How MSPs Can Be More Profitable

Jul 13, 2015

How MSPs Can Be More Profitable

BY Holly Wainwright

BCDR

Time is money. This holds especially true for MSPs, when added time spent managing their technology offerings translates to valuable tech time (and money), and time spent away from growing their business. In today’s blog, we’ll look at how MSPs should focus on simplicity to remove unnecessary time and complexity, and the impact it has on one’s bottom line.

Simplicity here means straightforward and easy. The power of simplicity lies in the clear understanding and confidence it instills throughout the MSP organization. From technical staff performing rapid restores to a salesperson’s ease in articulating a simple pricing model, MSPs provide example after example in which simplicity equals less work and greater profit.

Paul Weeden, Managing Director with MSP Foration, puts it like this, “The best way to be more profitable is to do less. The best way to do less is to be more reliable.”  For him, “the level of automation and integration we get from our Total Data Protection provider means we do less and enables us to punch above our weight.” In addition to careful selection of his vendors, Weeden’s team also relies on ongoing analysis of his customer interaction data from Salesforce.com as key to continuously improving profitability. “We analyze data to understand which clients we’re underserving or over serving, and then whether they’re just being greedy, or if they or we are doing something wrong.”  Time is money.

MSP profitability can take a hit from vendor complexity. “Having a high-quality product can be completely offset by having a complex pricing model. You’re never going to sell it because it requires so much additional resources to articulate it and make sure it’s appropriately positioned,” explains John Manley, Virtual CTO with MSP Atlantic, Tomorrow’s Office. It’s important to look for a vendor with no hidden fees and one that offers predictable cloud billing.

For MSP EDTS, CIO Delano Collins conducted an 18-month analysis of data and anecdotal experience from their support engineers. The analysis revealed that an overly complex solution with little automation, integration, and self-service of a (now previous) backup vendor cost EDTS the equivalent of a full-time engineer in extra effort. Ouch. This resulted in EDTS performing a “fork-lift” upgrade to a new Total Data Protection provider for nearly 50 clients. Moving to the comprehensive, yet easy to manage, solution with no hidden fees, saved EDTS more than $210,000 per year on the bottom line, compared with the earlier solution. 

Based on his new vendor’s fixed-price model enabled EDTS to re-invent its Total Data Protection deployment process for greater efficiency. “Because we aim for a low barrier to adoption, we charge a flat installation fee – and sometimes we waive it,” says Collins. “That means we have to get in there with surgical precision, get it installed, get it going, and get out of there.”

To hear more from these successful MSPs, and their tricks for making more with less, check out the new eBook from Datto. A quick read can help yield great profit.

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