The Managed Services Provider Blog

March 18, 2012  1:55 PM

5 important qualities in an MSP

mspprophet Darren James Profile: mspprophet

Whether you are a systems integrator with many years in projects, or the local computer guy serving home and small businesses, there are certain qualities that are needed to be successful in managed services. The business model is one where you take full accountability for the operation and control of the clients environment.

You must be fanatical about customer service
Keeping clients happy and keeping little things from getting out of control is the way to many days of big profits. Take lead from wherever you find great customer service and emulate it. Always have someone answer a phone, no auto attendant. They don’t care you are big and have many extensions; they are calling because something isn’t right. Go ahead and call the largest MSP’s in your market.

You know what you are doing or can find that resource
If you are making money fixing the same issue, you will be losing money as an MSP. You must be completely capable of having every environment you manage under control. If you do not completely know everything, it will cost you, I promise. If needed, hire the best. The best candidates are people like you. They care about the customer and are smart.

Understand business process
The road to managing networks and computers for a fixed price is littered with unseen pitfalls. The best way to hedge your bet is to make as much as possible predictable. Understanding workflows and creating them for everyone to follow builds predictable business. From emergency response to server updates, the more you have a plan for the more you can control.

Be a good listener
Your clients will always express what they want. Your employees will always tell you what’s wrong. You are the middleman. Terry Hedden of Infinity Business Systems is a fanatical customer listener. That’s why he owns the largest IT firm in Tampa, he listens. The client will give you clues about what they need in many ways. Spending time with them is just as important as servicing them. An open ear will lead to increased revenue, I promise.

Never being satisfied with your own achievements
Pride always comes before a fall they say. Having a mindset of “is there a way to do this better?” even after you have delivered the solution will keep you humble. I guess I could have called this one humility, but you’d probably think I was going to give a sermon. Actually I am. This whole blog is about being of service. The ability to deliver technology, so it is understandable and usable by the average business person, is one of the highest positions of service I can think of for us geeks.

I can be reached at

March 16, 2012  1:06 PM

Here we go again!

mspprophet Darren James Profile: mspprophet

Haven’t we already been down this road? The late 90’s saw a spurt of; “We’re going to eliminate the pc and move to more centralized design and management” “It will save us trillions!!” “Thin Clients are the future” and then, nothing happened. Concerns about connectivity and central point of failure crushed the migration back to Server/Terminal platforms.

Now everyone is lining up to hook their star onto the desktop virtualization bandwagon. Will we go the distance this time? Has the technology caught up with the desire? Have we solved the single point of failure fear? Personally I’ve experienced the single point fail as IT manager. It is like losing an arm, that’s how painful it is. You lose careers over incidents containing single points of failure.

I suppose these days; experience has mitigated most of these worries. But you don’t have to look far to see opportunities. DNS, internet access and a handful of other points are still looming in the shadows. We are lulled into a false sense of security that if it’s outsourced, they have it covered. Well just remember this little conversation when the virtual desktop becomes a virtual blank screen for 4 hours. “Oh, ok, let’s install a backup desktop locally to cover ourselves”. There goes the cost savings and our contract.

I think the hype will settle down and certainly there will be good times ahead. The economy is hitting second gear in the tech areas and the rest will come up to speed by spring 2013. New business models are certain. Small business workflows are being transformed as we speak, which in turn will drive medium and large business in new models to accommodate the new markets. Our future is bright; just make sure we have more than one light bulb installed. Redundancy is all the rage!

I can always be reached at

March 15, 2012  3:56 PM

From Break/Fix to Managed Services

mspprophet Darren James Profile: mspprophet

I’m not sure I can cover this in one entry, but I don’t want to bore you guru’s who stop by to read me, so I will just skirt the issue and make it interesting. I learned the value of monthly billable from my previous life as owner of an environmental company. We were doing gas station remediation systems and although the margin for the install was great, I found it much more so when we opted to include the monthly operation & maintenance plan. So I gradually phased out all project work and targeted the O&M market directly.

Same goes here with the SMB computer systems management market. The overhead of a project and break/fix shop can be heavy and with the ability to create business processes that are measurable and predictable you can create better margins. And we all want better margins right? Reminds me of the Capital One commercial where he offers 50% more cash and the baby says “no”. The more predictable the business the more you can create automated responses, and that gives you more cash, not sure about the double points thing, ask Capital One.

So get to the point already, ya, I know. You have to create a mind change in the decision maker. The only way someone moves from break/fix to monthly fixed is if they feel the win for themselves. An example might be that you total up the years costs and offer to do managed services for 15% less, capping his costs and saving him. I opted for a planned education of the potential client by way of mailers and email newsletters. Sometimes you will hit a client at an extreme pain point and find them eager to sign on, especially after that $5000 dollar repair bill on the exchange server.

Ultimately it starts with your own strategy and from there you plot your course. There are many ways to get to recurring revenue and it can take any number of forms. One successful person I know just outsources everything and collects the difference. He is a salesman, he stuck with his core competency and hired others to do the rest. Start with your top clients. Chances are there will be room to negotiate the price and SLA so you won’t lose money. Cut your teeth on learning how to service them within a budgeted amount of resources. This will start the structure for your processes and teach you what needs to be done. I can always be reached at

March 13, 2012  3:27 PM

Dell buys SonicWall

mspprophet Darren James Profile: mspprophet

Darn, I was looking to buy them. Oh well, you snooze you lose. So let’s be paranoid about the whole thing and see if we can’t picture world domination for Dell. Or at least think about what it means to us channelnauts.

Dell’s acquisition picture over the last 2 years has spoken of diversification on the surface, which is a normal thing when you have some cash and most of your eggs are in one basket. Dell is doing what we should be doing as well. Once you are in as the “trusted advisor”, it would be extremely profitable, smart, logical for you to be able to sell and service all their needs.

See, in the very near future as the cloud and “everything as a service” model takes over, anyone who has a foot in the door could possibly take your eggs and you are left with dry toast. As much as you need to focus on your core competencies, you need to protect that trusted advisor role by diversifying to include any area that might threaten that position. I certainly don’t believe my cable company can come close to providing the IT consultancy I do, but I am not going to be assured they won’t try.

Brad Sugars, creator of Action Coach business coaching said it best, “Every day someone is trying to steal your clients, act accordingly.” I once took a survey asking my clients how many IT companies contacted them on a weekly basis, it was alarming.

Although I missed buying SonicWall for myself I am still aware of my need to protect my trusted advisor status. Maybe WatchGuard is available for cheap. I can always be reached at

March 12, 2012  2:33 PM

Packaging the cloud for the masses.

mspprophet Darren James Profile: mspprophet

I’m going to focus on what most MSP’s have as their bread and butter, the 5 to 50 user client. If you are one of those providers that handle the big guys go read my friend Joe over at MSPmentor he’s got news for you. I know someday he’ll plug me. Anyways, as I was saying, let’s talk about mom and pop and cloudy days ahead.

I’ve been putting long nights into this subject. The first thought is, “is there a solution for the small client?” The answer is yes and no. Storage for files and backups are part of it, but can we complete the whole deal and sell them an infrastructure, complete with desktops and applications? I surfed until 3am just on Virtual Desktop options and only got 4 pages in. There is a few I can see that might work. There are some vendors offering the whole deal, storage and desktops with email. The work that has to be done is the how much and why.

I think there are some margins in there, so far not much. We have to replace enough of the existing costs and problems so it adds up, so to speak. Now there will be situations where mobility and perhaps a growth period in their business that might force them to look at the new offers. Overall if we are going to move mom off her small business server in-house, we must have compelling data that either will save money or increase productivity. As I had mentioned in a previous blog, you are going to make your days pay as their trusted advisor. You may start thinking about a small fee based on numbers of users that represents your “management”.

Here’s the kicker, we remove the onsite except workstations, lose the server monthly maintenance then try and tack on what could be a larger amount then they were paying and you now also have to share that with your cloud vendor. Sounds like a loss in revenue to me. I hope you didn’t come here looking for answers. If I get this all figured out where costs are manageable and margins are better than in-house, I will post it, maybe.

For now, you are still on your own.
I can always be reached at

March 11, 2012  2:02 PM

I’m glad I didn’t know

mspprophet Darren James Profile: mspprophet

There were a few people talking about flat rate computer support. Mostly it was about trial and error, mostly error. Gary Pica and a couple others were filling the web sphere with claims of accomplishments. Even reading between the lines it was still hard to put some sort of business model together from what everyone was saying. So I headed out into the desert with just a compass and water.

Since I had been in business before, I had certain rules. One of those rules was, if I couldn’t make at least 33% margin, I would stay home. So not knowing how I was going to do this I doubled it. I figured that left plenty of room to make mistakes and not end up handing my house over to some banker. Plus, I love challenges. Total overhead of only 34% of revenue? Like I said, I’m glad no one told me otherwise.

I did end up where I wanted to be at around 30%. Certainly starting at such a low number helped. I think if I had started at 30 I would have ended up at 6%. Starting from scratch as a Managed Service Provider was the key. All my processes were based on managing the client’s environment at a certain level of total revenue for that client. Each client based upon the amount of revenue, received that amount of service. As I added staff the goal was always to perform within those boundaries without fail. There was no room for messy networks or sloppy repair.

Accept nothing but the best from your team. Set those expectations with your employees and also set the expectations of the customer. Something like, “the less you see us, the better off you are” is a start. Always tell the client what they need. Two halves of the success in managed services is right in the name, manage the service. Managing the customer’s expectation is the other half. In the end, it’s your goals that guide the ship.

I can always be reached at

March 7, 2012  10:36 PM

How to position yourself in the Hosted World to come.

mspprophet Darren James Profile: mspprophet

Or where do we fit in a clouded business model? Or what the heck are we going to charge for setting up cloud connectivity on a monthly basis???

I guess the first place to start is to create a value added package that includes providing clients with the new technology of hosted, clouded, “everything as a service” world. That’s what I think. Somehow ya gotta make some money and package the thing.

I believe you have two options, white label and re-brand existing offerings or build your own cloud offerings. I believe with the security issues and multi platforms it will be easier to create an environment that holds everything. Centralized security and mobile access are going to be the driving force of cloud usage.

I’m not going to write another “the clouds are coming” piece, rather just get you to start thinking about what your business will look like 24 months from now. The days of $30,000.00 small biz install quotes are heading to the graveyard. Whether we can find enough margin, in hosted services is yet to be determined. I do know the knowledge to bring all the options together and make it work is where you’ll earn your days pay and that’s a good thing. The big corporations still can’t replace good old fashioned one on one IT consulting. However you move through this, make it a reflection of your business model.

I personally believe big and bulky will be replaced with light and mobile fairly quick and it’s going to take a smart, dynamic MSP to shift and grow with it. Our whole market is changing before our eyes and lots of opportunity and revenue is up for grabs. Ready, Set, Change!!

I can always be reached at

March 6, 2012  7:46 PM

Stop the Press! and stop selling yourself short.

mspprophet Darren James Profile: mspprophet

I’m sure there will be different opinions on this, but I am going with what worked for me. My question to you is how do you sell your services? Do you have a menu based marketing where potential clients can pick from “all you can eat”, to basic monitoring? Well stop, I want you to take a moment and think about what you offer.

Perhaps it would be better if we started with the client view of IT support. When you get to the point where they are willing to TRUST you to manage their technology, that is the key. They are now willing to trust your judgement on what is best for them. Imagine being in your doctors office and he talks about your health. Then as you’re ending the meeting he brings out a service card and asks you what type of healthcare you want. Do you want to know immediately if you have a hernia, or would you like to just wait till you’re in pain every day?

Bad analogy, maybe, but you get the idea. OK, so I don’t believe in a gold plan or bronze package idea of selling your services. I think we sell ourselves short and we reduce our talent to a “best buy” frame of mind. So how or what can you do? Only offer one level of support, The one corporate-class, best in show, no one does it like us type of offering. Then if you must, offer additional best in class side dishes such as business continuity.

Reduce your business down to its basic processes, get crazy good at it, and go from there. Offer yourself as a professional service and market in terms the client understands. Create standout moments, things that your client will always remember. We always delivered birthday greetings to ALL the contacts we had for a company. I personally hand wrote the cards and had them delivered by Currier.

So for my two cents today, get rid of the a la carte and sell one thing, your greatest effort. Which is what you do every day, right?

I can always be reached at

March 5, 2012  3:55 PM

The MOST important phrase you’ll ever speak!

mspprophet Darren James Profile: mspprophet

No it’s not “I do”, Although that one will certainly change your life. I mean the one when a prospective client asks, “why should I choose you?” The correct answer to that question is one you should hold dear to your heart and practice saying as much as “I’ll have a bud light”.

A value proposition or your value proposition is what sets you apart from everyone else. So if you said, “cause we’re the best”, forget it, that won’t work. I have had several VP’s in my business life and my professional life. Even going for a job you should have a V.P. to spill onto an unsuspecting HR person. So my last VP for the remaining 3 years of my practice was, (drum role).. “We are so confident in our service we will hold your check and return it to you anytime you are not satisfied with us.” It was something like that, the marketing people said it better than I did.

The point in all this rhetoric is you can’t really expect people to hire you unless you give them something to go “ooh” about. It’s the “what’s in it for me” decade. What did you expect from the “me” generation?, “hey we’ll throw our money to you because you’re a nice guy”, I say not. You are going to have to stand out in a BIG way, if you want to be big.

Make your Value Proposition about what you do if you can. If you can’t focus on that, then make it about how you do what you do. Don’t expect to get an answer right away. I spent 3 months finding my best ones. Make it good and you may never have to come up with another one, instead you’ll be counting cash all day.

I can always be reached at

February 28, 2012  4:23 PM

From self-employed to business owner

mspprophet Darren James Profile: mspprophet

What’s the difference you say? The business owner oversees his business and the day to day operations are done by others. So how do you get there? First thing you have to do is have a plan. It’s a money and people plan. Nobody has the exact formula, but there are good guidelines to go by. I personally came up with my own plan. I figured 3 very important goals to reach. The first is my break-even point, how much coin to make to cover the nut. Then I figured out how much I needed to have to hire an operations man. Then I added up the cost for a sales person. Those 3 points allowed me to reach goals and put plans into place that allowed me to step back and be the visionary I am.

Now it didn’t go that smooth. There were long days, delayed gratification and a host of other small things I needed to do, to accomplish the plan. I did it though. I moved from day to day into the next 6 months, then next year and so forth. I now had the time and energy to build the business.

So what are your plans? Are you happy self-employed? The first question is always to yourself, what do you want to do every day? If you build your business around that answer you will be a very happy person. Till next time.

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