In a cloud-first world, it’s no longer enough to sell a project and simply move on to the next one. You need to think differently. Instead of developing and selling projects, Managed Services Providers develop customers. It’s now more crucial than ever to complement any solutions you provide with a full services team to support your clients as efficiently and effectively as possible. The days of the system integrator and project resellers are fast disappearing.
That’s why we’re launching the Managed Services Provider hub on the Microsoft Partner Network. This managed services content will provide partners key information on how to build and grow a business in the cloud that provides customers long-term value and partners long-term profitability.
What is the MSP Hub?
The MSP Hub is a one-stop guide to researching, building, and growing a managed services provider offering. You’ll get a helpful breakdown of the steps involved in creating your own managed services practice from square one. And once you get started, you’ll learn how to further differentiate, promote, and expand the scope of your business.
Whether you’re simply curious about what MSP is all about, or actively looking to take the next step in your journey, this guide—and the Microsoft Partner Network in full—is here to help.
Managed Services: More Than A Vendor, A Trusted Advisor
A managed services provider delivers a set of services to clients, either proactively or as needed. For more than 20 years, large enterprises have relied on managed services businesses to manage information and customer workloads. Adding managed services to your business helps address your customers’ needs by uncovering opportunities that provide long-term value with ongoing services and potentially intellectual property. Additionally, adopting managed services is also an efficient way to stay up-to-date on technology, get access to necessary skills, and address a range of issues related to cost, quality of service, and risk.
Take Generation-e for example. Once they added managed services to their business, they saw an almost immediate cash flow benefit with 36% of their revenue now coming from being an MSP. Loryan Strant, the cloud CTO at Generation-e, refers to this as “long-term revenue” meaning they have stronger engagement with their customers and further connected beyond just an IT solution.
What else makes an MSP? It’s a premium quality service provided on an ongoing contractual basis, rather a cost-per-project. The best way to think of about managed services is that it’s a long-term investment—not only in your own business, but also in your clients’ operations. The average marigins for a managed services provider are 50-60% compared to that of a reseller which are less than 20%, meaning an MSP model is more than twice as profitable.
While the idea of adding managed services to your business may feel intimidating—and it is a major shift—it’s important to understand the evidence and opportunities to help educate your clients through the process. While there may be benefits to businesses in which vendors are called in on a per-project basis, providing proactive services under a long-term contract is inherently more sustainable than relying on a break-and-fix business. According to an IDC study, Managed Services account for a 45% increase in profits, higher than both resale and professional services.
“Managed services is critical to us because we now live in a consumption economy. And what most of our clients want is actually to buy a service from us and have that service help them not only provide support service, but also help them consume and use those products.”
– Tim Wallis, CEO Content and Code
Additionally, when you build cloud solutions on top of a managed services offering, you are future proofing your business. Managed services revenue for cloud services will grow from $17 billion in 2014 to $43 billion in 2018 — 60% faster than revenue from infrastructure-only services.
Get Started Now
The most valuable part of a Managed Services business is right in there in the name. Services. The MSP Hub will also provide the necessary solutions and products to help your business optimize its services and truly engage with customers to meet their needs and solidify relationships. Those relationships will ensure a recurring revenue stream that grows as your customer’s consumption and subsequently, their business grows. We’ve provided step-by-step guidance to implement the appropriate Microsoft solutions to not only help you build a managed services business but also grow one.
One of the best ways to fully optimize your managed services business is through our Cloud Solutions Provider (CSP) program. CSP enables your business’s transition to the cloud, allowing for MSPs to embrace transformation and begin taking ownership of end-to-end relationships. With CSP, you can future-proof your business by combining high-margin service offerings with Microsoft cloud products.
Leverage Microsoft’s managed services content to better understand the resources available. Identify the right investments you should be making in order to build and grow a successful cloud business.