Blog | September 26, 2012

Take The Guesswork Out Of Managed Services Pricing

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

If you've attended any of the recently-held trade shows and partner conferences, or have been following this blog or our magazine for any length of time, you'll know that the notion of adopting a more services-centric business model is all the rage.

For good reason. Increasing sales is one thing, but being more profitable is another, and offering services that yield monthly recurring revenue is one major step toward profitability.

While the concept of a subscription model might seem simple on paper, many VARs I've spoken with have found the pricing of managed services to be a tricky business. First and foremost, make sure you cover your costs. That's a no brainer. Beyond that, setting your pricing becomes a game of "too much?" or "too little?" and can result in customers being over- or under-charged. Additionally, do you charge per person, per device being managed, or in some other way?

If you're a company new to managed services, or one looking to refine your pricing model, I encourage you to check out "Advice On Pricing Your Managed Services," which appears in the Oct. issue of Business Solutions. In the article, a panel of experts speak to the topics I mentioned above, as well as other "gotchas" that can negatively impact your chance of success.

Lastly, don't hesitate contacting your vendor partners in this space. While a managed services model might be new to you, your vendor partners can share the best practices they've seen from their entire channel of managed services providers.

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