How to Break Into Managed Services A 12-Step Program Regina P. Ciardiello Editor Vertical Systems Reseller (VSR) March 18, 2009 Edgell Communications Background B2B Publishing company founded in 1984. Includes 9 magazine franchises, executive conferences and Web Seminars/Podcasts. Custom Newsletters. The voice of the SMB reseller community. Monthly print publication. Newly re-launched interactive Web site (2nd time). VAR Central weekly newsletter. Real-Life Solutions monthly case study newsletter. New for 2009: VSR Knowledge Centers, which includes MSP Corner Podcasts. MSP Corner Knowledge Center Established in 2008. Designed to provide new and current MSPs with “real-world” solutions. Twice monthly podcasts with featured Zenith partners. Best practices and “take-aways” to help you build your business model. Why Managed Services? There’s a paradigm shift happening. VSR’s 4th Annual End User Study reported that 42 percent of end users choose to work with MSPs – up from 35 percent surveyed in 2008. Customers now expect more for less. Can control pricing. Allows you to be “proactive,” not “reactive.” Ability to provide constant 24/7 support. But is it Really that Difficult? The short answer is: “No.” VSR and Zenith’s MSP Corner Podcast Series can help you get started. Learn from 12 well-respected Zenith partners, who are currently established as MSPs. But how do I really get started? Step #1: The True Cost of Delivering Managed Services Laura Steward, President, Guardian Angel Computer Services How do I know if Managed Services is right for me? How do you become an MSP? How do you successfully manage this component of the channel? How does the cost of providing services affect an MSP’s operations base? Step #2: Effectively Drive Operational Efficiencies John Mamon, COO, Radical Support Opportunity for recurring revenue. Managed Services should be about the customer experience. Value proposition should be aligned with customer expectations. Take things one step at a time, and you will be as efficient as possible! Step #3:Avoid the Sales and Marketing Gap Dan Hay, CEO, IS Outsource Embrace new challenges. Sales and marketing is not just for new prospects. Position both yourself and your company toward closing the deal. Find out what the customer really wants. Referrals are key – offer incentives. Step #4: Maintain A Competitive Profit Margin Brett Jaffe, President, Axis Microsystems How do you price your services? Find out what your competitors are charging. Employ creative thinking to uncover “found money.” Don’t “overprovide” – only offer services that you know the customer really needs. Step #4: Maintain A Competitive Profit Margin Brett Jaffe, President, Axis Microsystems How to deal with the current economy. Transform yourself from a “tech person” to a “business person.” Focus on sales and marketing techniques (as outlined in Step #3). Run your MSP practice as a business, rather than a “tech shop.” Cut non-profitable clients; focus on those that generate profit. Step #5: Choose the Right Software/Services Partner Harry Bhatia, CTO/President, Net Activity What are the deciding factors when it comes to making the right choice? What is the software vendor going to provide…how are they going to help you? Buy before you try. Peace of mind. Step #6: Evaluate Current Staff and Business Requirements Larry Shulman, President, L.M.S. Technical Services Create an effective business model that will drive revenue. Hire (and retain) the best people to strengthen your team. Work with people you can always trust. Pitch new clients as they relate to your company's business model and staff base. Step #7: Develop Creative Packaging and Pricing Randy Sklar, President, Sklar Technology Partners Value proposition; offer something that’s going to set you apart from the rest. Offer a fixed fee: No up-front money is required. Same fixed fee expected each month. Less effort, higher retention rate. It might seem like a long road, but it’s worth it in the end. Step #8: Initiate End User Processes and Validation Mohit “Mo” Vij, Founder and CEO, General Informatics Learn from each other: Proactively look for maturity level in client, educate them and help them understand the process. Once this is assessed, ensure the client onboard and you have their “buy-in.” Examine the client’s “M.O.” – How do they operate? Step #9: Understand the Benefits of the Service Desk Daryl Rinaldi, Owner, GizmoFish “But I am already working with the Network Operations Center (NOC).” Do I really need a service desk? Key selling point A skilled technician is just a phone call away. Steady revenue is attractive. Benefits to both MSP and end user. Step #10: Establish Effective Communications – 24/7 Joel Swanson, Operations Manager, ACoupleofGurus.com Provides customer “intimacy, hence heightened trust level. Higher level of value proposition. Customization. Someone is always available to help – even after hours. Cost-effective in terms of staffing. Step #11:Understand the Benefits of Outsourcing Dan Wilson, President, Waypoint Solutions Save money, increase profits = happy partners and happy customers. Effective employee time management. Potential customers are more likely to work with a partner who outsources their help/service desk. keeps small problems from escalating into big problems. Step #12:Offer Customer Peace of Mind Ed Becker, President, BeckIT Systems Allows MSP to be strategic, both in their thinking and measurable results where technology is directly contributing. End user can reach a qualified, experienced and caring technician at any time. Allows MSP to remotely access end user’s desktop – at any time. Closing Thoughts Fixed pricing is best – no surprises. Get on an intimate level with your customers. Clear communication is key. Run your MSP operation as a “business.” Seek customer referrals. Hire and retain staff both you and your customers will trust. Might seem like a long road, but well worth it in the end. Useful Links and Resources www.VerticalSystemsReseller.com www.CompTIA.org http://www.mspalliance.com/ www.zenithinfotech.com Contact Information If you have any further questions, or to request any additional information in regard to today’s broadcast, please feel free to e-mail me at: rciardiello@edgellmail.com. Also, to access a library of up-to-the minute resources as it relates to the channel, you can always log on to www.verticalsystemsreseller.com.