The 2017 MSPmentor501 study found a staggering 87 percent of MSPs now offer Office 365 to their clients. This is a dramatic increase from 5 percent in 2016. Given this growth, it’s not surprising that 65 percent of MSPs believe Office 365 is a continued growth area for them.
But, how profitable of an offering is it? For starters, the price point is predominately market driven because SMBs have countless providers to buy Office 365 from, so it’s difficult to demand higher prices to boost margins. Then there is the cost associated with billing and supporting the product. On average, it takes an MSP 30 minutes per client per month to reconcile invoices for its customers. For most MSPs, this is a manual effort, further lowering the margins on Office 365.
So the question becomes, how do I make my Office 365 offering more profitable? One thing we know for certain is that with the mass market adoption seen in recent years, Office 365 isn’t going anywhere anytime soon. In addition, with so many providers selling Office 365, the market dynamics around pricing will not change either. With those variables in mind, the best way to drive better profits with Office 365 is by attacking the labor costs associated with the product.
This is where solutions like Unigma Billing Manager become a critical tool in the effort to increase margins through automation. Unigma from Kaseya has three distinct modules that enable you to:
- Monitor and manage public cloud infrastructure
- Analyze and optimize costs associated with public cloud infrastructure
- Automate billing of Office 365 and Azure
With Office 365 playing such a dominant role in the MSP portfolio, it’s smart to start there. Unigma Billing Manager completely eliminates the manual reconciliation behind an MSP’s Office 365 practice and integrates with your PSA tool for automated, recurring billing that can save you tens of thousands of dollars in labor hours. When you combine the labor savings with the average cost of $5/per client/month for Unigma Billing Manager, you can add significant margin dollars back into your business.
If your MSP has a portfolio of Office 365 clients and you anticipate that pool of clients increasing without an automated billing product, then you’re essentially looking at more back-office headaches and lower margins on a growing business.
If you’re interested in a better way, check out our webinar, “5 Steps to Optimize and Expand Your Cloud Offerings,” to learn more.
This blog was originally posted on MSPMentor.
