Many resellers and IT solutions providers are hitting a wall. Much of what they do is a commodity, it is a fight for every customer, and margins are thinner than a Paris runway model.
The answer, for the right company, could be to become a managed service provider (MSP).
An ITEXPO panel packed with gurus from IBM, Cisco and One Source Networks this week in Las Vegas gave attendees all they need to know to plot their MSP move.
In “How to Start a Managed Services Business,” panelists first addressed why one might want to become an MSP. Unlike commodity reseller or solutions relationships, MSP engagements tend to be longer, and because the MSP is adding more value, the margins are higher.
That is true for hardware, software as well as bandwidth and transport.
Ernest Cunningham, CEO of One Source Networks, knows this well. Cunningham entered the MSP space because his customers asked him to, and he stayed for the margins!
Cunningham’s advice? Listen to your customers, and design managed services to meet their needs. These could be vertical, based on company size, or technological such as solving storage pain points.
Cisco’s Manoj Bhatia, Sr. Product Marketing Manager, GTM Strategy, Collaboration Technologies, knows all about going to market. He had two key pieces of advice. First, you must establish your credibility right from the start. That means knowing the technology you are providing, the business case, and how to articulate it. This must be in place before you land your very first customer.
And when it comes to that first company, don’t assume they will be in the U.S., Bhatia told the Las Vegas’ audience. The U.S. is known for its high bandwidth data centers and equally high level of expertise so it attracts foreign clients.
Allen Dickenson, Worldwide Program Director for Cloud Computing for IBM, believes good vendor partners are a critical lifeline for budding MSPs. With a vendor partner, or partners, you don’t have to build it all yourself. In fact, the three panelists represent network and unified communications (Cisco), cloud infrastructure software (IBM), and networking, transport and cloud and managed Services (One Source).
Dickenson, who contributed to “Cloud for Dummies,” sees MSPs as being able to extoll the virtues of the cloud, little CAPEX for instance, in laying the groundwork for a managed services sale. MSP just adds another layer of value.
Edited by
Alisen Downey
