Running a managed services practice is all about generating recurring revenue. Too many small IT providers get so hung up on the service part of Managed Services that they forget about the other ways to make recurring revenue. Here is my top ten list of ways to generate recurring revenue.
They include…
1. Watch Their Networks: Even if you are not a full-fledged MSP, why not offer some basic monitoring services for your clients? Just bill them for being a little proactive. It is an easy way to get them started in Managed Services.
2. Manage Their Internet Usage: Firewalls can be managed and monitored. Wouldn’t your customers want to know who is doing what on the network and when they are doing it? Many firewalls have remote management tools to fulfill this need. Manage your customers’ firewalls, provide them detailed reports on network usage and make some monthly income while doing so.
3. Clean Their E-mail: Everyone gets spam. Everyone hates spam. There are many ways to filter it. Why not solve your customers’ spam issues with a service that generates recurring revenue? Filter it in the cloud and save your customer the hassle and expense of purchasing a email filtering device and generate recurring revenue while doing so.
4. Protect Their Data: Backups are a no brainer for your clients. You have two choices: 1. Local backups to protect against hardware failure, data deletion, and corruption. 2. Offsite backups to protect from disasters (fire, theft, and water). Both options generate recurring revenue while protecting their data.
5. Virus Defense: Just like spam, every business has to deal with the constant threat from viruses and malware. Your clients need protection and you should be selling it to them as a monthly subscription service.
6. Offer a Variety of Web Services: Most businesses have websites and there are needs associated with maintaining them such as domain name registration, email, and hosting. What about SSL certs for your Exchange servers? These are opportunities to make recurring revenue that most service providers pass up.
7. Get Them Hooked Up: Are you cashing in on phone and internet service? ISP’s, phone providers, and brokers offer recurring commissions for referring business their way.
8. Use SaaS Options Like Hosted Exchange: Smaller clients might not need an in-house Exchange server. Why not offer hosted Exchange as an alternative? This is a great way to generate recurring revenue. There are many other hosted applications you can also resell to your clients and generate recurring revenue with (CRM tools, Google Apps, etc.).
9. File Sharing: File sharing and collaboration is a big conundrum for small businesses. Most end up using clunky FTP services as a solution, and we all know that this is less than ideal. There is another option. Offer an online file sharing and collaboration service as a monthly subscription.
10. Keep it Current: While not a monthly recurring revenue generator, licenses for firewalls, software, services, and warranties come up for renewal. Why let an opportunity to make money slip by? Most vendors pay good commissions for renewals and you should cash in.
There are many other ways to generate recurring revenue. Keep your eyes open for them and add them to your menu.
Paul Barnett is marketing director for VirtualAdministrator, which offers hosted solutions for managed service providers. Read all of Paul’s guest blogs here. Guest blog entries such as this one are contributed on a monthly basis as part of MSPmentor.net’s 2009 Platinum sponsorship.
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Posted In: Guest Bloggers | Managed Security Services | Managed Storage Services | On Premise | Sales | Software as a Service and Hardware as a Service
Tags: anti-spam | Anti-Virus | Email hosting | Hosted Exchange | Managed Firewalls | Managed Services | Offsite backup | online backup | Paul Barnett | Recurring Revenue | SaaS | Security as a Service | Virtual Administrator
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NaviSite works with many MSPs to assist them in growing their recurring revenue with Hosted Exchange, Hosted SharePoint, Dedicated Servers and more. These services help MSPs deepen their relationship with SMBs, while growing revenue and profit for the MSP.
Providing added services such as these can be fast and turnkey using a Master MSP like ServiceKey with hosted, branded monitoring, backup and warranty service for the channel.
In regards to number 10, what is the best way to keep this information current and receive calendar updates or similar for when these tasks are due? We are using ConnectWise for this right now, but it really doesn’t have the proper delivery system for this at the moment.
Great posting Paul! The opportunities to generate recurring revenue can sometimes be overwhelming. Prioritizing your list of offerings and creating a revenue model to understand how the recurring revenue will impact your business is an important step. You don’t want to pick an option that will not result in a healthy return and growth rate.
What are some MSP friendly options that people are using for number 9 these days?
Thanks,
Dave
http://facebook.managed-data.com
Hi Folks,
Greetings from Paris (Cisco Partner Velocity conference). I suspect Paul will jump into the comment area but here’s a quick thought for Dave@5: Give Box.net a look. They are working more and more with MSPs and have some interesting file sharing approaches.
Readers: Other options you’d like to recommend to Dave?
-jp
I am a big big fan of Huddle as a collaboration/file sharing service. I often have to share files with associates but only certain ones at certain times with certain people and this program is great. It also is synched into LinkedIn already and they just got put onto 25 million HP business PCs. Here’s my tweet about it (I’m @StuFinancesTech):
Huddle’s Collaboration App To Go On 25 Million HP Business PCs – Wash Post http://tinyurl.com/yech4kg (Great app)
Ralph,
In response to your question concerning number ten, we use ConnectWise to manage our warranties/renewals. In ConnectWise, you can set up a configuration for each item you sell a customer with warranty/license expiration dates. We configure it to start emailing our sales team thirty days prior to the expiration. The systems notifies our sales team that a renewal needs to be made.
I am sure the other PSA’s out there have similar features.
Cheers,
Paul Barnett
Director of Marketing
Virtual Administrator
Joe, what is the phrasing you normally use when vendors post “soft ads” in comment sections?
I’ll be clear, I’m with VirtualAdministrator.com, as is Paul Barnett. We have our own answers to these 10 recurring revenue methods and are happy to discuss them at length.
We just didn’t want to do so in the public, educational forum. We respect the intenion behind MSP Mentor’s guest blogging opportunities, and will continue to endeavor to provide educational and provocative content.
Rich Forsen
http://wwww.virtualadministrator.com
Dave,
We are big fans of Box.net. We use this service with our own end users at network depot. We also have a special deal worked out with them for our reseller clients at Virtual Administrator.
I don’t want to appear to be shucking our wares here, but Box.net has a great service. You should at least check them out. I think you will agree.
Cheers,
Paul Barnett
Director of Marketing
Virtual Administrator
Rich, Paul: Sorry for my belated reply. I’m over in Europe and spending most of my waking hours focused on a Cisco conference. I think as long as readers disclose their affiliation and don’t pitch their products to death it’s A-OK to recommend specific products and services.
Thanks so much for the great blog contribution. Obviously, you’ve caught readers’ attention.
-jp
Thanks for the feedback. I’ve been testing Dropbox (http://getdropbox.com) here for my own selfish in-house needs. It is cloud-based storage with a syncing feature, web access, and even an iPhone ap to access your files. You can also make files public and send public links to access them. I will also check out box.net, thanks for the suggestion!
In the past few weeks, I’ve been wondering if you could even replace the need for a file server or on-site storage and backups for small/simple businesses by using one of these cloud-based storage services.
Thanks again!
-Dave
Dave,
A lot of local services will make the move to the cloud in the coming years. Right now, I could easily see businesses opting for a cloud based file sharing service for the bulk of the collaboration needs. I am not quite sure it is to the point yet where an entire file server could be ditched for the cloud, but it isn’t far away.
Cheers,
Paul Barnett
Director of Marketing
Virtual Administrator
The list above provides a great way to generate recurring revenue for essential IT utility services. Everyone can and will offer these. What will be the differenetiator between service providers here? It’s safe to say that there will be a race to the bottom on prices because the market will be flooded with providers of the services listed.
What about taking it a step further into your client’s business and provide services that can deliver enormous value. i.e., we have clients that use a specific EHR (Electronic Health Record); we have designed a recurring revenue strategy around providing expert support with this set of applications. We handle everything from application upgrades, module updates, phone support, and training. This focus has enabled us to grow quickly.
Jeff Auerbach
EMR Group, Inc.
Running a successful MSP is not just about providing computer or technology services, it is about providing SOLID business consulting services. One of the things that I make sure that the partners that I coach have, is a full toolbag of services that bring them recurring revenue. You need to basic toosl first.
Jeff has set his company apart in the market by being an EXPERT with EHR. Too often we see the MSP be too “cookie cutter”. If you want to generate more recurring revenue, then you need to show your value to the prospects. If you don’t, you are just like everyone else.
Coach Stu
Stuart: Let me know if/when your coaching travels take you to NY. All the best.
-jp
Joe,
You know I will. At this time, my next trip to NY is to speak at SMB Nation East in April.
Stu