A Starter Guide to IT Managed Services

Transcription

1 A Starter Guide to IT Managed Services A successful managed services business is reliant on a solid business strategy and service delivery model as well as finding the right technology for your needs.

2 Table of Contents Introduction: Why Should I Read This Guide? Part 1: The Role of the MSP Part 2: Formulating the Right Strategy Part 3: Choosing the Right Tool Part 4: Pricing for Profit Part 5: Watch Out for These Traps Part 6: What You Can Hope to Achieve When Building a Successful MSP Part 7: Safe Systems: The Right Way to Build a Successful Managed Services Business The Conclusion: What We Learned

3 Introduction: Why Should I Read This Guide? This guide will help you: The market for managed services is growing at double digit rates and the nature of the services demanded by client organizations is evolving rapidly. Indeed, the success and popularity of managed services has expanded the number and type of companies who want to participate in this rapidly growing segment of the IT industry. Now many hardware and software vendors, systems integrators, communication services providers, hosters and others have joined the fray and are competing to offer a wide range of managed (and cloud) services to client companies of all sizes. For those yet to begin it can seem daunting to consider starting a managed services business either as a start-up or as a component of an existing business. However, many Managed Service Providers (MSPs) start by simply addressing the IT needs of companies in their immediate vicinities. They grow by delivering great services, improving cost-efficiency, developing the trust of their clients, and by adding new service capabilities and attracting newer and larger clients over time. The 2014 Kaseya MSP Pricing Survey results show that it is possible for MSPs of all sizes, from those with less than ten employees to those with greater than 100 employees, to grow profitably. The survey asked Kaseya MSP customers to indicate their monthly recurring revenue growth rate over the previous three years. 96% of all respondents experienced positive growth! It also shows the pricing strategies they use and the services they offer. This Starter Guide to IT Managed Services will walk you through how to create and develop your own managed service business. Kaseya works with hundreds of companies that have transformed their one-man shops into successful managed services businesses with thousands of managed end points. By embracing the Kaseya IT Automation Framework, these customers have formulated and executed on a managed services strategy that allows them to manage from hundreds to thousands of systems robustly, reliably and securely with just a handful of technicians. So, take a walk with us. Read this guide. Take advantage of one of today s most profitable business trends. Develop and execute on a solid business strategy for running a managed services company Choose the right IT systems management solution to help enable your vision Price your managed services fairly, competitively, and profitably Understand MSP pricing and profit scenarios including cost, profit, and MRR/project/break-fix calculations and analysis Avoid some common pitfalls Understand the benefits that come with implementing managed services correctly Understand how an IT service provider successfully rolled out managed services for its customers and transformed into one of the largest MSPs in the country

4 Part 1: The Role of the MSP The role of a managed service provider is to provide quality IT services to customers quickly and efficiently for a consistent and attractive price. But there s a second part. The role of an MSP is also to make money. Remember, you aren t just building a job for yourself. You re building a business, and businesses need to be profitable. Building a successful managed services business is very different from building a traditional reseller business, albeit one that provides technical support. The reseller business leverages the power of the vendors whose products are resold. Vendors provide training, brand image, marketing materials, market development funds (MDF) and technical backup. They may even provide sales support and leads. The primary focus of the reseller is sales and while there may be a significant professional service component to any deal, the majority of the revenue generated is for the vendor solution being resold. Typical deals are one-off projects where the entire revenue is recognized up front. A managed services business couldn t be more different. Yes, you absolutely need good sales people but selling managed services requires different skills. You ll need to generate your own marketing activities and, most importantly, you ll need to be able to design, offer and sustain excellent services. That means great technical skills and a strong set of tools to ensure you can be both productive and efficient. Even with annual contracts, your revenues will be monthly subscriptions that you ll use to pay the salaries of the technicians supporting your customers. While strong sales and marketing capabilities will be vital, of most importance will be your ability to continuously improve the effectiveness of your technical staff, the most expensive of your resources, so that you can improve profitability and retain your customers for the long haul. Finding the right technology is the easy part; management solutions are just tools. MSPs need to focus on the business aspects of managed services, blending a solid business strategy with the right tool that will enable you to implement your vision. Why I want to be an MSP MSPs are approximately % more profitable than non-msps Pure play MSPs are approximately 25-50% more profitable than hybrid model MSPs MSPs are 3x to 10x more valuable than traditional VARs Source: Kaseya Worldwide Customer Survey, 2012

5 Part 2: Formulating the Right Strategy Building a successful business is more than just technology. Successful companies understand how to take the art of providing a service and turn it into a business. They make sure they get the basics right. They are good companies first and then they leverage technology. Companies that get the business part right and flub the technology part won t grow very fast but will chug along and survive. On the other hand, service providers that use the right technology but can t handle growth or manage daily operations will most likely fail. However, it s companies that get both the business right and choose the appropriate management solution for their needs that are wildly successful. Running the business the right way is that critical. Here are six tips you can use to build a profitable business model: 1. Take a Proactive, Preventative Approach Any dentist will tell you that it s much easier and less painful to prevent a cavity than it is to pull a rotten tooth. It s also a better business model because years of semi-annual checkups are likely more profitable for the dentist than a one-time tooth extraction. It s the same with IT systems management. Identifying and heading off minor problems before they become major issues is a more efficient and more successful way of maintaining the availability and performance of your customers systems. Automation is the key. Make it a standard business practice to identify and resolve issues before users are aware. Set thresholds capacity and memory ceilings that your customers systems need to meet to be in compliance. If they fall out of compliance (or come close), have automatic and manual processes in place to fix them. Top Ten List of IT Tasks Primed for Automation 1. Patch management and software deployment 2. User and group maintenance 3. Network security sweeps 4. Disk usage scans 5. Device and network performance monitoring 6. File transfers 7. Code promotion (from staging to production) 8. High-level, routine administration 9. Reboots 10. Malware scans Source: Kaseya Community Postings & Script Utilization Statistics, 2012 Being proactive reduces downtime and speeds time to resolution, ensuring your customers users have access to the tools and information they need. At the same time, preventing problems helps avoid fire drills where your team is forced to run around putting out fires to maintain availability and performance standards. If they re not constantly cleaning up, they re able to focus on more strategic projects.

6 2. Stop Managing Individual Machines and Start Managing Policies and Machine Groups The days of managing machines one at a time are over. Successful MSPs create, update and apply policies to groups of machines, managing exceptions while keeping systems in compliance of predetermined conditions. Create, edit and push out base images for each type of machine in your customers environments Windows 7 desktops, Exchange servers, ipads, Finance Department and spend your time making sure the images are robust and applied consistently. Aggregate your management tasks and think how you can apply changes by machine group (ie, Exhange servers) across your entire customer base. Focusing on exceptions rather than each machine streamlines IT systems management, eliminating the repetition typically associated with one-machine-at-a-time maintenance while ensuring consistent IT service across environments. 3. Talk Cash Money is the universal language. Every conversation you have with customers needs to be based on outcomes i.e., how much money you can save them or how much additional revenue you can generate. If a customer needs to upgrade to Windows 7, position it as a way to increase the productivity of users and to streamline licensing costs. If a backup process needs to be made more efficient, mention the price of a typical data recovery job and the cost savings of using less bandwidth. When going after new business, calculate how much the customer spends on managing IT and show how much they can save by outsourcing to you. Stress that they will be able to focus on their core business because you have IT covered. Get internal IT staffs on your side by quantifying how you can enhance their efforts, create efficiencies and make their lives much easier. 4. Get Your Head in the Clouds Successful MSPs manage a variety of IT services for their customers delivered through the cloud. This allows them to pick best of breed solutions and deliver these services to customers in an efficient manner. Customers deserve a choice of solutions that work best for them rather than only what is available through their technology provider. For the MSP, delivering services through the cloud allows it to become a manager of services rather than simply a technician. By outsourcing the nitty-gritty to cloud providers, MSPs can focus on high-level strategy, helping customers manage relationships and integration with cloud vendors.

7 5. Keep Up with the Jones s It s important to stay on top of innovation in the IT industry, constantly improving your services while finding new ways to benefit customers. Get certified. Take classes. Participate in the social conversation taking place in the growing number of community-focused destinations. Connect with evangelists within the industry so you can pass that knowledge on to your customers. And be creative when marketing yourself. There are many smaller companies that could benefit from managed services but may not know any better. Spend the effort educating potential clients, investing now for a payoff down the road. Your goal should be to create a community of like-minded business professionals who can share best practices and contribute to the common good. It s also important to be wary of high-maintenance customers who may not be worth holding onto and may drag down your more put-together clients. Keeping on top of trends and innovation in the industry allows you to be nimble and flexible so you can take advantage of market opportunities. It also keeps you locked in with the needs of your customers and it virtually eliminates any thoughts they may have of replacing you. 6. Target the Suits Many MSPs have solid relationships with the boots on the ground, the guys who plan and operate their customers IT strategies. That s great, but don t forget to embrace users and the management team. Talk to users about their IT needs and get a feel for the business so you can help the company achieve its goals. Be seen as a technology partner to the management team rather than a service provider beholden to IT. It s also important to manage expectations through monthly and quarterly meetings, making sure everyone is on the same page with IT s role and capacity planning. These regular meetings can go a long way toward ensuring management knows the good work your team is doing and how you can help the company in the future. Properly engaged, users can be an asset, used to conduct basic maintenance on distributed machines so you don t have to. Set up policies that allow them to make authorized configuration changes, downloads, patches and applications (and make sure you block unauthorized changes as well). User self-service saves you time, saves users time, gives them a stake in the health of their system and ensures consistent IT service across the organization. Top Needs of IT Users End-to-end device protection Guaranteed services levels Minimal disruption to user productivity and core business processes Top Needs of MSPs High customer satisfaction rates Low administrative expenses Strong profits Industry credibility Scalable foundation for long-term growth Source: Kaseya Worldwide Customer Survey, 2012

8 Part 3: Choose the Right Tool The managed services business model is enabled by the technology you use to deliver IT services to your customers. However, there are dozens of solutions. How do you choose the right one for your unique needs? IT systems management solutions come in several flavors based on the software s architecture. Point Products Single-feature point products such as an asset management solution, a help desk solution or monitoring software are a common option for smaller network deployments or for IT professionals with a lot of patience for integrating disparate management solutions. They work well for what they are engineered to do but should not be an option for a provider that is serious about managed services. The initial cost may be tempting, but you have to weigh that against the long-term overhead burden from implementing, learning and maintaining multiple tools. Appliances Appliances are advertised as simple to install, simple to configure and simple to use essentially a tempting way to short-cut the complexities of initial IT systems management deployment. But they tend to sacrifice functionality and flexibility for ease of use and cost. Feature sets tend to be more limited than comparable toolsets, which can leave you with gaps in service when it comes to implementing a complete and proactive IT systems management strategy. Agentless Software Agentless management software solutions often provide a richer feature-set than appliances and do not require agent software to be deployed on each managed system. They are ideal for managing network devices and software applications such as hypervisors where there is no need to perform non-native actions such as limiting or reporting on a file change, remote control access, etc. Management activities, such as monitoring and configuration changes, are achieved by polling over the network or over the Internet, depending on connectivity. In this way, agentless software solutions are completely dependent on network connections. If connectivity is lost, so is control and management reporting, taking away device visibility and inhibiting manageability just when those capabilities are needed the most.

9 Agent-Based Software Agent-based software solutions can provide the types of feature sets, reliability and robustness required by just about any sized customer from small SMBs to large enterprises. By placing natively written agents on each managed device, MSPs are given the greatest level of control to perform any task necessary. Some of the leading solution providers offer lightweight agents (<2MB) and boast rapid deployments at rates that exceed 99 percent. Agent-based software is protected from outside influence and can continue to operate when non-agent based software may be effected by network, authentication or configuration issues. Cloud Services Many MSPs are now looking to the cloud to deliver IT services to their customers. The ability to package best of breed solutions in a single branded managed service is a cost-effective way to efficiently monitor, maintain, update, secure and back up distributed systems. No architecture is a true magic bullet, but a combination of several architectures can provide powerful functionality, scalability and control while maintaining a high-level of service delivery. The right ITSM solution should be able to manage through agentless technology at all times (with perhaps limited functionality) and be able to manage through agents for full functionality (with some services delivered through the cloud). This dual architecture ensures stability and consistency throughout your customers environments no matter what gets thrown at you. It s important to have both the context (visibility into all systems) and the ability to take quick, immediate action (control over all systems) when necessary. Relative Cost of MSP Tools IT Management Tool Transaction Cost Total Lifetime Cost Open Source 0 $$ Point Source $ $ Appliance $ $$ SMB On Premise Solution $$ $$ SMB Cloud Solution $ $$$ Enterprise Solution $$$ $$$ Key: low cost ($), high cost ($$$) Source: Kaseya Internal Management Survey, 2012

10 Choosing the Right Tool Feature Benefit Impact Automated Eliminate redundant, tedious administration Reduce human error; provide better services; efficient service delivery; higher margins Remote Provides visibility and control Efficient service delivery; higher margins Complete Standard service delivery across the spectrum Nothing falls through the cracks; seen as a one-stop shop Accessible Can manage machines from anywhere with an Internet connection Services get done in a timely manner; more secure Fast Resolution Improve uptime Improved user experience; more productive employees Scalable Can add systems to the management apparatus without degrading existing services Can grow as the market dictates without worrying about capacity or capabilities Light-Weight Small footprint on managed machine and network No performance degradation

11 Part 4: Pricing for Profit A big part of the managed services business model is the ability to charge a single, low price per managed machine. An alternative is to charge a bundled price per IT user or per service offered. These prices promote efficient service delivery since the less money you spend maintaining and updating machines the higher your margins will be. It also gives your customers a consistent and predictable budget item so they can plan appropriately and should normally be less than they would spend doing it themselves, of course. But what should that price be? We ve surveyed our most successful managed services customers for you, and they suggest MSPs be flexible, yet consistent, with pricing. Here is a look at some pricing options from a variety of service providers in various stages of the MSP development track. As you can see, the more providers advance toward true managed services the more profitable and valuable they become. KPI/Status Break-fix Reactive Proactive Managed Average Deal Size Varies $100 per hour $50 to $150 per user per month $1000 to $5000 per month Gross Profit Less than 10% 50% 70% Greater than 75% Utilization Less than 50% per tech 50% per tech 70% per tech 90% per tech Firm Valuation Less than Source: Kaseya Worldwide Customer Survey, 2012

12 How do you price your managed services? The short answer is, It s completely up to you. And whatever the answer, it should be consistent with your MSP business strategy goals, such as I am a pure play MSP or I am a hybrid MSP. Once you make your growth strategy decision, the most common MSP pricing strategies are: Value-based pricing determined by the value your services deliver to each client. Value-based pricing is becoming the norm for most MSPs and particularly for faster growing MSPs. Market-match pricing where pricing is based on a combination of service differentiation and competitive pricing in your area. Cost-based pricing where you mark-up the service delivery cost per item (device/server/user) to give you the gross margin you need for your business. Although cost-based and market-match pricing would seem to be both easier to compute and more competitive, the key to your MSP success is to price your managed services based on value. You must speak with your customers and prospects to determine the value they place on having optimized systems and protected networks. For example, a retail client who collects $10,000 in online sales per hour values server monitoring services, business continuity services and rapid response SLAs much differently than a branch office with only a few part-time employees that runs quarterly reports that are not strategic to the firm s corporate office. Using value-based pricing ensures that you are able to differentiate your services on the things that matter most to your customers. Done correctly it also ensures that you are maximizing profits but you must know the cost of your service delivery efforts first. So, how do I calculate my service delivery cost? The cost of service delivery is the sum of the cost of your billable employees plus the cost of your infrastructure (overhead). These two costs then can be broken down to determine a base hourly cost to give you a full understanding of your service delivery cost so that you can pick a pricing strategy that maximizes the profit for your MSP. What constitutes billable employee cost? Billable employee cost includes everything that is reflected on a billable employee s W2 at the end of the year, including costs above and beyond gross compensation. These costs include compensation, FICA, FUTA, SUTA, disability, worker s compensation, healthcare, sick leave, PTO, vacation and holiday pay, profit sharing, pensions, 401k matching contributions, retirement benefits and any other additional bonuses earned.

13 What constitutes overhead cost? Overhead cost includes all of your other business expenses including all non-billable employee costs. These include compensation, insurance, tools, company meetings, training and education, phone and Internet services, vehicle costs, utilities, rent, equipment and maintenance, supplies, loan service, bank fees, other payroll and taxes. To determine your full hourly cost, which remains a common cost basis for a lot of IT services work, sum your billable employee cost and overhead cost, divide that sum by the number of billable staff, and divide that number again by 2080 (typical paid work hours per year). In a typical scenario (let s say you have three billable employees) your billable employee cost is $225,000 per year and your overhead cost is $300,000 annually. The hourly cost determination for three billable employees is: Annual cost (employee cost = $225,000) + (overhead cost = $300,000) = $525,000 $525,000 / 3 (billable employees) = $175,000 $175,000 / 2080 (paid work hours/yr) = $84.13 In this example, your hourly employee cost is $ But how does utilization rate impact cost? Your billable employee s utilization rate will impact your true cost of service delivery. In this example, a 100 percent utilization rate assumes no vacations, sick days, holidays, training days, drive time, etc., and the impacts on hourly cost are directly affected by the utilization rate: Utilization 100% Hourly employee cost per hour $ $ $98.98 $84.13 How do I price managed services for profit? To show how price and cost impacts MSP profitability, consider a typical MSP scenario. Assume you have 15 managed services contracts averaging $4,000 each (value-based pricing) for a gross revenue amount of $60,000 per month. Next let s assume you have three service desk technicians whose combined full hourly employee cost at 100 percent utilization is $84.13 per hour.

14 Now assume that for the last billable month, your service desk technicians spent 150 hours managing service desk requests and proactively patching, updating and optimizing your clients endpoints. Let s also assume that their overall utilization was 75 percent for that month (so their hourly cost will be $112.17, in this scenario). Using these data points you can determine the cost to support your managed service contracts for the month, including your margins, as follows: Metric Calculation note Result Revenue 15 contracts x $4,000 per contract $60,000 Cost 150 billable hours x $ (@75% utilization) $16,825 Profit Revenue - cost $43,175 Margin (Profit / revenue) x % A margin of 72%. Managed services are highly profitable in this scenario, aren t they? But what about the rest of the billable hours in the month? In this scenario, we ve only accounted for 150 hours out of a potential 480 for that month (40 hours x 4 weeks x 3 billable employees), so we have a balance of 330 hours left. Assume we allocate these hours to T&M work and projects. Again using a factor of 75 percent for utilization, this allows 247 hours to distribute evenly in this example (123 hours to T&M work and 124 hours for project work). Let s assume a T&M rate at $150/hr and a Project rate at $200/hr. Hence, we are a hybrid MSP, with a mix of pure play managed services and consulting projects. So let s take a look at our total blended revenue, costs, profit and margin for the month, which includes the following revenues: Metric Calculation note Result Managed services revenue 15 contracts x $4,000 per contract $60,000 T&M revenue 123 billable hours x $150 per hour $18,450 Project revenue 124 billable hours x $200 per hour $24,800 Total monthly revenue $103,250

15 And it also includes blended costs: Metric Calculation note Result Managed services cost 150 billable hours x $ (@75% utilization) $16,825 T&M cost 123 billable hours x $ per hour $13,797 Project cost 124 billable hours x $ per hour $13,909 Total monthly cost $44,531 So your blended profit is $58,719 (monthly revenue monthly cost). And your blended margin is 57% (blended profit / blended revenue). In this example, can you see the impact of non-managed service work and how it impacts the profitability of your MSP (72% pure play vs 57% blended)? Also, the MSP in this blended revenue scenario manages a mix of 58 percent recurring service contracts. Using this data, they can determine if they should acquire more service contracts or maintain this balance (to support a large hardware rollout with a key customer, for example). In conclusion, this is a very basic analysis for a MSP to determine margins when utilizing the same group of billable employees to deliver flat-fee, time and materials and project-based services at different billing rates. Using scenarios such as these, you can calculate a cost and fee structure to analyze the performance of your MSP and make services mix changes, as needed, to help you achieve your long term MSP business strategy goals.

16 Part 5: Watch Out for These Traps The allure of the managed services business model is strong. Recall our scenario of 72 percent margins? Migrating to a managed services business can be complex, yet it doesn t have to be. Once you decide to make the switch, or if you ve already made the decision, avoid these common pitfalls: Getting Bogged Down by Technology Avoid IT systems management solutions that require complex integration and have limited visibility and control. Resist the urge to save capital costs by using freeware or heavily-discounted solutions. They are going to cause more trouble than they are worth. Solutions that bog down your staff prevent you from focusing on the aspects of building a managed services business that truly matters. Instead, focus on formulating a service delivery strategy, improving communication with customers and settling on set processes. Getting Ahead of Yourself Growth is good, but make sure you re not biting off more than you can chew. Have the infrastructure in place to scale effectively without degrading services for existing customers. Getting Into a Routine Consistency is good but make sure you work on things that make work fun for you and your staff. No one grows up dreaming of patching machines every night. Automate much of the tedious administration typically associated with IT systems management, and challenge your employees to work on projects they care about and initiatives that help customers become even more successful. Most Common Barriers to MSP Success Inconsistent execution due to lack of centralized oversight and control Reactive technical processes Labor intensive processes Source: ChannelPro Magazine, 2012 Getting Stuck in Overtime Overtime is a productivity killer, encouraging disengaged technicians to slow down or slack off. This can sap margins and cause cost overruns for customers. Automate tasks that have to be done overnight or on the weekends and empower your technicians with remote access tools that enable fast resolution from home or on the road.

17 Part 6: What You Can Hope to Achieve When Building a Successful MSP The managed services business model when set up and executed correctly gives you... Better Visibility Across Customer Environments With Kaseya, one of our people is equal to 5 to 10 people working manually on the ground elsewhere. Chris Wiser CEO, TechSquadIT And...

18 Better Control Over Managed Assets Which leads to... Higher Quality of IT Service for Users And... Lower Cost of Operations Which leads to... Additional Revenue for Your Business And... Higher Profit for Your Managed Services Business

19 Part 7: Safe Systems: The Right Way to Build a Successful Business Long a proponent of extending its reach beyond the Southeast, the management team at Safe Systems set a goal in 2005 to grow its customer base by 25 percent per year for the next four years and transform the company into a national player. The company set a lofty growth goal of 15,000 managed devices across the US, which was five times the number of current systems that administrators monitored and maintained. In order to meet this aggressive goal, Safe Systems decided to migrate from a traditional break-fix services company to a more efficient managed services business model, providing basic monitoring and maintenance services for a fixed price. However, the company was having trouble scaling its managed services delivery model past 3,000 managed assets well short of the ultimate goal. After several months of trying to implement managed services we realized we needed to not just change the way we manage our customers systems, we needed to change our whole business model, said Curt Frierson, executive vice president of technology and education for Safe Systems. Scalability through a New IT Automation Platform Hitting reset, Safe Systems created and rolled out a new managed services framework that embraces automation, policy management and a proactive approach to delivering IT services to its growing customer base. After investigating software from Dell, N-Able and Level Platforms, Safe Systems deployed a managed services solution from Kaseya that gives its administrators complete access and visibility into its customers IT environments from a central Web-based console regardless of the location of each system. The automatic and remote solution allows technicians to set policies for groups of systems and keep the machines in compliance. Safe Systems at a Glance: Profile: As a technology partner, and recent recipient of several prestigious awards, Safe Systems has worked with over 600 financial institutions and manages more than 25,000 network devices nationwide. Founded: 1993 Headquarters: Alpharetta, Georgia Website: Critical to its new strategy, Safe Systems set up a Network Operations Center (NOC) staffed with dedicated technicians who could roll out standardized managed services seamlessly and quickly across the country. Communications with customers improved, and relationships turned into partnerships.

20 We can now scale our services much more easily with Kaseya, helping us migrate customers over to the new service delivery model as they come up for contract renewal with minimal interruption to day-to-day operations or customer service, Frierson said. As part of its assessment services for new customers, Safe Systems used to send two engineers on-site often flying them from Atlanta to evaluate the network and make recommendations based on growth trends, current inefficiencies and business goals. The engineers would stay on-site on the company s dime for several days conducting the service. Now, this same service can be conducted remotely through the Kaseya solution in several hours, speeding up the deployment process, saving travel costs and further enabling seamless scalability of the company s services. Fast, Pragmatic Business Growth As a result, Safe Systems was able to meet its aggressive growth goals, surpassing 25,000 managed systems in early Most importantly, this growth has occurred without the company having to add staff, dramatically increasing profit margins that enabled further investment into their growth plan. While technology was a major enabler of the managed services business model, it was the realization that the way the company was run needed to be addressed that made Safe Systems the major IT service provider it is today. Five keys to engaging with customers 1. Have a process in place 2. Provide proactive solutions and automate everything 3. Constantly review 4. Measure yourself in $$$ 5. Earn trust Curt Frierson executive vice president of technology and education, Safe Systems

21 The Conclusion: What We Learned It takes vision, dedication and hard work to build a profitable and sustainable managed services business. Like most successes, it isn t something that happens overnight. Yet there is clearly an enduring and expanding business opportunity to provide IT support and services to small and medium-sized businesses, although risks and competitive challenges certainly abound. The recipe for success as an MSP includes the following key actions: Focus your sales, marketing and service delivery resources on maintaining existing and developing new monthly recurring revenue streams. Seek every opportunity to improve efficiency. Efficiency reduces costs and improves profitability. Efficiency also makes it possible to go after larger opportunities; to manage larger, more profitable clients. Recognize that clients are interested more in value and outcomes rather than costs and methods. The more service components you can deliver to a customer, within an umbrella, bundled services price, the more attractive and sticky your service offerings will be. Strive to be a true business partner and to work across all levels within your clients businesses. Forego short term resale opportunities for a longer term strategic partnership and to earn trusted advisor status. Choose IT management solutions that will contribute to your growth over the long haul. Those that support your increasing drive for efficiency; those that support your need to frequently add new service components; those that reduce your costs and allow you to build trust and satisfaction with your clients so that you can retain them year-over-year. Kaseya has helped many MSPs become very successful. We d love to help you too. About Kaseya Kaseya is the leading provider of cloud-based IT management software. Kaseya solutions allow Managed Service Providers (MSPs) and IT organizations to efficiently manage IT in order to drive IT service and business success. Offered as both an industry-leading cloud solution and on-premise software, Kaseya solutions empower MSPs and mid-sized enterprises to command all of IT centrally, manage remote and distributed environments with ease, and automate across IT management functions. Kaseya solutions are in use by more than 10,000 customers worldwide in a wide variety of industries, including retail, manufacturing, healthcare, education, government, media, technology, finance, and more. Kaseya is privately held with a presence in over 20 countries. To learn more, please visit Kaseya Limited. All rights reserved. Kaseya and the Kaseya logo are among the trademarks or registered trademarks owned by or licensed to Kaseya Limited. All other marks are the property of their respective owners. EN-SG02152 Rev