Your business model works – stay true to the model
The MSP business model is a beautiful thing – managed services generating recurring revenues, solid margins, branded services, and clients who love the value you provide. Many MSPs that I consult with are reluctant to change their model to offer cloud and telecom services because traditional telecom and many cloud services are based on agent commission model breaking the MSP resale model that is rooted in branded services, customer direct billing and resale margins. There are new options now!
Serving all of the customer’s IT needs is a critical premise of the MSP model. Expanding your offer to cover customer’s needs is exactly what you should be doing! The fact is IT, telecom and cloud are converging more than ever. You, as the IT guy, are THE guy (or gal) who is in a perfect position to help clients with this convergence.
The recurring revenues from cloud and telecom are so substantial. IDC estimates 32% of annual IT spend goes to telecom. You can build a business division around these products that becomes 30 – 50% of your total company profit margins. Seriously.
Cloud & Telecom opportunities that fit your model
So, how do you capitalize on the opportunity and still stay true to your business model? Here is a step by step approach to help you capture to the revenues, maintain your business model and NOT completely disrupt the smooth running business that you have built up.
Telecom Managed Services
First, offer telecom managed services as a part of your offering. What a great way to differentiate yourself from your competitors and also better serve your clients. By getting involved in managing telecom, you establish yourself as THE expert in the space and therefore the odds-on entity they should consult with when seeking upgrades, backup, or new services. There are great tools out there that enable you with quality assessment, data, reporting and value added services that your customers will appreciate. And, it’s managed services – what you do best.
Lync and VoIP quality assurance
Office 365 and Lync are some of the hottest cloud products that MSPs are selling and supporting for customers. Lync has quality and accessibility issues where customers will seek assistance from their MSP. Quality issues with Lync are typical. Networks are not always VoIP ready, so there will likely be situations where clients need network analysis and quality assessment to get back on track. With the right tools, this is right up your alley.
Lync Audio Bundle
In a similar fashion, Lync lacks full audio integration with the telecom network, so many clients seek an Audio Bundle integrated with the Lync service. When participants cannot reach the Lync call due to connectivity issues or less accessible locations, the Audio Bundle can ensure that all invitees can participate. Now the Lync service is everything that it was touted to deliver when sold.
Telecom Resale options
Now the elephant in the room – telecom resale. Traditionally, telecom resale requires a much higher level of knowledge of telecom, higher responsibility for complicated billing and taxing and FCC accountability. Because of this, only the most sophisticated telecom experts have taken on the challenge to become a CLEC or telecom reseller.
In the last few years, new players entering the fray have created new and exciting opportunities in the telecom resale space. Options range from the largest Tier 1 Carriers offering a resale program that comes complete with training, preferred billing and taxing partners, MDF and assistance engaging consultants. This model is typically appropriate for a sophisticated telecom agent or larger MSP with the resources to establish the sales, operations and customer support operations required to become a telecom reseller.
A newer and popular option with MSPs is a full resale model enabling private branding and resale margins, but full support for bill creation, tax calculation and remittance, and FCC accountability that remains with the carrier. The carrier remains the carrier of record before the FCC protecting the reseller to a degree. This model is preferable for the MSP requiring a higher level of support, protection and enablement. There is still a need for a support infrastructure that can grow with the growth in the base of revenues.
While the options for cloud infrastructure solutions have exploded recently, there’s one solution that helps you present the full spectrum of IT services to your customers – VDI – Virtual Desktop Infrastructure. Traditionally, only appropriate for the larger enterprises due to complication and scalability, VDI has gone mainstream for MSPs through a cloud based Custom White Label offering. Experienced vendor partners have done the hard work of setting up hosting environments to enable MSPs to effectively offer 5 and 10 seat SMB solutions all the way up to solutions with hundreds of seats all in a secure and easily manageable Custom White Label offering.
The awesome part of VDI, is that the solutions VDI addresses cross all aspects of the IT infrastructure including security, mobility, application management, software and hardware refresh and network connectivity. The VDI conversation with a customer wraps the entire IT infrastructure around a strategic business conversation that invariably opens doors to new opportunities.
Many Cloud and Telecom services are available in a resale model to help you stay true to the profitable and value building MSP business model. Capture what you can via resale and supplement the remainder with trusted partners in a commission model. Stay true to your model, and also capture revenues and margins from IT spend that your customers would like you to manage. For more information about any of the resale opportunities discussed here, contact Jack Knocke at The VAR Advisor at jack@theVARadvisor.com.
Lead Consultant, The VAR Advisor