Less Vendors = Higher Profits, So Why Are MSPs Still Adding to Their Stacks?
Research shows that the most profitable Managed Service Providers (MSPS) only partner with a few vendors, typically one or two. By reducing the operational overhead of vendor management, and thereby eliminating the consequences of vendor sprawl, MSPs can reallocate those resources and cut costs to impact their bottom line. Despite these well established findings, many MSPs are carrying the weight of several vendors, but why?
More is more … right?
Eh, not when it comes to your vendor stack. Many well intentioned MSPs are driven by the desire to meet all client needs, from any industry, of any size. While that’s a great aspiration, and something SMBs want to hear, there is a downside. Every vendor you add to your stack adds to your management costs. With each new billing process, onboarding procedure, support system, and dashboard, more is required from you.
Techs need training and certification in each solution, or you hire based on specific expertise – both of which require competitive compensation. Disjointed backup and recovery can take longer, leaving clients open to more downtime. Breaks in business continuity jeopardize SLAs, client relationships, and your reputation in the channel. And operationally, someone has to manage all of these workflows – another expensive and complicating cost to add to the equation. Sure, you may have a larger quantity of clients, but what are you sacrificing in quality of service? And most importantly, what is it costing your MSP?
Less is more … really!
The correlation between a simple stack and profitability is undeniable. With the right vendors, with comprehensive solutions, you can still meet any SMB’s infrastructure requirements, while significantly increasing efficiency. Less vendors means less processes to juggle for billing, onboarding, support, and dashboard management.
When disaster strikes, your techs can quickly take action with less procedures to wade through, and opportunities for human error and confusion to compromise your SLA. You can also elevate your SLAs with confidence to drive competition, while securing long-term contracts with clients, and positive word-of-mouth in the channel. Even still, you can hire more novice techs because they don’t need to understand a multitude of solutions, they just need to master one. This is a huge win for cutting employee overhead, which accounts for a large part of your budget. Additionally, marketing – often a pain point for MSPs – becomes much easier because you can finally focus your attention, accumulate necessary content and collateral, and optimize strategies quickly and precisely.
Reducing the number of vendors in your stack enables you to do things that directly affect your bottom line. Of course profit growth is a main goal for all MSPs, but the stress relief of a simple stack cannot be overlooked. Sleep confidently, ensure peace of mind for clients, and reallocate the time you spend managing backup, to growing your business.
Where can you lighten your load?
It’s not a hard equation to understand, but simplifying can be a difficult leap. Once you let vendor sprawl creep into your MSP, it can be difficult to push rewind. At the same time, clients appreciate and understand your evolution as a technical business – especially if they gain value with new solutions. Evaluate your current solutions, while taking time to explore, research, and vet what’s available.
- Consider industry changes like the digital transformation we’re seeing now, and the increasing popularity of cloud-based services we’ve seen for years. How many vendors are you using to meet all of your clients’ disparate backup needs? What are you unable to provide that clients want and need today, and in the future?
- Evaluate the market to drive competitive advantage based on your target audience. Why should the same client choose your MSP over a competitor with the same solution?
- Quantify your overhead and management costs. How much are you spending to train techs, manage administrative tasks, complete on-site visits, compensate expertise, produce marketing campaigns, and so on?
Get started with Axcient
Because Axcient is a 100% channel-focused solution provider, we understand the simplicity necessary for MSPs to thrive. And that’s why, after years of R&D, we responded to the digital transformation, with a unified platform for BCDR, cloud to cloud backup, and secure sync and share. The x360 portal supports multi-tenant management for easy access to all client backups through one single sign-on portal. Everything, including training, support, billing, and even pre-built marketing campaigns are accessible through a single pane of glass.
Most recently, we launched Direct-to-Cloud hardware-free BDR to support the influx of remote workers, and rising ransomware attacks. Now, MSPs can meet all client backup needs with just one vendor for endpoint and public cloud backup, plus turn-key, and no-appliance BDR. Schedule a demo, or start your free 14-day trial now!