MSP View

So You Want To Be an MSP...

Sure, you can dive right on into managed services, but you'll be doing your company a favor if you tread carefully and review your business plan to fit your new goals.

• By Charles Weaver
• June 01, 2006

Managed services is everywhere today. The thirst for recurring revenue, better margins and happier clients has never been greater. In the midst of all this hoopla, there's never been a better time for a healthy dose of reality when it comes to understanding what managed services is all about.

Managed services is more than collecting recurring revenue from a client each month. It's about changing the way clients consume IT services as well as how service providers deliver them. Following a few critical steps will help ensure that you start your career as a managed services provider (MSP) on the right foot:

1. Realize that becoming an MSP is a business-changing decision. Unlike choosing which brand of firewall or server your company will sell and support, becoming an MSP involves a complete transformation of your company and how you deliver your services. Far too often, companies have casually made the choice to switch to this business model only to meet disastrous ends that could have been avoided had they simply taken the decision a little more seriously.

2. Recognize that simply purchasing the right products doesn't make your company an MSP. While there are plenty of well-made hammers, buying one wouldn't make you a carpenter. It takes time, education and continued practice to make someone a professional in any field. Today's MSP environment places far too much importance on the tools—and not enough on the skills of the people and companies wielding those tools.

The true test of whether you are an MSP should be when you make money.

3. Start with a solid business plan. Before you even begin shopping for MSP-enabling tools, you should have a very clear idea of what your objectives are. That means having an up-to-date business plan. Many companies that switch from break/fix IT services into managed services do so without developing such a blueprint to guide them. It's essential that you understand from the start exactly what types of services you'll offer so that you can assemble the right tools for delivering them. Otherwise, you'll end up with a business plan dictated by the type of tool that you bought.

4. Understand what really makes an MSP. The true test of whether you are an MSP should be when you make money. An MSP makes money when clients' networks are up and running. A break/fix company, on the other hand, makes money when clients' networks aren't functioning. Remote monitoring, recurring revenue and other MSP hallmarks are just the byproducts of an efficiently run MSP business. The real measure of an MSP is how efficient it is and how much it can scale.

5. Strive for continuous improvement. Finally, focus on continuous improvement. Managed services is a profession. An important element of being successful in any field is striving to better yourself in the practice of your craft. But that doesn't necessarily mean investing in expensive instruction. Currently, there's a huge industry of consultants who have developed overnight methods and programs for getting into managed services. Be cautious about seeking expert help. I believe that the best place for an MSP to get help is from other MSPs. After all, who better to consult than a peer who has been in your shoes?

Today's MSPs face increasingly complex issues on behalf of their clients. Regulatory compliance, data privacy and security are just a few of the challenges MSPs deal with daily. Still, if done correctly, being an MSP can be a lucrative and rewarding business model. By taking a thoughtful approach, you'll infinitely increase your chances for success.