In conjunction with April’s State of the Industry report on managed IT, we saved a few nuggets of wisdom from our panel of top dealers in this space, who were gracious enough to share their insights on constructing the ideal platform. Our print article had an overview of the obstacles to profitability, along with a set of best practices these leaders recommend for gaining traction.
In this installment, our trio of experts—Patrick Layton, vice president, managed IT services for Impact Networking of Lake Forest, Illinois; Casey Lowery, chief operating officer for Applied Imaging of Grand Rapids, Michigan; and Trevor Akervik, COO for Marco of St. Cloud, Minnesota—were asked the following question:
For a small- to mid-sized dealer addressing the SMB space, what do you feel are the necessary elements of an effective offering (security, cloud, phone, project management, etc.)? Do you advocate beginning with base elements before expanding?
Lowery: I would advocate having a very limited base offering and going out and getting a customer base, then bolting on additional offerings. Going too wide too quickly can get you into trouble because you are trying to do too much and then you don’t do anything well.
Recurring revenue leads to a lot of the many offerings. If you have a customer under contract, it’s going to be easy for you to sell them hardware and be able to bolt on additional services. That’s a very good place to start, with the help desk on site—a true MSP offering. As our group has matured more, there are so many places where things like fiber or telephony, you can partner with someone in the industry where you actually don’t have to have people doing the work, where you can start to benefit from having some of those things under contract. There are cameras and security, so many bolt-ons where you don’t have to have the expertise. You just need to find the partnerships to help make it happen.
Akervik: If you were running a factory, it makes sense to perfect one assembly line before adding other lines and other products. When it comes to managed IT, you should similarly become proficient in one area; for example, providing a help desk, before adding others. Once this service is running as smoothly as a fine-tuned assembly line, you can add another component, like basic infrastructure, data center or cybersecurity.
Layton: If you’re building it or partnering, and just getting started, you should focus on the “s” in SMB, because it will be a little easier. But the money conversation is harder. You have to have a good RMM and someone to manage it so that you can do the basics, like remote control, and provide some level of proactive service. You need a good BDR partner, especially if you’re playing in the “s” space because you’re probably still dealing with a lot of on-prem. You probably need someone from a business and applications side to be a part of that team, because if you’re going to start taking businesses to the cloud, you have to understand that business effect. Lift and shift to the cloud is what we were doing 10 years ago. Now if you’re moving to the cloud, it’s got to be strategic. It’s understanding how to utilize the cloud to get that business—and the way they operate—value out of it. Don’t stop at “let’s get rid of some hardware that might fail.” You want to go a little further than that.
A couple of good partnerships are important; you need a good CSP partner. We partnered with Ingram for a long time and now we’re our own CSP. But having a good partner that can help you understand that licensing model is important. You also need some level one, two and three techs. Once you can do that, then the conversation turns to the ancillary offerings like partnering with a master agency to offer voice-over IP services or hiring a modern workplace guy who can really get into Teams or Slack and bring value to clients through the collaboration channel. You can help businesses that have Quickbooks and are growing and figuring out how to get into a dynamic for a NetSuite and that application mindset. But you have to be able to do the basic up/down and end-user support at a high level before moving forward. I see small MSPs that have all these partnerships and no one managing them, so all of their service ends up being mediocre, even if they’re all pulling in the same direction and they have really good staff. They’re just not organized right. They’re not managing it in chunks, and everything becomes half-done. Then they keep expanding instead of getting a couple of things all the way done. That’s the biggest mistake I see, and I’ve certainly made those mistakes in the past as well.
