Flourishing MSPs Deliver More, Charge More: Study
Managed service providers (MSPs) that deliver better also charge high, according to a new survey done by technology firm Kaseya. The 2017 MSP Global Pricing Survey includes data from more than 900 MSP respondents in more than 50 countries including India.
“This helps align cost consistency for the customer, as well as revenue consistency to the MSP,”said, Miguel Lopez, Senior Vice President of MSPs, Kaseya, adding that “There are multiple factors that play into creating and maintaining a consistent, monthly recurring revenue model — which is the ultimate goal for most managed service providers.”
For MSPs just starting down this path, it’s best to do so by creating services around your area of expertise. Focus on what you know how to do best to demonstrate the immediate value you can deliver to your customers, and the natural evolution from there will be add new services – based (on) customer demand and internal capabilities – that will steadily increase MRR,” he added.
High-growth MSPs are at the look out for ways to free resources to offer more services, sell more and upsurge profits. High-growth MSPs typically charge more for their technicians, have a higher variance between what they charge for different levels of technicians, charge more on average for ongoing server support and maintenance per month and have a higher average size monthly managed services contract.
Also, 10 percent of high-growth MSPs charge more than $2,000 per month for cloud monitoring services (assuming VMs, network performance, applications and data-center server) for 25 devices and 2,500 metrics. Just four percent of the lower-growth MSPs charge rates this high.
Lower-growth MSPs are 34 percent more likely than high-growth MSPs to charge the lowest listed rate ($500 or less per month).
The divide between low-growth and high-growth MSPs seems to be increasing. “MSPs, like many other businesses, need to continue to innovate and be entrepreneurial,” opined Lopez. “The primary difference between high-growth MSPs and their lower-growth peers is their vision and ability to invest in their own business.”
For any MSP to succeed, [it] must have the financial and operational discipline to work in the new world where technology is not only seen as important, but strategic, in the eyes of SMB users. SMBs today are more knowledgeable about the importance of IT, and the threat of how poor IT affects their overall business.
So, a successful MSP must position itself to be opportunistic, and identify the right technology investments that will not only meet the needs of their customers, but also help them grow their business. That is the path toward achieving high-growth status.”