Backup and disaster recovery (BDR) and similar offerings have long been the staples of managed services providers’ (MSPs’) menus. But no matter the vertical market you’re in, bringing a more comprehensive list of managed IT services to the table is the way to go. What’s more, it benefits not only MSPs, but their customers as well.
Let’s start from a purely selfish point of view—the point of view of MSPs themselves. Unlike following a break/fix model that probably includes BDR, contracting with customers in any vertical segment brings a steady, predictable stream of monthly income.
However, this is just the beginning. The sale of hardware, a strategy many MSPs have traditionally followed to compete with value-added resellers (VARs), produces increasingly thin margins. Making things even worse, some hardware vendors are selling directly to larger customers (and in some cases, medium-size ones), creating even more competition for clients’ hardware dollars.
The margins for managed IT services are far, far fatter. This is in large part because software and the cloud form the basis of a large chunk of managed IT services. Remote monitoring and management (RMM) solutions used as part of these services enable a myriad of endpoints to be efficiently monitored, controlled, managed, and repaired—opening the door wider for increased profitability.
Offering managed IT services also gives MSPs a route in to new markets. For example, recent years have seen a sharp spike in the implementation of mobile devices in seemingly every vertical, from retail and hospitality to professional services to local government and more. Customers are looking for managed IT services that give them seamless connectivity between IP-enabled devices and mission-critical networks—and smart MSPs are delivering them.
Then, there are the benefits to featuring a full complement of managed IT services that touch MSPs and customers alike. Here’s a big one: Few, if any, entities that engage MSPs are willing to hire one organization to provide a single type of managed IT service and a different one—or multiple operations—to provide another kind of managed IT service. So those MSPs whose tech toolbox includes a diverse array of managed services have a bit more to offer; customers see the advantage of convenience. At the same time, MSPs have the potential to attract more business and do a better job of serving their existing clients, which leads to client stickiness.
Just as significantly, the managed services model enables MSPs to offer better service to customers without raising their prices above what they would charge in a non-managed IT services scenario. How is this possible? Most managed services just cost less than traditional break/fix services, particularly when the price of downtime is figured into the equation. Remote monitoring, remote maintenance, and the prevention of major issues make MSPs more efficient than would ever be possible if all services had to be delivered via “in-person” calls. So service can be delivered faster, yet more affordably.
Finally, clients aren’t the only ones who rest easier when the automated piece of managed IT services kicks in, keeping an eye on clients’ systems, finding and addressing problems, safeguarding networks, and the like. MSPs, too, can take a break and enjoy it, knowing the automation they’ve invested in is doing its job. That could be the biggest “win-win” for everyone.
Suggested Additional Reading
Julie Ritzer Ross has been covering technology and its application in multiple vertical markets for more than 25 years. Her work has appeared in a variety of vertically focused publications including Transaction Trends, Hospitality Technology, Consumer Goods Technology, Integrated Solutions, Integrated Solutions for Retailers, Government Technology, RIS News and Vertical Systems Reseller (formerly Retail Systems Reseller).
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