The Weather Report

Managed Service Only Businesses are Missing the Boat

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There are days when I am seriously disappointed in certain IT business owners, though, not much surprises me anymore. As many businesses are growing, adding revenue, embracing cloud, and moving forward; there are just as many that are stuck in a mindset and wondering why their business is faltering.

As part of our sales department’s function at ExchangeDefender, we are tasked at times with reaching out to partners to provide leads that come in through a number of different resources, whether that is email, calls, word of mouth, or social media.

Today, we had a potential customer ready to purchase a good number of the XD spam solution. One of our sales team members assured the customer that we have partners in their area that they could work with to facilitate the purchase. After reaching out, the partner said that they do not provide solutions to customers unless they are “fully managed.”

How crazy is that? Turn away a recurring revenue stream? There are a number of problems with this partner’s thought process, and this isn’t the first time I have experienced an MSP that won’t work with non-managed service customers.

  1. First of all, “how the heck do you get new customers if you will only work with managed service customers?”
  2. Who in their right mind turns down recurring revenue, where the amount of work that needs to be done is to invoice the customer every month, and collect the money?

Luckily there was a partner ready and willing to provide service to this customer. The fact is that there are these types of businesses out there. If you are one of them and holding on to a notion, “managed services only”, that a coach or MSP trainer told you was the way to go four or five years ago, the reality is this is a horrible business model.

With all of the changes, new competition, and minimized opportunities; i.e. fewer hardware sales it is important not to give up any potential opportunity.

One thought on “Managed Service Only Businesses are Missing the Boat
  • There are a number of reasons for the MSP only model.

    1. You are more profitable when you can support all of the clients in the same manner, process and procedures.

    2. Clients on a single feature (like your SPAM example) tend to forget where the support lines are drawn. They become unhappy when being charged for services they think should have been covered. Example: Yes you are doing spam, but the Domain registration and DNS are not part, yet some person in marketing changes the web site and switches the DNS, leaving off the MX records. Or their ISP changes IP addresses and the firewall is not updated.

    3. The bottom 20% of your customers often take up more of your time and resources. They either don’t understand or you have not positioned your services properly. In the long run, you are better off finding the clients that fit the model you want to be in.

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