Even if your growth ambitions are modest, you can’t ignore scalability. The market for managed services is ballooning, and so too is the number of managed service providers. Technology is evolving and workloads are becoming more complex. All the while, other MSPs are trying to lure your clients away.
If you hope to survive and thrive, you’ll need to find ways to improve your operational efficiency and retain profitability. That means shifting away from the patchwork solution stack that most MSPs find themselves building over time, and adopting a more deliberate approach. Here’s why:
What challenges are MSPs facing?
It’s no secret that there are more vectors for vulnerability than ever before — especially in the wake of the COVID-19 pandemic and the trend towards remote work that followed. Cybercrime has spiked, and MSPs face tremendous pressure to keep their clients protected.
Today’s MSPs are responsible for safeguarding more workloads and more devices than ever before. Advanced threats are pushing security infrastructure to its limits, compounded by increasingly exposed perimeters in a work of remote work (sometimes with BYOB policies). And a serious shortage of security talent is making it difficult for most MSPs to effectively implement solutions that could help to counter these challenges.
To top it all off, the manual effort involved in supplying effective protection is trending higher, with many MSPs adopting a patchwork of solutions that don’t work smoothly together. This makes it very difficult to secure entire workloads, and to identify protection gaps when they inevitably pop up. As much as 69% of security professionals spend more time managing their tools than they do managing threats.
We’ll focus in on this tool sprawl as perhaps the biggest obstacle to vendor scalability today.
How should MSPs change their approach?
With this glut of services, tools and needs may be mismatched — and the responsibility for carrying all of these solutions falls on your team. This kind of vendor sprawl, which saps your internal resources, is called “endpoint bloat.”
Most MSPs cobble together an assortment of disparate security solutions to create holistic, multi-faceted offerings that they hope will meet their customers’ data protection needs. In practical terms, they build jigsaw puzzles — pieces that fit together — but with visible imperfections and no integration and automation between the solutions.
Unified service delivery platforms are an ideal alternative. With this approach, MSPs can choose which services to turn on and off, depending on their own needs and those of their customers. Rest easy knowing that each service is designed specifically to work smoothly with the others. Your team needs learn only one product interface, and endpoints need run only one agent. And by managing everything through a single pane of glass, you’ll drive higher operational efficiency across your organization.
Smarter and simpler pricing through bundles
With typical per-device or per-user pricing models, you’re presenting clients with a simple “yes” or “no” decision. Instead, consider offering a small set (three is the magic number) of service options. This reframes the decision from “should I or shouldn’t I?” into “which one of these options works best for my company?” — the idea that they’ll be purchasing something becomes almost a given.
A unified service delivery platform has the advantage of making bundles easily designed and assembled. Also known as SLA-based pricing, this model enables different levels of service based on clients’ needs — no need for either party to pay for solutions they’ll never use.
Tier selection tends to map to the business scale of your clients; design service packages with this in mind:
- Lowest tier: Startup businesses with less than $1 million in annual recurring revenue (ARR)
- Middle tier: Rapid growth businesses with $1–$10 million in ARR
- High tier: Enterprise businesses with $10+ million in ARR
Think of your tiers as “good, better and best.” Even the most basic service package should include everything a small client needs to secure their data and their livelihood. That means cybersecurity should be a baseline part of your offering.
As your customers grow, so should the services you deliver them
For many organizations, acquiring new customers is seen as the key driver for business expansion. But that’s not necessarily true if you’re using a subscription model.
Upselling services is how growing MSPs can hack their “churn rate” — the turnover between new customers coming on and older ones leaving (perhaps because they feel their needs have outgrown what you offer). By pitching an existing customer on a higher service tier when the time is right, you can more easily retain them and eliminate the financial pressure on your own organization to replace them.
It’s significantly more expensive to acquire new clients than it is to offer expanded services to your existing ones. Be sure to clearly define the benefits of each service tier you offer, so that you’re prepared to appeal to those customers who may be thinking of moving on.
Your path to profitability
A unified service delivery platform — like Acronis Cyber Protect Cloud — gives MSPs a clear way to reduce the overall complexity of clients’ deployments. This approach simplifies solution management, makes upselling a breeze, and improves your own security posture to boot.
For a deeper look at how MSPs can leverage a complete cyber protection delivery platform to optimize productivity and profitability, check out this free ebook from Acronis: Pricing, packaging, and margins: How MSPs can solve for profit.
This guest blog is courtesy of Acronis. Read more Acronis guest blogs here. Regularly contributed guest blogs are part of ChannelE2E’s sponsorship program.
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