Branching Out: Adding Software Services to Your MSP Offerings

Scott Calonico

It’s fair to say that certain MSP revenue streams are on the decline. The continuing popularity of cloud services demonstrates that the “big boys,” including Microsoft, are having some success in muscling in on the ongoing income that the SME market can generate.

With a proportion of the revenue that was once spent on value added reseller services now being spent on monthly cloud service subscriptions, it is wise to consider how your MSP business can adapt, and branch out into other areas of IT to protect income.

One way you can do this is to consider in-house software development. The good news is that this is an area where demand is strong.

A significant reason for this demand is the popularity of smartphones and tablets. Many SMEs are beginning to think about their own iPad apps – both as a way to increase their own exposure and revenue and as a way to streamline their business processes. These companies need someone to build these apps – so why not work to be that someone?

Meanwhile, as businesses grow, they start to need custom software and databases to store their information. Rather than seeing this revenue go to specialist firms, consider building up the in house expertise to earn it yourself, and then make money providing on-going software support.

If you are considering branching out into software services, you should consider the following points:

1.      It’s rarely a good strategy to be a “jack of all trades” and a master of none. Think about what kind of software development would be a good fit for your business and for your clients. Depending on your client base, you may have more demand for tablet apps than databases, or vice versa.

2.      Your existing team should be your starting point when considering the resources needed to begin developing software for your clients. Perhaps some team members have existing coding skills that could be developed or would welcome the opportunity for some training.

Think about what you could do by developing your existing staff resource alongside ideas of recruiting specifically for the purpose.

3.      It’s essential to be honest as to whether your MSP truly has to capacity to undertake an additional activity. If you cannot honestly say that your firm is providing a great service to existing clients, dedicating time and resource to a new activity could do more harm than good.

4.      Providing bespoke software solutions is a long-term commitment. Having a single developer on the team when nobody else understands the code is a risky strategy. Code must be sufficiently well documented that it is easy for a new programmer to understand, and your company should have a good “plan B” in case it loses personnel with specialist knowledge.

5.      Outsourcing can be a way to begin to offer software development services, with many firms making use of offshore programmers. If you plan to outsource, you must ensure you are completely confident of your outsourced team – your MSP’s reputation rests on their output.

Producing software for your clients is a surefire way to boost revenue, but only if you can provide well written apps and databases whilst maintaining a good service in your other areas of business. If you’re confident you can, you could be on your to some significant extra income.