Why MSP IT Maturity Matters in Platform Choice

MSP, MSP Tips
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MSPs don’t just materialize out of thin air. There is always a reason they get into the business and a vision that drives them. For some, it’s a way of turning a hobby into a way of making money, while others are driven by a bigger purpose. When you think about it, MSPs and the businesses they support are no different than people. They all have a unique identity, personality, strengths, pain points, and needs.

This variety makes a big difference, often a very important one, in terms of ideal customers, targeted verticals, growth strategy and the solutions they require to achieve that growth. As a service provider, to outline the right strategy, you must know where you stand to get where you want to be.

What Kind of MSP are you?

Although all MSPs operate on the Holy Grail of an integrated PSA-RMM Solution, not all MSPs operate the same way. They serve a different audience and a different purpose, which explains why every MSPs needs something different from an integrated PSA-RMM solution. With that said, we took the liberty to identify three main types of MSPs and examined why maturity plays the most crucial element when it comes to picking a solution. Read on to find out which tier you fall in and what kind of MSP you are:

Tier 3: The We Fix IT MSP

We Fix IT MSPs have revenue up to $1 million. They have 1 to 5 employees. They manage 25 to 500 endpoints, and service 1 to 10 small business customers with unsophisticated networks.

Tier 2: The Alpha Tech MSP

Revenue among Alpha Techs ranges from $1.5 million to $5 million, with some recording slightly higher sales. On average there are 500 to 2,500 endpoints. Staff extends beyond techs and includes sales, back office, and project management.

Tier 1: The Premier Technology Services Provider

Premier Technology Services have robust revenue of $5 million to $20 million. They are a business that provides technology services, as opposed to being a technology provider that is a business.

Why Maturity Matters?

When it comes to maturity, one size doesn’t fit all. Blindly adding tools to your arsenal only leads to an application management overhead. As an MSP you need to figure out if your strength lies where your business needs it to be, What needs to be done to fill the gap and where does the bottleneck lie?

For instance, the We Fix IT MSPs compete mostly on bread and butter services by making themselves price competitive. They can thrive on an entry level PSA-RMM solution. Majority of business needs can be sufficed with automated patching, integrated security and backup, basic reporting and alerting, coupled with ease of use. While they may offer services on contract, the bulk of its revenue comes from reactionary business (break-fix or project). It makes more sense for them to find success by acquiring a few midsize clients on contract that require service-levels, and then investing in process maturity, as minimizing time/work is the first way to maximize margin.

Compare that to an Alpha Tech MSP who is more seasoned with their business practices and has higher-level needs than We Fix IT shops. They manage more endpoints, ticketing needs are much more sophisticated and having an internal remote support desk is absolutely critical. They need to be on their feet all the time and need PSA-RMM solutions that are predictive and proactive. Most Alpha Techs position themselves as having a “secret sauce” or unique and differentiated services. This enables them to hold price and gain margin. Even though growth is typically organic, MSPs that can demonstrate their secret sauce or platform, adds significant value and are attractive candidates for a merger and acquisition.

Premier Technology Services take it a notch higher. Although they rely on the functionality that We Fix IT and Alpha Techs do, their needs are more specific and the sheer size makes time-saving the most critical element. With an army of engineers, saving just 15 minutes per engineer, per day can translate into immense savings. They need a PSA-RMM platform that has rock solid integration capabilities and can feed this time critical environment by creating efficiencies within the alerting and service desk operation. These MSPs have good technical solutions and a growth-driven mindset. Looking at other geographies for new business, or buying up smaller providers to fuel growth seem like a better idea for adding more value to the business.

Bottom Line

MSPs that are early in their development walk a tightrope. While they should not over-purchase, they do need to set the tone so they can scale as the business grows. This means purchasing smart solutions at the right time. Let your revenue range be your guide to what is most important in a PSA-RMM stack. Features and functions sound cool, but why lock yourself into functionality that will likely be more advanced by the time you actually need it?

Solve today’s problems, get quick price-to-value (ROI), but ensure you have some headroom to grow, without over assuming. if you do not anticipate needing a function in the next 12 months, do not invest in it.

To know more about where you stand and what strategies are best suited to propel you towards the right trajectory of growth, download our RMM+PSA Buyers Guide, here.

 

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