MSPmentor’s 2010 Platinum Sponsors contribute timely insights through our guest blogging system. Our guest bloggers avoid the temptation to give you sales pitches, and instead share key observations to help you evolve, build and grow your managed services practices.
Normally, I like to keep my blogs to advice and tips on how to market and sell managed services. This month, I am going in a different direction. I want to ask you a question that I am unsettled on. I want to hear your opinion and get your thoughts on this. After making the switch to a managed services business model, what do you do with customers who refuse to give up your break-fix services?
As smartphone usage has exploded—up 55% last year in the United States (comScore)—the popularity of push messaging has increased on a parallel track. Messaging gives workers more collaborative power with immediate access to what’s new in their e-mail, contacts, calendar, and social media. Push messaging makes utilizing applications on mobile devices more convenient and consistent—factors that are sure to drive the market even further. But where do MSPs fit into this market trend?
Before I start, the answer is NO. You can’t afford to ignore that elephant in the room. You’re risking everything that you have established up until now. A fundamental shift is taking place and it can’t be ignored. It’s not a matter as to IF it’s happening, only when it will fully take hold. Tim Shea, CEO of Alpha Netsolutions Inc. recently wrote: “Pretty soon, clients won’t care where a server sits or what brand it is. They will just care that they have the computer services they need—and how much it will cost to have them.” Here are the implications for MSPs.
In today’s fast-paced world of technology, new IT issues — and new solutions — can arise in the blink of an eye. This poses a unique challenge for MSPs and VARs trying to stay ahead of the game while simultaneously working to contain costs and maximize ROI. After all, if you can’t or don’t evolve with ongoing service advancements you will quickly begin to lose customers to those competitors who continually find ways to reinvent themselves. So, what’s your next move? Here’s some guidance.
Your website is the single most important marketing tool your company has. An effective website will increase your search engine hits, capture leads, and establish you as a leading managed services provider. But the key element to building great websites is one that many technology-based companies overlook—relevant, well written content.
Anybody with a competitive bone in his or her body hates to lose a deal to the “other guy.” But while a loss to a peer MSP can drive anyone to a cold adult beverage, nothing stings like losing to a customer “no decision.” You know the scenario. Here are three ways to solve it.
Most of us have heard by now that cloud computing is set to displace managed services, forcing MSPs to rethink their role as value-added trusted advisors to their clients. Don’t believe these dire predictions of impending MSP doom. It’s hype and in fact, as a true MSP your value proposition doesn’t have to change with cloud computing. If you play your cards well, the cloud will bring you more business, not less. Here’s why.
To follow the ideas I presented in my January blog post, Getting Ready for the Rebound, we’re all looking to do more with less in 2010. That’s easy to say, but executing the concept in your day-to-day-operations can be a challenge. Here are nine questions you need to consider as you strive to make your business more efficient.
A lack of focus on sales is a common error I see a lot of small MSPs make. Heck, most have no dedicated sales staff or sales plan whatsoever. The standard way of doing business is to wait for the phone to ring and hope for new business. This is a mistake. All great businesses are built with a strong sales attack.
Is your web-based management platform easy to use and simple to navigate? Can you identify problems and inefficiencies at glance? Can you quickly find the information you need?
If not, then your software is costing you both time and money. Here’s why.
When I want to learn about a business topic, I always try to get the scoop from people who are battling it out in the trenches. Real-world success trumps the white board gurus any day. So, for this blog post, I’m culling business insights, sales advice and cloud strategies from three MSP All-Stars. Here’s their guidance.
While it may seem counter-intuitive to launch a business during a down economy, for IT professionals the worst of times may in fact prove to be the best of times. If you are an IT professional out of work, your chances of finding full-time employment with a vendor or IT services firm are quite narrow. That’s no reflection on your abilities necessarily, but rather an acknowledgment of the realities of the market. What should you do?
Let’s face it: life on the bleeding edge is not for everyone — companies or individuals. If you are anything like me, some days you ask yourself why you do it. Yet for most of us in the IT services world, the good days in 2009 far outnumbered the bad, and the lessons learned were invaluable. Here are four takeaways I am keeping top of mind in 2010:
There’s no denying 2009 was a challenging year. Nearly everyone was forced to cut costs, streamline operations and undergo the proverbial belt tightening to stay out of the red. It wasn’t easy. Salary levels were frozen. Bonuses canceled. Furloughs mandated. And, in the worst cases, employees laid off and businesses closed. Now, here’s some upside.
Adios 2009! Great to see you! In the rear view mirror, that is. Congrats to all those MSPs that persevered through the melt down — and even grew their business through the dismal macroeconomic climate. I’m on the record for calling 2010 a banner year for MSP revenue growth — but what about profit? EBITDA? Anybody that has ever talked to an investment banker, thought about selling their business, or buying someone else’s business knows that EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a proxy for operating cash flow and one of the key multipliers that goes into an MSP business valuation. Is your business model shaped to achieve record EBITDA as your revenue trajectory zooms?
Service Providers are worried about the future prospects of their current managed service offerings in the face of emerging competition. More and more customer compute dollars could flow toward cloud providers with huge scale advantages like Amazon, Google and Microsoft. I get the concern. But the cloud genie is not going back in the bottle. Here’s how to move forward.
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.
A very cool part of my day-to-day calendar is dialoguing with early stage MSPs. Why is it cool? Because in a prior life I worked at an early stage MSP that moved out of a teething period of losing money and operational pain to achieve long-term, high revenue, highly profitable mature operations. I am often asked about critical success factors – what were the difference makers on our path to success? While we executed many key moves (some right/some wrong), my answer to that question is always another question: What’s in your Service Catalog?
Like it or not, the reality for MSPs is that they’re only an SLA breach or significant outage away from losing a customer. This immense contractual pressure is a significant motivator that drives MSPs to develop sophisticated approaches to continuous service improvement.
As people who live along the Gulf Coast and Eastern Seaboard know, hurricane season is in full swing. For residents there, checking flashlight batteries and having sheets of plywood ready to cover windows are annual rites. But when a major storm system does loom on the horizon, there’s still an inevitable swirl of commotion as people near the sea head for safer habitats. Perhaps forgotten in concern for personal safety are thoughts of company financial records and business data. While skies and minds are clear, it may be a good time to start a conversation with your customers about their business continuity plans.
The managed services market is growing rapidly and has strong, long-term potential for many who are pursuing it. It is changing the way IT services are consumed and delivered. It is helping many of us diversify and strengthen our value propositions and balance sheets. We are all bullish about the future and the opportunity in front of us. There is one significant hurdle, however, that nobody seems to want to acknowledge — the proverbial elephant in the room. Here’s the problem.
First, let me be clear (hopefully before I get tarred and feathered): this isn’t intended as any kind of attack on open source, whether the concept, the technology, or the business model. To do so would be to discount one of the most meaningful trends in IT over the past decade. What I’m discussing is open source within a very specific context: Managed service providers (MSPs) using open source products to monitor their clients’ and their internally hosted IT infrastructures. That’s a very different proposition than, say, using open source as part of a Web development service or adopting a LAMP stack in a hosting environment. Here’s why.
Today as technology providers grapple with a weak economy, anything less than an all-out effort to increase sales — either by attracting new customers or earning additional business from existing clients — is short-sighted. IT Solution Providers need to refocus on becoming sales-driven organizations. You can start by resetting your in-house priorities. Delegate non-demand generating activities to external support specialists by using a virtual help desk. If you don’t offer this service, this is a good time to do so as long as any added cost is tied to added revenue.
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