From The Expert Feature Article
November 28, 2013

MSPs Must Move Off Break-Fix to Prosper

CompTIA (News - Alert) knows a thing about MSPs; after all, hundreds of them are members of this non-profit organization. And it knows MSPs have to keep up with the times or be left in dust.


Part of this is getting away from the break-fix hamster wheel and building recurring revenue through sticky high-level managed cloud services. And even once you have cloud services, continue to expand them.

“The best in class are branching out,” said Jim Hamilton, vice president of member relations at CompTIA. “Services that are well established tend to have restricted margins and tend not to be as profitable,” he explained. “But people who go out and develop new technology solutions tend to be more profitable.”

In fact, Hamilton just didn’t surmise this to be true. The organization did research and found that, “the best-in-class companies invested twice as much in new services compared with the average MSP.”

In its “Quick Start Guide to Managed Services” CompTIA offers advice on how MSPs can grow beyond break-fix where your revenue is dependent upon handling incidents and keeping things running rather than providing new value. One way to identify new opportunities is to listen to customers. “Use your IT help desk to spot trends. More than fixing customer problems, your IT

help desk can be your direct connection into your customers’ long-term business planning—revealing their wants and needs through casual conversations with your support personnel,” CompTIA argued. “Next, leverage your NOC (News - Alert) (network operations center) to track performance, reliability, and scalability trends within your customer settings.”

One CompTIA member is already living that advice.

“The origin of our offering is not from a product manager, it really comes from the customers themselves. To strengthen the dialog, EnabledSuccess launched a user group that meets several times a year via conference calls,” said Rene Theberge, national sales manager at EnabledSuccess Inc., an Ottawa MSP.

CompTIA Says Cloud is Where it’s At

Gone are the days when IT questioned the validity of the cloud, fretting about security and just what would happen to all their jobs.

Today the talk is more about what apps are appropriate for the cloud and when it’s time to make the move.

Research from CompTIA and others is backing this view. There are three applications that CompTIA sees as leading the cloud charge. “As cloud components are becoming more prevalent in IT architectures, more companies are relying on cloud computing for business processes such as storage (59 percent), business continuity/disaster recovery (48 percent), and security (44 percent),” the channel advocacy organization found.

The public cloud is the largest cloud sector, and here IDC (News - Alert) finds that public cloud IT services, a $47.4 billion market today, will be a $107 billion market by 2017. Meanwhile at a compound annual growth rate (CAGR) of 23.5 percent, the cloud is growing five times faster than the overall IT industry. And overall public cloud services are also on the move, growing 18.5 percent at the market moves from $111 billion last year to $131 billion this year.

VoIP Traction

MSPs may also want to consider VoIP, a technology that replaces expensive, inflexible legacy telephony gear with services that are ever scalable in terms of features and reach. Visiongain (News - Alert) covers this market and saw last year as a watershed. “We believe that 2012 is a landmark year for VoIP services. With operator revenues from voice in decline; now is the time for ecosystem members to implement their VoIP strategies. The deployment of LTE and 4G networks will revolutionize VoIP services and have a transformative impact on the telecoms market,” the company said.

UC on Fire

While VoIP is hot, so is the VoIP-based unified communications market, which is poised for strong growth, according to research from Transparency Market Research “Unified Communications (News - Alert) Market - Global Industry Analysis, Size, Share, Trends and Forecast, 2012 – 2018”. According to the report, the UC market will grow an average of 15.7 percent per year from now until 2018, when it hits a market size of $61.9 billion.

Other Hot Cloud Apps

While companies should look at selling services that fit the existing business, MSPs can also make a lot of money selling broad services such as Web hosting, storage including backup, disaster recovery, and business continuity, to your current customers.

Other Broad Services Include IaaS and PaaS.

Here are 6 applications in demand by customers and technically well suited to the cloud, apps MSPs could easily add with the right partner:

1. Email – Cloud mail solutions are well proven and not just the G-Mails and HotMails which serve consumers just fine. Enterprise grade Microsoft Exchange works terrifically well in the cloud. Even better, customers today are quite comfortable adopting cloud mail so it is a pretty easy sell.

2. Collaboration – Collaboration tools, such as SharePoint, are perfect for the cloud. These tools are all about sharing, and end users are on a variety of clients from an array of locations. The cloud is the great equalizer, allowing for richer sharing. And on-premises SharePoint takes a lot of IT effort to set up, and a fair bit of infrastructure.

Then comes time to build the SharePoint apps themselves. Some of the most effective SharePoint apps are done by small departments for short term projects, apps built guerrilla style. The cloud supports this fast tactical style of development to a T, while lifting the infrastructure weight off IT shoulders.

3. CRM – Customer Relationship Management is likewise ideal for cloud deployment. While complex to install and manage on-premises, pre-packaged cloud CRM tools can be put to work immediately, and are perfect for sales and customer care workers that are either mobile or remote. Like e-mail, customers tend to be very comfortable with CRM in the cloud.

4. ERP – ERP made its move to the cloud mainly because the in-house installations are so expensive, take so long, and often are prone to glitches as they roll out. The cloud replaces all this infrastructure and set up with a ready to roll system just waiting for clients to customize and make their own.

5. Custom built legacy tools – Corporations have been building custom apps for years, but this software is increasingly difficult to maintain. It may run on older operating systems on top of outdated runtimes – all of which are near impossible to keep installed as hardware turns over. And most of these underlying software bits are no longer supported. Rather than migrate these apps to more modern on-premises systems, and remain on that upgrade treadmill, you can migrate them one time to the cloud and be done with it. A great way to do so is with a PaaS. This may be a tougher sell, as clients depend on these apps and may not be sure how well they’ll do in the cloud. But if you land it, it can be a high margin business.

6. Disaster Recovery – The cloud is probably the best thing to ever happen to DR. Doing disaster recovery involves a lot of software, disks, and admin time. And even then IT can barely keep up with ever growing storage demands. The cloud takes that all away and replaces it with a secure backup tier on a service provider network, one that is redundant, protected, and fully available.

This approach is often called Disaster Recovery as a Service (DRaaS).