Getting a Leg Up in the Managed Services Market

Fresh from Witsbits:

One type of company we’ve been working with a lot recently is providers of managed IT services (often called Managed Service Providers or MSPs), which typically support “working IT” for their clients.  As I’ve been working across the industry to help MSPs get more efficient with virtualization, I’ve recognized some common challenges that many providers face:

1.  Keeping Costs Under Control: It’s a competitive world out there, and the MSP space is no exception. All MSPs are working hard to keep their costs down while providing high service levels. Their clients often pay a fixed monthly price, so it’s up to the MSP to deliver quality while minimizing cost (which is the typical way MSPs can increase their margins).

2.  Delivering Quality Efficiently: In contrast to many consultants that actually make more money when they spend more time on a task, MSPs get more profitable by spending less time making IT work. Their clients don’t care as much about the details of how everything is done, as long as their email, business apps, etc. all work consistently.

3.  Managing Distributed Infrastructures: The very nature of an MSP targeting small to medium-sized businesses requires managing small sets of servers in many locations – on-site at each customer’s offices, and sometime in combination with servers in the MSPs data center or in other hosted facilities. As a matter of fact, the more successful an MSP is, the more distributed and diverse its environment becomes, and the bigger infrastructure headaches it deals with.

With challenges like these, it’s no surprise that successful MSPs are some of the most well-oiled companies I’ve seen. I’ve noticed three key best practices that are common amongst the best MSPs:

1.  Serving a Niche: While not unique to MSPs, this best practice is even more critical when so much (but certainly not all) of what an MSP does is based on largely commoditized technologies – and hardware and bandwidth are getting cheaper all the time. Not only can deep knowledge of the most popular technologies for a particular industry, company size, or geography help customers feel comfortable that their IT provider understands their business, it can also help the MSP save time and keep margins high.

2.  On-boarding Customers Quickly: MSPs at the top of their game can be amazingly fast at getting their customers’ servers and applications up and running, including initial setup and conversion from old systems.  This in turn helps those MSPs offer lower prices, which reduces barriers and increases ROI for new customers as they switch providers and/or systems. Streamlining customer on-boarding is a great way for MSPs to win more deals.

3.  Leveraging Strategic Virtualization: Admittedly I’m biased, but I’ve seen MSPs save massive amounts of time and money by leveraging virtualization with centralized management and automation. SaaS-based virtualization solutions like Witsbits offer MSPs greater flexibility and ease of use, so they can seamlessly manage very disparate, hybrid environments.

As a matter of fact, Witsbits is undergoing pilot projects with several technology service providers to help them get more efficient and keep costs low.  Some specific examples include an MSP that’s managing servers spread out over more than 100 of its customers’ geographically dispersed locations; a point of sale provider that’s working to improve efficiency as it manages and monitors its clients’ point of sale servers; and an infrastructure-as-a-service provider that’s deploying virtual machines for its public and private cloud environments powered by 30,000 servers.

Please contact us if you’re an MSP that’s interested in gaining better efficiencies using SaaS-based virtualization. We’re here to help and love to hear from you!

Mikael Lirbank, CEO, Witsbits

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