A Microsoft Partner's Guide to Managed Services, Part 2: 9 Add-On Opportunities for MSPs

Managed services is a business model more than a set of tools. That said, the use of remote monitoring and management (RMM) externally with customers and professional services automation (PSA) tools internally to run the practice has long served as a widespread and common definition for managed services providers (MSPs).

While running an RMM within customers' environments remains a key predictor of MSP success, much more is required. "Gone are the days of only remote monitoring and patch management," says Stuart Crawford, a long-time MSP who currently consults with MSPs through his firm Ulistic Inc. If RMM is all that an MSP offers, a customer can compare your price against Dell Inc., Crawford says. Another option MSPs must be wary of, according to Bob Godgart, founder of ChannelEyes, is the ad-supported RMM offering from Spiceworks Inc.

"I just don't think MSPs that are focused [only] on RMM and patch management are going to be successful on that going forward," Crawford says.

For MSPs looking to branch out, there's an ever-changing mix of add-on services, technologies and business offerings that they can take to market alongside the RMM to enhance their value to customers.

We spoke to a number of industry experts to get a snapshot of some of the hottest opportunities for adding value for -- and earning more money from -- customers. Some of the add-ons are longtime MSP favorites with a slight twist or two, while others are brand-new.

1. Backup and Recovery
Backup and recovery is an oldie but goodie. Almost as long as IT companies have been calling themselves MSPs, they've been adding backup and recovery to their product portfolios. None of which is to say they've always done it well or that the offerings haven't changed drastically. MSPs selecting backup and recovery have more options now than ever before, with mixes of on-premises, cloud and hosted backup.

One thing that has changed is there's more focus now on "restore" than backup or recovery, driven in large measure by customers' all-too-common experience of having systems backed up and failing to get their data back in cases of disaster. Call it what you will -- disaster recovery or business continuity, Crawford offers one other caution.

"If I was going to be running an MSP again, I would definitely focus on the business continuity play. I probably wouldn't want to align myself with one particular vendor. My biggest concern is where is the liability if the recovery fails? If there's an earthquake and the datacenter is on the same fault line, it's gone, too," Crawford says.

For that reason, backup/recovery may be one of the best cases for acting as a virtual CIO, advising customers on their technology options and helping them select by setting up vendor demonstrations. "I would pick two or three players, and represent them all," Crawford says.

2. Mobile-Device Management
Dave Sobel, director of partner community for LPI Level Platforms Inc., gets really excited about mobile-device management (MDM).

"It intrigues me to no end that no one is talking about it," Sobel says, with only slight exaggeration, about MSPs in general. Like other RMM vendors, Level Platforms offers MDM. "We have mobile-device management as part of the stack. The customers want it. The problem is the solution provider in the middle."

Sobel's theme was the same earlier this year when he provided a 2012 Marching Orders entry for Redmond Channel Partner magazine. At the time, Sobel wrote:

"My big idea is simple: Don't focus on the wrong thing. Cloud computing is getting an amazing amount of buzz, and the channel has focused considerable energy on this opportunity, which looks big. I've heard numbers from $160 billion to $200 billion. Mobility, which is generating less buzz, looks to be an opportunity of $1.2 trillion. By my math, mobility is thus roughly six times larger -- but generating so much less noise. Don't fall for the noise: Focus on what's really important, which is delivering a consistent user experience across any device. That's the real opportunity, and what users are clamoring for."

Sobel says that so far, MSPs don't seem to be paying much more attention now to MDM than they did back in January. He says the situation is the reverse of managed services originally. "This is something end users are asking for. They didn't ask us for managed services," says Sobel, who ran his own MSP for years and spent time convincing small to midsize businesses (SMBs) of the value of the MSP model.

Scott Gode, vice president of product management and marketing for Azaleos, agrees about customer demand. "We're adding mobile-device management to our portfolio of services because we're seeing it being asked for. Every single customer we talk to has got more and more iPhones, Android phones and Windows Phones coming into their environment."

Sobel says the key to MDM sales for MSPs is to focus on the larger numbers. "Talking about configuring one iPhone is not an interesting conversation. Everyone knows how to make their own phone secure. It's when you ask, 'Are you sure your 49 employees are also doing that?' that the discussion becomes compelling."

3. Bundled Consulting
The opportunity to act as a virtual CIO is a business-model decision, somewhat akin to the initial step of becoming an MSP. Whether an IT services company adopts the model wholesale, or chooses to remain in the market as a more traditional MSP, though, there's still an opportunity around packaging up some consulting services.

Crawford is seeing some of his clients add consulting hours to their managed services packages. "They're adding consulting services. Some are adding a few dollars per seat for doing that -- $10, $15, $25 a month depending on the market. Some are charging by the hour."

The consulting services can be a nice revenue add-on for current MSPs, and a way to test the waters for a virtual CIO approach. For the full business model changeover, the branding can vary from virtual CIO to trusted advisor to Crawford's preferred trusted technology consultant. "They help guide the leadership group, and they're selling consulting as an additional service. They're going to a small business, say 25 employees, and taking care of all the IT for $5,000 a month. That includes everything. Help with your ISP, consult on a bi-weekly basis for an hour. They're figuring out ways to provide that higher-level touch."

Next Page: Nos. 4-9

4. Virtual Help Desk
Other MSPs are aligning themselves with virtual help desk services. One client of Crawford's in Canada is leveraging LiveVHD's Service Level Agreement (SLA) of 90 percent of calls answered in 90 seconds or less. "He's taking that SLA and just running with it. Nobody else has the guts to put that type of guarantee out there. First of all, they don't trust the outsourced help desk. Nobody ever calls him on his guarantee, and he never presents it as outsourced."

5. Virtual Desktop Infrastructure
On the more complicated end of MSP opportunities is virtual desktop infrastructure, or VDI.

Azaleos' Gode is seeing interest in the market. "Another opportunity that's emerging is VDI, where customers are looking to utilize Citrix or technologies like that to virtualize the desktop to make those desktops easier to manage," he says.

Gode has an important caveat for VDI. "Our model is we don't talk to the end user, we talk to the IT department. If you're talking to the end user, you're getting more calls, and you're getting more randomized calls like 'Where's the start button?' In a VDI world, there's an interesting dilemma. On the one hand, there's a lot of value that you can offer, but there's a lot of end-user issues that come up with VDI."

It's important to negotiate carefully with the customer (enterprises in Azaleos' case) about which support calls the internal IT department takes versus which ones the MSP takes.

The promise of VDI has outstripped the market share for some time, especially among SMBs, where the infrastructural hurdles to VDI deployment are substantial. However, newer offerings, such as the Citrix VDI-in-a-Box, are starting to cut way down on costs and make the solutions more economical for even very small deployments.

Meanwhile, Microsoft is under pressure from the market to make VDI licensing options for Windows clearer and more affordable. Even for MSPs not ready to jump into VDI now, this is an area to watch.

6. SEO
Many MSPs offer Web site services. Crawford notes that some MSPs are finding success by adding in search engine optimization (SEO) as part of their managed services plans. "There's a lot of margin in that if you can figure out how to do SEO properly," he says.

7. Security
Another standby for MSPs is security services. On top of the patch management that is the foundation of many MSP practices and a critical portion of the base management offering, security offerings commonly carried by MSPs can also extend to the desktop. Bringing antivirus, antispam, message filtering and other endpoint security measures is another way to deliver hands-free IT for customers.

Options for delivering the technology vary from low-tech sneakernet-style deployments of AV software to security bundles from RMM vendors, including freemium options, to reselling dedicated security services from major security vendors.

"If I was going to be running an MSP again, I would definitely focus on the business continuity play."

Stuart Crawford, President, Ulistic

8. Printer/Power Management
Printer management and power management are certainly different disciplines. What they have in common is that MSPs who embrace the model across the stack are starting to cover both printer and power management.

"The most successful guys are the ones that are now taking that managed services approach and taking it to the whole business," says Level Platform's Sobel. "They're covering it all."

9. Cloud Services
Adopting the approach of taking managed services disciplines across the solution stack can help MSPs sell other products.

"The best MSPs are finding that by investing in managed services, they're driving more product sales," Sobel says. N-Able CEO Gavin Garbutt is seeing the same thing (see Part 1 of this series, "Success in a 'Nested Doll' Environment"). N-Able is encouraging its network of MSPs to use its tools to find new add-on services opportunities and project work.

MSPs that adopt the model are finding themselves in a position to help deploy and build services around a number of cloud opportunities. Most prominent among those are Office 365, Dynamics CRM Online, Hosted SharePoint, Hosted Exchange, Hosted Lync and other VoIP solutions.

More from This Series:

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.


  • Silver Pins

    Microsoft Teams Sprawl: What It Is and How Partners Can Fix It

    Microsoft Teams is having its boom period and the remote-work revolution is driving it. But for many organizations, that hasn't been without its downsides.

  • The 2021 Microsoft Product Roadmap

    From Windows 10X to the next generation of Microsoft's application server products, here are the product milestones coming down the pipeline in 2021.

  • Privacy Management for Microsoft 365 Hits 'General Availability'

    Microsoft's Privacy Management for Microsoft 365 hit the "general availability" milestone on Tuesday, according to the company.

  • Notebook

    Sikich Acquires Gold Microsoft Dynamics Partner PA Group USA

    There's some consolidation happening in the Microsoft Dynamics space this week, with Sikich LLP announcing its plan to acquire Dynamics specialist PA Group USA.