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Top 4 Ways MSPs Can Take Advantage of Growth Opportunities in 2015

service tiers

Three recent studies underline how 2015 is shaping up to be a great year for MSPs in the U.S.

SunTrust Banks’ annual Business Pulse Survey showed that 78% of small- and 84% of mid-sized U.S. businesses are prepped for growth this year. In fact, automating business processes and investing in technology and facilities were among the top projects noted to support this growth (especially for smaller companies).

The eighth-annual American Express/CFO Research Global Business and Spending Monitor reported similar U.S. business growth outlooks, with 35% of the U.S. respondents citing insufficient in-house IT staff and expertise to support this growth.

Finally, the CompTIA study, Enabling SMBs with Technology, found that more than two-thirds of companies surveyed have outsourced IT services in the past 12 months, with 90% somewhat or very familiar with the managed service provider concept.

So, how can MSPs best leverage the opportunity created by business growth expectations, an IT staffing crunch, and increased awareness of the value of managed services?
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Step Up to the Plate with Security Services in 2015

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It’s no surprise that security was the No. 1 SMB concern among respondents surveyed for the recent CompTIA study, Enabling SMBs with Technology. As the report states, “Security is quickly becoming a top priority for all businesses as breaches occur more frequently and carry more serious repercussions.”

Comprehensive security management is no longer a nice-to-have. It’s a basic requirement to make sure a company’s systems and data are protected not only from malicious agents, but also from human error, oversight and procrastination. The risks are just too high. Over half of small businesses go out of business within six months of a security breachsince they don’t have the resources of a Global 2000 company to weather the repercussions.

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Why Mobility Management Matters to MSPs’ Customers

As an MSP, does the following scenario sound familiar to you?

A customer (say a small financial institution) calls you to report that one their employees lost a tablet that was used to access sensitive customer information. They are unsure if that information is protected and are now worried about the repercussions if that information is compromised. HELP!

This is a fairly common scenario owing to the proliferation of mobile devices at workplaces. These are powerful computing devices that need management. In this post, let’s discuss the mobility trend and why mobility management is important for Small and Medium-sized Businesses (SMBs)–the typical customers of an MSP.

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MSP Pricing Survey – 10 Tips for Higher Growth

The fourth annual Kaseya MSP pricing survey attracted almost 700 responses from MSPs around the world. The 2014 survey included questions on a broad set of topics including demographics, growth rates, services offered, pricing strategies, the prices charged for a variety of services, and price revision plans for 2015. We’ve described many of the findings in our series of MSP Pricing Survey blog posts over the past several weeks.

Based on the survey results, other market research, and conversations with leading MSP luminaries and advisors, here is a list of 10 tips for MSPs who would like to grow faster:

  1. Position a small number of service bundles/tiers with increasing levels of capability. SMB customers want more comprehensive services and see strong value in attractively priced bundled managed services.

  2. MSP-Pricing.ig.1
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MSP Pricing Survey – Pricing Managed Services

First Determine Your Target

Before pricing any service it’s important to determine the needs of your target market. Smaller companies have lower revenues in general and are constrained in their ability to fund expensive services. They look for low priced offerings providing basic levels of support. Nevertheless, all businesses are interested in getting the best value for their investments (read largest ROI) and most will favor higher value, versus a lower price, if the value price fits within their budgetary constraints.

If every client wanted the same outcome you’d expect price ranges for more popular managed services to be fairly narrow, but in reality, they’re not. Consider the prices charged by respondents to the 2014 Kaseya MSP Pricing Survey for desktop support – see chart below. The chart shows the average desktop device support and maintenance charge per month achieved by the survey respondents. The results shown compare responses from MSPs who’s monthly recurring revenue (MRR) had grown at greater than 10% per annum to those who grew their MRRs at less than 10%. As you can see the range of prices is quite wide, reflecting the different value perceived by different customer segments in different locations.

Average-desktop-device-support

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MSP Pricing Survey – Mobile Market Expectations

Are MSPs ready for the mobile management market explosion?

When it comes to mobile device and bring your own device (BYOD) management results from the 2014 MSP Pricing Survey suggest mixed opinions among Kaseya’s MSP customer base. On the one hand, almost half (48%) of the survey respondents have yet to offer Mobile Device Management (MDM) services. On the other hand, those that are offering MDM or BYOD services for a fee are obtaining between $2 and $15+ per device per month. For those who have found a market for these services the revenue opportunities are considerable. Over 25% offering MDM services and over 30% offering BYOD-related services are able to charge over $5 per device per month. 5% of the MDM service providers and 10% of the BYOD providers are charging more than $15 per device per month.

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In 2014 the number of mobile devices grew to exceed the total population of the planet! This includes approximately 2 billion smartphones. Of course, the mere existence of mobile devices does not necessarily translate into a need for mobile device management – particularly among the small and medium businesses (SMBs), who are the primary recipients of MSPs’ managed service offerings. Yet when we asked SMBs about their use of managed services for mobile device and BYOD management about 26% indicated that they were already using such services and a further 31% indicated that they were planning to do so – see chart below.

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MSP Pricing Survey – Clouds Can Be Lucrative!

SMBs Have Adopted Cloud Services

There’s no doubt about it. Cloud services are a tremendous hit with SMB customers. Whether they are running applications in a public cloud or whether they are leveraging private cloud services from a managed or cloud service provider, the great majority of SMBs are increasing their use of cloud services* and MSPs are benefiting.

This trend does represent a double-edged sword. On the one hand, MSP clients may be reducing their needs for managed servers or managed application services such as email because they plan to move applications to a public cloud or software service provider, e.g. migrating from an in-house Exchange server to Exchange Online via Office 365. On the other hand, there is a growing opportunity for MSPs to both assist clients with their migration process as well as to offer related managed services. As time goes on we expect to see a broad range of cloud-related service offering, including:

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MSP Pricing Survey – Service Offerings Expand

MSPs are adding new service capabilities

One of the strongest trends in the managed services market, highlighted by our most recent Pricing Survey, is the increase in the number of different services (or bundled service components) now offered by Kaseya MSP customers. Our 2014 survey asked MSPs to identify which of a series of 17 services they offered. These responses were then compared to those from our 2013 survey which requested input on 11 categories of service. The results are shown in the chart below. The overall response indicates that more MSPs are offering more services. In fact, a greater proportion of MSPs are now offering all of the services we asked about in 2013. In addition, a significant number are offering the newer service capabilities we added.

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MSP Pricing Survey – Increased Hourly Rates

Worldwide Average Standard Hourly Rates Increased from 2013

The overall average standard hourly rates MSPs charge for their engineers and technicians went up by about $10 per hour between 2013 and 2014 according to the results of the last two Kaseya MSP Pricing Surveys. In our 2014 survey we asked about pricing for three tiers of technician support – level 1, level 2, and level 3 – whereas the previous survey simply asked about “average” hourly rates. However, despite various differences in the number and size of respondents between this survey and the previous one, the results were generally consistent. Rates in the United States and Australia were the highest followed by rates in Europe, Canada, New Zealand and South Africa. Hourly rates were lowest in India – see the table later in the post that highlights the differences on a regional basis.

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MSP Pricing Survey – Growth Leaders Sell Value

Strong value pricing trend

The fourth annual Kaseya MSP Customer Pricing Survey was conducted in September and October last year and it attracted almost 700 responses from MSPs around the world. One of the strongest results to come out of the survey is the significant movement towards value-based managed services pricing and away from cost-based or market-based pricing. The chart below contrasts the differences between the 2013 MSP pricing survey results and the more recent responses. the trend towards value-based pricing is clear. The results support the notion that managed services customers are increasingly interested in business value and linking their purchases to key performance indicators (KPIs), such as system availability, or performance levels, or business outcomes.

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