By Grady Gausman, BitTitan
As managed service providers can attest, there have been many challenges in the managed services landscape in recent years. From security to scalability to attracting new customers, MSPs dealt with a host of issues and have had to adapt on the fly. These challenges kicked into high gear in spring 2020 when the coronavirus pandemic forced companies to suddenly shift to remote work. MSPs found themselves at the forefront of this transition, helping customers mobilize remote operations amid economic uncertainty. Under these market conditions, it is more important than ever for MSPs to drive profitability and recognize how to stand out in the marketplace.
To better understand how MSPs succeed, BitTitan commissioned a survey on how successful MSPs drive profits and stand out in the marketplace today. Below are five key tips the survey revealed.
- Maximize Your Most Profitable Services
The survey asked MSPs to describe which of their services are most profitable. Most partners identified SaaS, networking, cybersecurity, business continuity, and disaster recovery as services that generate their highest revenue. Not only were these services profitable before the pandemic, but they also have grown in importance with the increase of people working remotely. This indicates there continues to be an opportunity for MSPs in these areas.
- Invest In Marketing And Sales
Because many MSPs are founded and led by individuals with tech backgrounds, marketing and sales strategies often take a back seat. This is evident from the survey, where less than half of the respondents reported investing money to these ends. Less than 16 percent of respondents described marketing and sales as a priority for investment. Smart MSPs will acknowledge this area must not be overlooked and see this as a necessary investment to drive leads and business growth.
- Increase Total Security Offerings
All MSP services require adequate and reliable security to ensure client information is protected. There are many different ways that MSPs may sell security. Smaller partners with fewer than 10 employees tend to focus more on endpoint protection and network security in the form of standard, branded security products. This is because they often serve small customers who may not find profitability in providing security for themselves. Larger partners with more than 10 employees are more inclined to focus on complex services such as cyberthreat hunting, mobile and application security, and fraud protection. Larger clients are less likely to need endpoint protection and network security, as they have enough resources to support it on their own. Rather, they find interest in additional niche preventative security offerings that they may be unable to support.
- Understand That Profitability Drivers Will Vary Between Small And Large MSPs
Successful MSPs drive profitability in different ways depending on their size. Small partners will find profitability in programs such as technical support and the ability to control pricing and margin levels. Large partners, on the other hand, are more profitable in selling support such as training efficiency, development of branded services, and vendor marketing and sales programs. Regardless of size, there are also steps an MSP should take to prepare for scaling, such as implementing a next-generation roadmap, investing in revenue sustainability, focusing on marketing and sales to capture new clients, and building efficiencies into the model.
- Work With Vendors Who Can Best Support You As An MSP
Choosing the right technology vendors is one of the most crucial business decisions for MSPs. Partners from the survey said they prefer to collaborate with vendors whose product fits well with the rest of their service portfolio, and who enable them to differentiate their service from competitors. MSPs should look for vendors who demonstrate an understanding of their business model, invest in programs to support services development, and define the pathway to profitability and strong ROI. Further, many successful MSPs increase their margins through the integration of their product with vendors. The integration allows the MSP and vendor to share costs to deliver, operate, and host a service.
The shifting managed services landscape poses many challenges and opportunities for MSPs. The information gathered from resources like the managed services survey commissioned by BitTitan can be leveraged to help MSPs tackle the challenges they face in the current market. MSP services are needed now more than ever, presenting an opportunity for MSPs to demonstrate a deeper understanding of their customers’ needs and help them navigate our “new normal.” By focusing on providing services that will help businesses most, MSPs can enable customers to continue business operations and address their most pressing needs, rising to the occasion as a true, trusted partner.
About The Author
Grady Gausman is a Product Marketing & Analyst Relations Manager at BitTitan, where he works closely with sales, marketing, and product management teams. He specializes in the areas of SaaS, cloud technologies, product strategy, and go-to-market initiatives.