Back in 2006, VAR Business suggested “98 Percent of Managed Services Is Chaotic.” At that time, they painted a bleak picture of the common pitfalls that break-fix VARs and other IT solution providers encountered as they attempted to transition to a managed services business model.
In the 2006 VAR Business report, they found that 31% of the companies surveyed felt that their managed service efforts had fallen short of their expectations and only 11% said that managed services had exceeded expectations.
My how far we’ve come.
In a recent Kaseya survey of nearly 2,000 MSP customers worldwide, we found that upwards of 85% generate recurring revenue for 12 months per year. More than 50% improved the profitability and productivity of their technicians by 100% within 90 days of completing an onboarding process. Their average client retention rate was high (very high).
The findings are compelling.
Yet, why are many companies still reluctant to enter the managed services market? Why do some still experience such disappointing results?
Why do some writers even suggest it’s not worth the risk of entry?
While some of the disappointment associated with managed services may be due to companies approaching this business with unrealistic expectations, we typically find many of the challenges of the managed services business can be overcome by clearly understanding the full responsibilities of a MSP and putting the right pieces in place to meet these requirements.
Many aspiring MSPs make the mistake of equating remote monitoring with managed services. Having the ability to remotely monitor customers’ IT systems is just the first step toward providing managed services. What you do AFTER you get an alert – and HOW you do it – is the key to your MSP success. If you are able to be proactive and automate some of the routine IT support responses, you’ll be an MSP winner in so many ways.
But as our customer surveys show, the transition process from VAR to MSP doesn’t happen overnight. It’s not “easy” either. But if it were easy, anyone could do it and no one would get paid for doing it.
Instead, it takes time to transform a traditional IT solutions business that is product-centric and “break/fix” oriented into a proactive, management-oriented business. It can be a positive and profitable transformation process if the IT solution provider takes the right steps to achieve success. And, with cost-effective, robust, and scalable management platforms, such as the new line of Kaseya Foundation products, it doesn’t require significant upfront technology investments in order to deliver high quality managed services.
The key to MSP success for a VAR, though, is to get started. Register to attend a Kaseya product demonstration today. You won’t be disappointed.