The Managed Services Provider Blog

November 2, 2012  1:46 PM

Managed Service is not break/fix in a can

mspprophet Darren James Profile: mspprophet

I don’t want to sound like a harsh critic on how people do business, but switching from break/fix to managed services by going flat rate without changing how you provide service will only fail. The idea that you can “wait til` it breaks” and expect to make a profit is silly. Not only will you spend more money than you charge, you will end up with clients that are still not really happy with the results.

Networks that are under a break/fix contract are on average up 85% of the time. Managed service networks are up 96% of the time. The difference in the two is about 60% less support needed for a managed network. Proactive tasks and correct configuration are the keys to implementing a solid Managed service network. Support staffing should be around 1 technician per 250 – 300 seats, more if you are really good at network configuration and change management.

I see a lot of managed service providers cap their risk by placing exclusions or limits in their agreements. I am not opposed to this and in some cases a hybrid agreement that has basic support covered with “adds, moves, changes” being on a discounted hourly rate can work as well. What is not good for business, is to continue operating as a break/fix shop and not make the changes in processes, people and technology necessary to become a real managed service provider.


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August 2, 2012  8:57 PM

Should Dell buy Connectwise?

mspprophet Darren James Profile: mspprophet

I’m not sure Dell should buy a PSA company. I think Dell has enough internal systems that work so well, they could package some of it in a web front end and host a complete IT support ERP system. Most PSA software companies only cover some portion of the whole business process. Connectwise for instance is very strong in ticketing and time, but falls short in financials. Other PSA’s just aren’t that deep and drop off when it comes to being a complete ERP.

So if Dell wanted to get into the PSA market, why not blow everyone away and offer a complete ERP that scales great. I personally would love to see an ERP out of the box for MSP’s. After working in the field for 7 years, I can attest to the lack of shelf items for complete processes for the MSP model.

Automation is a big key these days. RMM software has been attempting to add automation. Some PSA’s have tried, but I am still waiting for a holistic approach where the reach is complete from end to end. I really wish the channel vendors would stop the half hearted attempts to solve the MSP owners pain points and succeed in providing a new platform.

What we all want is a complete end to end package of even 50% of our day to day processes. So if Dell wants to provide PSA slash ERP to the market, please please please, make it something worth celebrating!

I can be reached at


July 24, 2012  2:07 PM

The new managed service provider

mspprophet Darren James Profile: mspprophet

The economy has shaken our country to its core. More jobs were lost that will never come back. So as the country re-shapes itself, businesses are also reforming and transforming the business landscape. Part of this reformation is how technology is deployed, managed and maintained.

The new managed service provider has to expand and reform themselves if they are going to profit in the new age. Part of this transition is adding mobility and more bang for the buck. More flexibility in the data spaces and much better availability are also keys to our growth. If we can re-shape and re-engineer what technology comes out, we have opportunities to reform the way IT is done.

One major growth area is in the medium size businesses that have traditionally been an onsite scenario. With the cloud offerings maturing, we see the possibility of hosting line of business apps that have not been an option before. The explosion of personal devices also adds to the push of anytime, anywhere accessibility needs which clouds can contribute to. Ultimately it is our creativity and position as trusted advisor that will propel the MSP into the next wave of success.

Of all the business ventures and industries I have had the pleasure of working in, it is the managed service provider arena that has given me the most satisfaction. Putting business and technology together into a fine running machine is what it’s all about.

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July 16, 2012  11:59 AM

Eliminate your help desk!

mspprophet Darren James Profile: mspprophet

If you are the average IT support company, you probably have some sort of help desk. Maybe you are virtual where the staff takes turns manning the main phone number. Or you have an office with a few level 1 people sitting answering phones. Either way, if you truly want to be a profitable MS shop you need to work toward dumping your help desk.

Yes, dump the help desk. If you are doing it right, 90% of your workload should be maintenance tasks. Every environment you have should be running like a Singer sewing machine. If you have figured out how much of your revenue you can spend before going in the red, then you are aware of the fact that even a few minor issues occurring can wipe out the bank account.

Of course I’ve seen some firms try to hedge their bets by reducing the risk with contract exceptions. This can be a good thing if you can sell it. I have found that hybrid contracts with a mix of flat rate and catastrophic clauses can work, but you must be selling win/win even still. The true managed service shop will have the talent and ability to live up to and profit in a flat rate world.

Bottom line is you should not be having support calls to the extent you did as a break/fix. I got up to 1 engineer per 300 workstations. I started with level 1 people but soon found that 1 good engineer could solve (correctly), the same amount of issues 3 level 1 people could handle. It’s a whole different mindset and you must wrap your business model around it.

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July 10, 2012  10:17 AM

Managed Service Site Planning

mspprophet Darren James Profile: mspprophet

Whether the client is a 10 person law office or a 40 person call center, you have to develop a maintenance plan for their environment. That plan must be centered on complete reduction of problems. You can decide not to and hope for the best, but I have never seen this be profitable. Small problems will eat your margin up in one day if you are not diligent.

The best way to create a plan is to use your experience in support. I bet you can come up with the top 10 issues that plague a help desk. If not I will give you a clue. 80% of problems with small networks come from DNS and permissions. Those two items will doom you if they are not addressed. Some of you may not agree and like I said, everyone has their own experience and you should draw from that.

Simple things like a network printer with DHCP on will cost you. A shared folder off someone’s pc will drop out the minute a patch is installed and the pc resets its firewall. So you can see that it is all the band-aid, quick-fix items that you must eliminate in order to manage their environment.

Don’t be afraid to tell the client some things must be replaced or changed before you take them on. Getting the client ready from a standards point of view is a critical part of your on boarding. When you pay attention to the details, the details will pay you, in cash!

July 6, 2012  12:26 PM

How to succeed playing in the MSP space

mspprophet Darren James Profile: mspprophet

When it comes to the bottom line, nothing will bring you back to reality like managed services. Being a break/fix engineering based business has its advantages, in you’re your largest expense is labor and you almost directly bill that cost out. Moving to managed services removes that equation.

All of a sudden you are faced with a payroll that can’t be billed out directly anymore and you have to re-design your accounting fast. But there is hope at the end of the tunnel. All you need to do to profit from managed services is understand what eats up your money and then stop that from happening. So easy said, a little hard to do.

Its bad IT that eats your time. That bad IT can come from within, it can come from without. The first place to start is within. How are you solving issues? How are you doing the work of IT? What worked for break/fix doesn’t work for managed services. No more band-aid repairs. You must find the root cause of problems and nip them in the bud. You should also be proactive and start going through all clients environments and tweaking them.

Bad IT from outside is lousy internet providers, bad copier contracts and cheap toner suppliers. There are more, I’m sure you can list them. If you really hold the mission statement of “best in class” support for your clients and follow through, you will make money and succeed at being an MSP. In the end, the clients will win and when they win, you win!

I can be reached at

June 18, 2012  3:44 PM

Why people fail at managed services

mspprophet Darren James Profile: mspprophet

Even seasoned IT people can fail at managed services. Why is that? Because managed services is exactly what its name implies, managing the environment. Not everyone who is good at solving technology is good at managing it in an economical manner. I personally was really good at diagnosis but horrible at documentation. When I started my company the first person I hired was an awesome office manager who could keep me in line.

So where are the biggest failure points? The help desk is number one. If you are charging $30 a workstation and you have 1 tech per 100 users you are going broke. You must manage your environments to 300 users per tech or more, or charge $100 per user. Whatever your business model is and whomever your target customer is will decide some of these things. The key to not failing here is fanatical attention to the networks you are managing to minimize the problems and hence reduce support needs.

Not being proactive is failure number two. You will spend 3 times more time fixing an issue than you will preventing it. Taking over an environment should have an on-boarding process that sets the stage for managed services. You should request all your upgrades and changes from the new client right up front and not be afraid to tell the client you cannot support aged technology and it would cost less to update in the long run.

There are other areas that will drain your accounts but I think those two if done properly, will at least give you a chance at success. If you’re one of those people that have a plan to charge $200 per workstation a month then you won’t need any of this advice. Of course I would like to work for you too, since you’ll have plenty of cash around!

I can be reached at

June 14, 2012  9:06 AM

Out of Control Clients

mspprophet Darren James Profile: mspprophet

You know the one’s. They were a tough negotiator in the sales process and now they call for the simplest thing, jamming up the help desk every morning at 8am. You would like to just dump them at this point, but you need the cash flow. So what if anything can be done to save this relationship?

Well that is exactly what the problem is, a relationship problem. Somewhere along the line, both of you did not express what was the reality of who you are. Perhaps the client did not tell you that they are a group of extremely picky people who don’t listen. Maybe you forgot to tell them that you make money by them not calling, either way there is a disconnect in the relationship.

Can this be saved? YES! And maybe no. Part of managed service best practice, are tools that might just solve this dilemma. Find out what their pain points are and develop a plan to address those head on. Most clients don’t want to spend all day on the phone with support. Your clients would be very happy if they didn’t have to call you. So maybe what is happening with this client is that YOU have taken your eye off of what their pain is or was and got distracted by focusing on the bad parts of what is happening between you.

Every business relationship has some basic needs that need to be met for them to work. Find out what YOU need to do, and make some changes. It’s easier to fix a broken client then to replace them, most times.

April 24, 2012  1:39 PM

SAAS is the Driving Force

mspprophet Darren James Profile: mspprophet

If you want to have your finger on the pulse of managed service growth, look towards SAAS. I’m seeing an explosion in mid-market growth of migrating “line of business” applications to the cloud space. Mid size companies who’s only choice was on-site, in-house IT and server architecture, are finding that the right managed service provider can now citrix’ize and virtualize and support’ize the whole shebang.

Huge benefits of mobile access and scalability are just the tip of the iceberg for these companies. Even though the technology was there 5 years ago, the MSP industry and its supporting channel of technologies is now making it “off the shelf” when it comes to giving up the IT department.

MSP’s should be gearing up and polishing up their processes and tools. Securing the right vendors for their market, testing workflows and training the teams are top priority, for the MSP who wants to cash in on this opportunity. A good PSA and RMM, topped with a splash of quoting and backup solutions, should set the base for scaling the organization into the stratosphere. Truly the time has come to reach for the clouds!

I can be reached at

April 21, 2012  11:00 AM

Managing the Front Line

mspprophet Darren James Profile: mspprophet

When you run a break/fix or engineering company, you can track profitability with some standard metrics. Throw managed services into the mix and you have a whole new game. On one hand it’s important to have quality and quantity billing time to make a successful IT shop, but now you must manage fixed billing and the time allotted. I say time allotted because it was the only way I found that was predictable in measuring what margin I would get from managed services.

Teaching the staff about time sensitivity with managed services is a way to make everyone aware of the need to service the client with our best. Having 2 or 3 service calls about the same issue will make you poor really quick. Creating an environment that fosters ownership and accountability is the way to go. Techs and engineers are assigned base clients. Everyone shares in the bonus program for when we handle the client’s needs in the time allotted. If the issue could have been averted with proactive work and everyone missed it, the cost of that was deducted off the bonus amount.

I’m sure there are many different ways to do it. I say hiring the best customer service people who are backed by awesome tech people worked best for me. The relationship is the most important part, then tech skills. Both are necessary, but clients always leave because you weren’t responsive (read empathetic). Some may leave based on lack of tech skills, most on emotional response to feeling like they didn’t matter or were being ignored.

Time management and fanatical customer service is key to managing the front line.

I can be reached at

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