real path to profits.

This time around, most businesses seem to be focused on the right metrics (true net income rather than EBITDA; sustainable growth rather than Internet eyeballs). So hopefully, MSPs are selling to real customers with viable business strategies during these challenging times.

A few outsourcers and service providers will surely get burned by customers that go bust (example: Bear Stearns).

But overall, I’m still cautiously optimistic. And I keep hearing solid financial anecdotes from MSP platform providers, which is somewhat reassuring.

]]> By: StuFinancesTech http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/comment-page-1/#comment-7986 StuFinancesTech Wed, 30 Apr 2008 20:43:34 +0000 http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/#comment-7986 My financing business, not just of tech purchases, has seen the sales cycle get longer too. I have no doubt its companies saying 'let me see if i can stretch another month (or qtr or....) with what I have' and that its based on the economic environment and cash being tight everywhere. Every one of my clients has less cash on hand now than they did a year ago. So while mismanagement is always a factor especially if the market has been easy money, the environment is the bigger factor that I see. Although I must confess, my tech vendors have seen the most activity, as opposed to other industries I finance but the cycles are longer for them too, not just for me. My financing business, not just of tech purchases, has seen the sales cycle get longer too. I have no doubt its companies saying ‘let me see if i can stretch another month (or qtr or….) with what I have’ and that its based on the economic environment and cash being tight everywhere. Every one of my clients has less cash on hand now than they did a year ago. So while mismanagement is always a factor especially if the market has been easy money, the environment is the bigger factor that I see.

Although I must confess, my tech vendors have seen the most activity, as opposed to other industries I finance but the cycles are longer for them too, not just for me.

]]> By: MSP Madman http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/comment-page-1/#comment-7971 MSP Madman Wed, 30 Apr 2008 18:29:01 +0000 http://www.mspmentor.net/2008/04/30/weak-economy-begins-to-impact-managed-service-providers/#comment-7971 Some of these challenges are certainly tied to the economy. But other challenges are more associated with MSPs not understanding how to build and run their businesses. After you take some of the easy dollars out of the market, you really need to refine your sales messaging and business processes to accelerate sales cycles with clients who are more difficult to sell on managed services. Some of these challenges are certainly tied to the economy. But other challenges are more associated with MSPs not understanding how to build and run their businesses.

After you take some of the easy dollars out of the market, you really need to refine your sales messaging and business processes to accelerate sales cycles with clients who are more difficult to sell on managed services.

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