The Growing MSP: increasing revenues with infrastructure management

With falling margins on IT equipment sales, the channel has been increasingly focused on managed services revenues. Areas like managed firewalls,

 

 

business continuity and hosted applications have all generated lots of interest. However, the same commoditisation and downward margin pressure faced by hardware sales are now starting to impact the somewhat crowded MSP community.

While talking to a few partners recently they indicated that a new area they are investigating is full managed infrastructure services. This includes complete support and break-fix for everything on a customer’s site including IT but also additional related equipment. However, they made it clear that a big factor between profit and loss in the delivery of these services is reducing the number of site visits and covering as wide a number of devices as possible.

Sending out an engineer to power cycle a stalled network switch or patch a DSL modem is an expensive task. In theory, some IP based equipment can be remotely managed via helpdesk tools but sometimes, especially with a network problem, these remote software tools are no use. Only out-of-band technology using the 3G or 4G LTE mobile network can effect a remote fix in these cases.

Although the technical considerations are an issue, MSPs should consider that organisations also seek the business benefits offered by moving to a single provider.  In many cases, “one throat-to-choke” saves confusion and can reduce cost.  In the same way that many car repair garages increase trade by doing MOTs or supermarkets increase trade by offering discount fuel – the one stop shop model also offers convenience.

In recent years, many ancillary devices like point-of-sales (POS) terminals, vending machines, access control and building management systems have become highly computerised and IP compatible. The skills needed to solve a POS error or reset a building management system are often less demanding than those taught to a CCIE (Cisco network engineer). Skilling up an IT engineer to look after other devices can pay back training costs with the first client that would have normally overlooked your combined MSP service for a POS specialist.  To further reduce site visits, many of these ancillary devices have service ports based on Ethernet, serial or USB interfaces that also work with IP or out-of-band access.

I’m breaking no confidences in saying that a number of our partners are looking at how they can use our entry level remote site management devices to build complete infrastructure management and support services. By reducing site visits, automating common fault resolution techniques and using low cost cellular links, they plan to undercut existing service providers yet still remain highly profitable. MSPs just focusing on a single element of the managed services stack are missing out on a trick