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3 Essentials for Moving from Break-Fix to Managed IT Services

Author: Eric Torres

Moving to managed services is a great play for a number of reasons. Managed service providers (MSPs) build steadier recurring revenue from clients than traditional project-centric/break-fix models or value added resellers (VARs). Over the long term, this ongoing engagement also makes MSPs better candidates for mergers and acquisitions. So, if you don’t want to work forever, it’s smart to build a big base of happy managed services clients.

But MSP success is about much more than just renting technology instead of selling it. Competition in the managed services market is intense. If you don’t aggressively differentiate your value, you’ll wind up in a low-margin race to the bottom.

To optimize margins and achieve high retention, MSPs must re-think client engagement entirely. Here are a few tips for doing so:

1. Beans over bits: MSPs don’t sell technology. They deliver digital business capabilities via an economically optimized model. Dollar-quantified business cases are thus central to MSP engagement. And those business cases must include top-line impacts—not just savings. This can be a challenge for channel pros accustomed to “better, cheaper” sales narratives. Anyone, though, can promise better and cheaper. The best MSPs win clients for life by being the partner those clients need to execute continuous digital transformation that pays off quantifiably, quarter after quarter. Shaving points off an IT budget won’t win that game.

2. Climb vertically: Technologists are often dismissive about vertical markets. After all, backup is backup—whether a client serves burgers or subpoenas. But backup requirements—as well as those for computing, mobility, apps, and analytics—vary significantly between verticals. More importantly, clients think about their digital requirements in vertical terms. So you can’t tell a realtor their needs are just like those of a trucker. And you can’t intelligently guide a client’s digital transformation if you don’t know their industry. That’s why market-leading MSPs pick markets in which to lead—and are highly intentional about leading them.

3. Pick the right partner: Choosing the correct partner will have a large effect on your business. You must choose someone who offers the proper technology solutions and will help you drive revenue. Partner with a vendor who can offer services and technology that would otherwise be impossible for an MSP to provide on their own.

Bonus: If you find these tips helpful, check out the rest In our new eBook, 5 Tips for Break-fix to MSP Success. This eBook provides information to help you make the transition from break-fix and how you can gain the competitive edge. Head over to the Datto resources section and download it today!

Eric Torres is channel development manager at Datto Inc. Read more Datto blogs here.

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3 Comments

Comments

    Jim Barnet:

    I think Eric makes a great point about vertical market expertise. Techncial “set-up/deployment “expertise in the cloud based world is becoming less relevant, so industry/vertical expertise, and how to map solutions to those vertical specific use cases is one great way to differentiate yourself.

    I also liked Eric’s point about selling ‘Beans over bits’. Selling to the customers’ Line of Business decisions makers (vs. CIO) is also big shift for many MSP/IT Solution providers. Especially because the LOB decison makers don’t care about the technology, only about how it helps them achieve business outcomes. Learning about the business outcomes that each customer LOB department manger cares about, and how to link the managed services offerings to how they impact those business outcomes, is the key to adding value to those conversations.

    Picking the right partner, whether it’s for BDR or other MSP focused solutions is important, but also bundling your own unique value added services and combining solutions into a “bundled” service/solution offering is another way for MSP’s to differentiate themselves.

    Great article Eric, thanks for sharing.

    Regards,
    Jim Barnet
    Promys PSA
    Director Sales & Marketing
    Tel: 905-847-6539, ext. 2972
    Cell: 647-239-2942
    jbarnet@promys.com
    t: @PROMYS_PSA

    Eric Torres:

    Thanks Jim! I appreciate it. I couldn’t agree more about discovering the business outcomes via technology, from the LOB decision makers, being a key factor in providing solutions. Those are the ones that are going to go to bat for you if it’s ever needed, forming a true partnership rather than just a customer/vendor relationship.

    Thanks for reading Jim!

    Dave McPherson:

    Hi Eric:
    Thank you for the thoughts.

    It makes me think of my clients in a different way. They invest their lives in their business. They consider their business as special and unique. Therefore, they are a vertical. Or they need to be approached as one.

    Your points also made me think of my own business. I hadn’t thought of ourselves as dealing with “verticals”. But, as I think of our own client base, I see Automotive dealerships, Furniture stores and Trucking companies, among others. Our approach has been that they typically have similar technology needs, more or less. But that is irrelevant. Because we serve these businesses, that means, or should mean, that we understand their day to day operations, at least a bit. That means that we have also worked with their suppliers in one form or another, if we are doing our job right. Our company can bring experience in Automotive DMS systems, POS systems or Satellite tracking systems, among others, even if we do not supply those actual services. Bringing that skillset to the table means that we become more of an asset to the client than just an expense. You are right. Treat each company as a vertical and supply them with the solution that means their business model. Sure, the technology may overlap, but that just makes the job of implementing it easier.

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