Any conversation involving managed IT generally centers on the 8,000-pound gorilla in the room: security. Last summer, more than 143 million U.S. consumers saw their personal information (social security numbers, birth dates, addresses, etc.) exposed in the Equifax breach. And 2018 was ushered in with the revelation of the Meltdown and Spectre vulnerabilities that tapped into most mainstream processors to expose user information.
We’ve tapped a security expert, Datto’s own Henry Washburn, who penned a must-read companion piece on the nuances of platform security as a deep dive on the subject. For our purposes here, we’ve canvassed a number of larger office technology dealers, managed IT specialists and turnkey platform providers to explore the vast opportunities that still exist to provide guidance, measurement and service to the network galaxies of their customer base.
Greg VanDeWalker,
Collabrance/GreatAmerica Financial Services
Yes, the office technology channel has heard the incessant beating of this drum before, yet statistics bear out that this sector of managed services remains one of the most untapped sources for adding net-new business. Greg VanDeWalker, senior vice president of IT Channel and Services for Collabrance and GreatAmerica Financial Services, notes a Computer Economics study from 2016 analyzing the print and IT spends for customers revealed 98 percent is ticketed toward IT and only 2 percent for print.
The managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer’s network.
Greg VanDeWalker, Collabrance/GreatAmerica Financial Services
Controlling the Network
Indeed, the window of managed IT opportunity appears to be getting wider, thanks in no small degree to the networking growth offered by the Internet of Things (IoT), according to VanDeWalker.
“If you’re a managed IT organization currently handling the obvious IT infrastructure—desktops, servers, firewalls, BDR—eventually you’re going to have an opportunity to start layering in other things connected to the customer’s network, and potentially charge for monitoring and managing some of those high-yield devices,” he said. “The managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer’s network.”
Michael Amiri,
Continuum
As technology becomes more complex, companies are more reliant on vendors and resources beyond their own four walls to help them manage and support their network needs, according to Michael Amiri, senior director of Dealer Services at Continuum. From a dealer’s perspective, the financial gains offered through managed IT greatly outpace a dealer’s core deliverables.
As dealers can reap net margins upwards of 35 percent, Amiri feels it is imperative for dealers to avail themselves of this lucrative growth platform. “Dealers have to adapt to what the marketplace is asking of their office technology vendors,” he said. “A one-stop-shop approach to managing an entire network is key to becoming more relevant to the everyday end client.”
A dealer that has a fixed-fee IT labor partner that achieves scale can drastically decrease labor costs and ensure an elastic set of resources that always meets the challenges of increasing resource needs as the numbers of users supported grows over time.
Michael Amiri, Continuum
Internal Source Overload
Perhaps the greatest target range for scaling managed IT lies within the SMB sector. Bob Maxwell, owner of South Charleston, WV-based KOMAX Business Systems, notes that many SMBs rely on a single person in-house or an external staff to navigate its IT department, yet can outgrow their resources in short order. This can result in system down time and a loss in productivity.
It is not uncommon for businesses to unwittingly find themselves in need of a major overhaul when it comes to hardware or software. Whether they’re unaware or ill equipped to handle the needs, or lack the information necessary to make an informed decision, it creates an opening for dealers to perform a thorough analysis and execute a game plan that can lock in a client for the long haul.
“This puts KOMAX in a perfect position to offer our expertise with IT and managed services,” Maxwell said. “Our goal has always been to offer the best product and service supported by the best people—our employees.”
The demand for convenience and efficiency is driving the opportunities presented by managed IT, according to Kia Robinson, managed services sales manager for New York City-based Atlantic, Tomorrow’s Office. This challenges service providers to remain at the fore of trends and learn how new services can enhance the client experience.
“The potential is limitless,” Robinson said. “Our goal is to help them utilize technology to expand their business, improve employee productivity and remain competitive within their respective industries. As long as a technological mind remains challenged to expand its creativity into the unknown, there will always be an opportunity for growth.”
Chris Falzett,
Topp Business Solutions
Market saturation is one factor that can temper enthusiasm. But Chris Falzett, president of Scranton, PA-based Topp Business Solutions and its Topp IT Services division, notes his dealership has gained organic traction with the value-added service. He finds having the IT technical staff an added bonus for handling the solutions support required on the copier side of the business.
“We have been in the IT business for decades within the health care vertical, providing digital dictation, speech recognition and coding solutions, so expanding our team to provide down-the-street IT services was a natural transition,” Falzett said. “I do feel if your company isn’t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren’t a ‘me, too’ copier company and that your team has true depth. Having the ability to be a partner and not just a vendor is a good thing.”
I do feel if your company isn’t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren’t a ‘me, too’ copier company and that your team has true depth.
Chris Falzett, Topp Business Solutions
Paths to Profitability
Jim George,
Donnellon McCarthy Enterprises
Some dealerships predict an unlimited ceiling for managed IT to account for a lion’s share of its business, and Donnellon McCarthy Enterprises (DME) of Cincinnati is among them. DME President Jim George projects his managed network services business will account for more than 50 percent of overall business during the next five years.
One of the keys to profitability, according to George, is the continued cohesiveness that exists between the sales ranks and the MNS technical staff. He feels the account managers are the quarterbacks for their respective clients and it is incumbent upon them to drive MNS activity within those accounts.
“The collusion of both sales and MNS teams is where the magic is,” George said. “We try to avoid hardware-only sales. We are looking for long-term partnerships that are valuable to both sides.
“We have a quarterly review process that allows the account manager to identify a MNS opportunity. Once identified and qualified, the rep will bring in a subject matter expert that will assist with the solution.”
The collusion of both sales and MNS teams is where the magic is. We try to avoid hardware-only sales. We are looking for long-term partnerships that are valuable to both sides.
Jim George, Donnellon McCarthy Enterprises
Calvin Wanner,
All Copy-Verticomm
One of the primary staples in the quest for profitability lies in having a true understanding of how to maximize efficiencies, according to Calvin Wanner, the sales manager for Verticomm, the IT division for Denver-based All Copy Products. “People and employees are your product,” he said. “The better an MNS company can understand and satisfy the needs of a client, the greater the potential for revenue and profitability.”
People and employees are your product. The better an MNS company can understand and satisfy the needs of a client, the greater the potential for revenue and profitability.
Calvin Wanner, All Copy-Verticomm
Striking a proper pricing balance commensurate with services goes a long way toward keeping clients and adding to your bottom line, KOMAX’s Maxwell observes. He has seen cases where short-sighted MSPs lose money over the long term by underpricing services in order to close the deal. KOMAX relies on All Covered to ensure proper market pricing for services, hardware and software. When the dealer sells projects through All Covered, it works with project managers to ensure everyone involved fully understands what is expected during and at the completion of the project.
“This allows us to provide an accurate statement of work with pricing to the client,” Maxwell said. “The pricing is always clear and we know exactly what we need to charge for all services before we sell them. When possible, KOMAX staff will implement part or all of a project. This helps increase margins and keep our staff sharp on all technologies.”
Employee Competencies
Continuum’s Amiri is a firm believer in the notion that how a dealer acquires its labor force is the most critical factor in determining profitability. IT labor has the dual-edge sword of being difficult to find and costly to maintain, yet it is the best avenue toward delivering high-quality customer support.
“A dealer that has a fixed-fee IT labor partner that achieves scale can drastically decrease labor costs and ensure an elastic set of resources that always meets the challenges of increasing resource needs as the numbers of users supported grows over time,” Amiri said.
Unlike the copier side of the business, VanDeWalker cautions that not every customer is an ideal fit for managed IT services. The managed service providers have a firm grasp on their ideal customer profile and tend not to deviate into businesses who are markedly bigger or smaller than the target range. It can be tough for dealers to stick to their guns, but given the complexity of IT, it behooves dealers to remain disciplined.
Standardization is another area VanDeWalker sees as being critical to driving managed IT profits, as deviating from a standard technology stack can be problematic for several reasons. “You can’t become proficient with all the different types of technologies out there,” he said. “Having a standard stack of technology that you’re skillful at and getting your end users to adopt it is key. Some dealers take an approach where no matter what is in that customer environment, they bring it on. These dealers end up with a very noisy service desk with service tickets that take too long to resolve because it’s an older technology or an unfamiliar one. This can result in a frustrating experience for customers. In this case, you’re just burning money and resources in a very inefficient way. The more you can have your customers standardized on the same BDR, firewall and email platform, the ability to solve issues before they happen drastically increases. If there is an issue, it’s probably something you’ve seen dozens of times before and can now provide a faster resolution to help your customers.”
Kia Robinson,
Atlantic Tomorrow’s Office
Robinson of Atlantic, Tomorrow’s Office outlined four critical steps to attaining profitability: investing in people, empowering them, exercising extreme ownership and creating an infectious environment that is obsessed with excellence. Taken as a whole, these four areas can ensure a dealership’s team is tending to client needs and using good business judgment without compromising customer service.
“Our entire team feels that they have contributed to the growth of the division,” she said. “Shared success creates a win-win culture, not win-loss.”
Our entire team feels that they have contributed to the growth of the division. Shared success creates a win-win culture, not win-loss.
Kia Robinson, Atlantic Tomorrow’s Office
Gateways to Success
Every victorious marathon runner emerges from a race with his/her share of blisters, and it is also true of the office dealer world that for every successful win in the MSP space, there are bumps and bruises that were accumulated along the way. One of the keys to Topp’s success has been maintaining realistic expectation. Just because a dealer has managed to penetrate an account with copier business isn’t an automatic given that a managed IT contract is a fait accompli. Falzett notes his company has been able to leverage its strengths in hardware and document management in generating growth for the IT division. When customers realize a dealer like Topp has such wide-ranging value, it precludes the need to be the lowest-cost provider.
Bob Maxwell,
KOMAX
From a lessons learned perspective, creating balance within the IT staff is critical to providing a strong solution. “I learned quickly from our leadership team that your IT services division is like a basketball team, and having all point guards or all centers doesn’t work,” Falzett said. “You need to strike a healthy balance of skill sets and then begin the internal cross-training from there. Have a true team with complementing skills that works together and gets your entry level technicians proficient in a hurry.”
Periodically discussing our offerings with potential clients—and especially current clients—is key.
Bob Maxwell, KOMAX
Verticomm’s Wanner believes much of his division’s success can be traced back to following processes and procedures. “There is always a moving target and a new product,” he said. “In order to continue to be successful, one must be current on technology, security, the cloud, etc., while not jeopardizing the client experience.”
In the eyes of KOMAX’s Maxwell, the road to success begins with a carefully cultivated IT team of experienced professionals who understand the complexities of dealing with a varied customer core with unique needs, environments and personalities. KOMAX’s staff boasts a bevy of veterans with more than 15 years of IT experience under their belts, and 10-plus years in the managed IT environment.
Getting the word out regarding your dealership’s IT competencies can be an overlooked aspect. Too often, Maxwell has heard the phrase “you do that?” from clients who assumed the dealership only trafficked in printers and copiers.
“Some businesses will not be ready for managed IT or switching providers,” he said. “Periodically discussing our offerings with potential clients—and especially current clients—is key. When they are ready to start or are in need of a change in IT services, we want them to think of KOMAX.”
