How Cybersecurity Can Save Your MSP
By Jennifer Bleam, MSP Sales Revolution
If you've been an IT service provider for more than seven years, you probably remember the transition from break-fix to managed services. That transition was a time of tremendous opportunity. Rather than sporadic income and anxiously waiting for the phone to ring, you were able to obtain the holy grail: recurring monthly revenue. You simply delivered what your clients wanted — technology without downtime and without persistent issues — and eliminated what you did not want — to be paid by the hour.
Prior to that transition the market was crowded the lowest bidder often won business while the higher priced companies (usually with higher overhead such as tools, insurance, real estate, and payroll) struggled to differentiate themselves. Managed services provided a way for reputable IT companies to increase their revenue while moving themselves out of the crowded red ocean where all companies were grappling for the same business. MSPs with solid sales and marketing systems were able to grow their businesses quickly.
But as the saying goes, all good things must come to an end. Today, most IT companies have multiple competitors, just a stone's throw from their office, who all deliver the same (or nearly identical) services. This has landed us right back into the commoditization challenge we faced about a decade ago.
Once again, a massive shift is happening in our marketplace: cybersecurity sales. Because most IT companies haven’t yet cracked the code on selling cybersecurity, the earliest adopters are able to use cybersecurity as a significant differentiator, winning business and moving themselves back into a blue ocean of opportunity.
Most IT companies are not marketing themselves as cybersecurity experts. Yet cybersecurity services are valuable to small and midsized companies. Your clients and prospects are starting to become aware of the impact a cyber incident could have on them personally, professionally, and financially. Smaller companies cannot afford large ransomware payments or incident response fees. In addition, compliance requirements are increasing and privacy concerns are growing. These trends are creating a perfect storm where businesses need to mitigate this risk and can only find a few firms to provide those services. Clearly, this represents a revenue opportunity for you.
Secondly, because there is such a need for these services (and the value is strong) profit margins are much higher with cybersecurity sales than with managed services. Leading channel vendors suggest that IT companies take their costs for procuring cybersecurity solutions and two to three times those costs. Most IT companies haven’t traditionally priced their managed services at such steep margins. Unfortunately, this reduces company profitability, reduces owners comp, and affects salability of the MSP. Conversely, cybersecurity sales should be priced at a level that gives the end user tremendous value while providing a healthy profit margin for MSPs. This increases the overall health of the company.
Cybersecurity sales allows you to position yourself as a thought leader and differentiate yourself in this very crowded marketplace. When you combine healthy margins with a non-commoditized specialization, you have a winning recipe for success. This is an exciting time for our industry, and for those who master the art of selling cybersecurity.
About The Author
Jennifer Bleam is owner and founder of MSP Sales Revolution.