What’s the fastest way to become a managed service provider? Are there certain steps you can take to accelerate your success? I weighed those questions while meeting with Virtual Administrator, a Master managed service provider, at Microsoft’s Worldwide Partner Conference 2009 (WPC09) in New Orleans this week. Here’s a recap.
Generally speaking, Master MSPs host applications and design SaaS (software as a service) offerings for peer VARs and MSPs. Competitors in the Master MSP industry include Do IT Smarter, Ingram Micro Seismic, MSP Services Network, and Virtual Administrator. In theory, Master MSPs can help VARs speed the transition to managed services because the VAR can leverage existing NOC (network operation center), remote management, monitoring, security, storage and other tools from the Master MSP.
The Strategy
Business models can vary dramatically from one Master MSP to the next. In the case of Virtual Administrator, the company wants to help VARs quickly walk on their own in the managed services market. In other words, the company is “an on-ramp” of sorts to managed services, as Virtual Administrator’s Chris Amori states in this video:
Key Points
As I spoke with Amori, I realized Virtual Administrator has some unique qualities in the Master MSP space. Two prime examples:
- I believe Virtual Administrator is one of only two U.S. companies that are licensed to host Kaseya for VARs and peer MSPs. (I’m still trying to interview the other one.)
- Unlike a Salesforce.com or other traditional SaaS providers, Virtual Administrator doesn’t want to hold onto you and your business (in the cloud) for life. If an MSP eventually wants to fly solo and move away from Virtual Administrator’s services, then Virtual Administrator is more than happy to assist the process. In fact, Amori says, Virtual Administrator encourages its strongest customers to make that transition when they’re ready.
Look Before You Leap
Please note: VARs and MSPs should do careful research before selecting a Master MSP as a potential partner. I’ve seen far too many Master MSPs come-and-go in the past two years. Plus, there are a lot of “pretender” companies that claim to be Master MSPs in a weak attempt to cash in on buzzwords.
Also, make sure the Master MSP is really licensed to host the software and services they offer. I’m aware of at least one alleged case where a Master MSP was offering hosted Kaseya software to peer VARs without the proper licenses in place. In the case of Virtual Administrator, I can confirm that they have a longstanding relationship with Kaseya.
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Posted In: Managed Security Services | Managed Storage Services | Master MSPs | Platforms | RMM | Software as a Service and Hardware as a Service
Tags: Do IT Smarter | DoITsmarter | Hosted Kaseya | Ingram Micro Seismic | Intronis Online Backup and Recovery | Master Managed Service Provider | Master MSP | Microsoft Worldwide Partner Conference 2009 | MSP Services Network | MSPSN | SonicWall | Spam Soapm | Virtual Administrator | Virtual Administrator Chris Amori | WPC09
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The concept of MasterMSP is interesting Joe. I have a question. Taking the example of Virtual Administrator, isn’t this the same as SI’s assisting VAR’s on a project engagement basis (or a BOT model) to ramp up to offerring managed services? If not can you elaborate on the differences?
Srivatasan: Thanks for the note. I guess there are some similarities. But in your scenario provide hosted services and SaaS applications to the peer VAR?
I agree with the statement that a Master MSP is an “on-ramp” to managed services. This is certainly a major value that we provide to a VAR that is looking to get into the managed services business. A Master MSP does this by providing their partners with the tools, resources (people sitting in a NOC) and education (often done in classroom and one-on-one mentoring programs). I know that all of the above mentioned companies provide these services.
Much like Virtual Administrator we do have a roadmap for our partners to move away from our services and build them in house. That being said I can tell you that after 4 years as a Master MSP we have never seen a partner that embraced our methodology do this.
The reason for this I believe is that our true value is we allow our partners to focus on their business (what they do best) which is generally professional services. The model works like this, the Master MSP provides all of the backend services, NOC, Help desk, the tools, and more importantly all of the process around this. The partner (MSP) provides the strategic account management (trusted advisor role), onsite support, project work and project management.
This works very well for the customer as both companies are focused on what they do best so the customer gets the best of both worlds. Also by the Master MSP handling the basic more mundane tasks the partner is able to hire more senior level employees which allows them to provide higher end professional services and often times specialize in a niche offering (SANs, Virtualization, DR, etc.).
With this model the MSP gets the best of both worlds as well. They can provide managed services and enjoy the recurring revenue stream and strong relationship it creates with their customers but they do not have to try and run two business models (professional services and managed services).
If you look at the makeup of a help desk and NOC it generally consists of 2-3 levels of technicians, starting with desktop level on up through senior level engineers. You then need to have lead technicians, shift supervisors and managers, all of which are focused on providing remote support from a central location. This is NOT the same team that can provide high end professional services.
So if an MSP does build up a large customer base leveraging managed services with the backend provided by a Master MSP, my question to them would be why would you want to bring this all in house? In my opinion they need to ask themselves these two questions. 1. Is this really what I do best? 2. Does it make economic since? I think that more often than not the answer to both questions is no.
I have just talked about the staffing components here not to mention the infrastructure required to build, maintain and support your own RMM tools. Again probably not something the partner does best, nor needs to have high end engineers spending non-billable time on.
I think that ultimately if you decide to partner with a Master MSP you are in it for the long run with them. Knowing the excellent service that Virtual Administrator provides to their partners I honestly don’t see any reason at all why an MSP would ever leave and decide to build it in their own.
Lane Smith
Do IT Smarter
Lane: Thanks for filling in some blanks and adding new perspectives.