The past few years have seen a paradigm shift in how IT businesses make their money. It’s no longer possible for MSP’s to survive on the margins that come with selling software and hardware. Clients are now looking beyond traditional on-site solutions, servers and hardware. They have their sight firmly set on the Cloud.
It’s easy to understand why. Whereas traditional on-site solutions were slow and costly to plan and deploy – often requiring days of an IT suppliers time, plus up front and considerable payments for servers and software, Cloud services are typically very rapid to deploy. Cloud services also typically don’t require an upfront investment. Instead the client can pay for the services they use on a flexible monthly basis.
All of this can lead most businesses, including IT Solution Providers and Managed Services Providers, to believe that the Cloud is simply “cheaper”.
The single biggest mistake an MSP can make when selling Cloud Services is sell based on the fact the Cloud is “cheaper”.
While there is certainly a market for MSP’s who solely want to help their clients save money by moving to the Cloud, any business based on cost-cutting alone is a precarious and fragile one. Winning business based on cost is a race to the bottom, and is rarely sustainable.
The true reason MSP’s should be advocating a move to the Cloud is not based on cost savings, but based on flexibility and increased features.
All of this is not to say that MSP’s shouldn’t highlight the fact that moving to the Cloud can save their clients money, but rather than the client will be receiving a superior service with lower ongoing costs that should free up IT budget to spent on creating even more value.
All of these cost-savings mean that the client has freed up budget to engage the IT Solution Provider to work on other projects that will provide even more value to the business.
The danger to any MSP of selling the Cloud based on cost-reductions alone is that you will attract customers who don’t see IT as a value-add, as a competitive advantage to the growth of their business. You will attract customers who see IT as a cost – and one which is to be continually reduced.
For most MSP’s, these aren’t the type of clients you want to work with.
While moving to the Cloud can almost always reduce costs for clients, it’s a mistake for MSP’s to lead their conversations with clients based on cost savings alone.
If MSP’s focus on the increased flexibility and additional benefits that come from moving to the Cloud – the real value of these services – then selling Cloud services becomes a way of enabling MSP’s to begin conversations with their clients about how they can use the cost savings to begin projects that will add real value in other areas of the clients business.
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As the former owner of an award winning IT Managed Service Provider, Richard Tubb works with MSPs to help them increase sales, take on employees and build up relationships with key industry contacts. You don't have to do it alone any more - contact Richard and have a chat about your needs and how he can help you.