Blog | February 11, 2014

Quick Tips For Your As-A-Service Transition

By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

BSM-Risk-Reward

Many break-fix VARs tell me that they believe the as-a-Service model and more recurring revenue would be good for the health of their business, but they don’t know how to get started. Reading articles about established managed services providers can be overwhelming. We don’t assume the transition from break-fix is easy, but we do think it’s necessary, and so we strive to give you as much actionable information as possible on the subject. This is the main reason why we’ve dedicated so many pages in our magazine to the topic. Heck, it’s the reason we launched our conference, Channel Transitions.

While at RSPA INSPIRE last week, two veteran MSPs took to the stage and provided attendees with some simple advice concerning the move to the as-a-Service model. Both led their respective companies from break-fix models to the MSP model — and much improved profitability. Unfortunately, because I was scribbling so furiously, I can’t remember who said what. I beg their pardon now, and will attribute all of the following nuggets of wisdom to either and both Israel Lang and Brad Schow (both now with HTG Peer Groups).

  • Good news for retail IT VARs looking to make the transition: the general IT space already went through a shift to the MSP model. They have answers to most of the questions you have! Get to shows like CompTIA Channelcon, ASCII's regional events, or events put on by the PSA and RMM providers. I've been to most and the quality of the education will blow your mind.
  • Sell and describe your services as “getting more reliable performance with a more predictable expense." Many customers don’t like the idea of having to drop a ton of cash when something goes wrong. They also don’t like downtime, right? Managed services like remote monitoring and management allow customers to stay up and running with preventative maintenance while avoiding costly downtime and equipment replacement.
  • Don’t dive all in. Establish an initial offering that you know you can be great at.
  • Look for a “wedge” you can introduce. That is, a product that fits your market, your expertise, and introduces existing customers to the concept of a monthly service. Once you’ve wedged open the door, your customers will be more open to additional services. We’ve written about this plenty. There’s no need to dive all in. Start small and build.
  • Don’t offer your customers a service that’s “all you can eat” without controls. You don’t want to be losing money on customers.
  • Don’t underestimate your price. New MSPs often make this mistake.
  • Make sure you standardize. Create now more than a few tiers of services for your customers and make them stick to it. Standardization allows everyone in your company to provide better service, ensures customers are getting the best solution, and allows your company to be more efficient.

The above just scratch the surface of the as-a-Service transition. I realize that. However, if you collect a few tips here and a few there, you’ll be on your way to making better, wiser decisions about your transition. Incidentally, if you're a VAR in Santa Ana, CA, Boston, or Chicago, I have a few free passes I've been authorized to give away to VARs. Check out our Channel Transitions microsite and hit me up if you're interested.

The Gran Melia Golf Resort in San Juan, Puerto Rico hosted the RSPA INSPIRE Thought Leadership Summit Feb. 2-5, 2014. For complete coverage of RSPA INSPIRE, go to www.BSMinfo.com/go/InsideRSPA and http://blog.bsminfo.com.

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