Every MSP relies on IT and business vendors. There’s vendor management for backup, AV, firewalls, cloud hosting, or specialized tools — and plenty more. But when those vendors fail, overbill, or deliver poor support, your reputation takes the hit.
Smart vendor management for MSPs starts with tiering your vendors by importance and risk. Your AV provider and RMM aren’t on the same level as the vendor who provides business cards. Create a tiered list: Tier 1 (mission critical), Tier 2 (important), Tier 3 (nice to have). Evaluate each differently.
Vendor risk isn’t just about outages. For MSPs, it spans security exposure, operational disruption, financial surprises, and reputational damage. A breach at a security vendor, a sudden price hike from a core platform, or slow support during an outage can all roll downhill to your clients and your brand.
Vet Before You Regret
Before signing with a new vendor, check:
- Financial stability
- Past incidents or breaches
- Quality of customer support
- Alignment with your values (especially security posture)
Corey Kirkendoll
Ask for references from other MSPs, not just cherry-picked success stories.
“We’d like less generic messaging that sounds like it was written for all MSPs, and none of our customers,” said Corey Kirkendoll, president and CEO of Allen, TX-based 5K Technical Services. “Also, [don’t accept] ‘AI-powered claims’ without clear use cases, guardrails, or monetization paths.”
Use a shared vendor scorecard. Document product uptime, ticket response times, and real support experiences. Share that with your team so vendor issues aren’t anecdotal; they’re trackable.
Avoid lock-in without leverage. If a vendor wants a long-term contract, negotiate protections: price caps, SLAs, early exit options. Being “locked in” without leverage is a recipe for frustration.
The Compliance Element
For MSPs serving regulated industries, vendor management is also a compliance issue. Whether it’s SOC 2, HIPAA, or industry-specific requirements, clients and auditors increasingly expect MSPs to show how they evaluate and monitor third parties. Even when a vendor fails, accountability often lands with the MSP.
Documenting vendor decisions can protect your MSP when clients, auditors, or insurers start asking questions.
Give It the QBR Treatment
Regular reviews matter. Treat vendor management like client account reviews, quarterly or bi-annually, not whenever something breaks.
Proactive vendor oversight can prevent disasters before they hit your clients. During vendor reviews, look beyond marketing updates. Focus on what actually impacts your business and your clients, such as:
- SLA performance versus contract commitments
- Support response times and escalation trends
- Security updates, incident disclosures, and roadmap changes
- Product stability since the last review
- Upcoming pricing, licensing, or policy changes
If a vendor can’t answer these questions clearly, that’s a signal worth noting.
Check out the ChannelPro Strategic Partnerships Answer Center for answers to your questions about creating strategic alliances to grow your business.
Watch for Vendor Sprawl
Mike Bloomfield
Too many tools can create risk of their own. Overlapping platforms increase complexity, training costs, and blind spots. This is especially true when security responsibilities are split across vendors.
“MSPs need tools we can trust — products that are stable, secure, and built with strong internal processes behind them,” said Tekie Geek President Geek Mike Bloomfield in ChannelPro’s Open Letter from MSPs to Our Vendor Partners. “When vendors prioritize reliability and transparency, it strengthens our ability to protect clients and build confidence in the solutions we recommend.”
Periodically review your stack for redundancy. Consolidating vendors where it makes sense can improve visibility, simplify support, and reduce the chances that something critical falls through the cracks.
What Not to Do
Vendor management goes beyond choosing the right partners. You must also avoid common traps:
- Don’t rely on gut feel alone.
- Don’t ignore warning signs because switching feels painful.
- Don’t assume big-name vendors are low risk by default.
Past performance and transparency matter more than brand recognition.
Winning Smart Vendor Management for MSPs
If you don’t already have a formal process, start small. Build a simple vendor tier list, create a shared scorecard, and schedule regular reviews for your most critical partners.
Vendor management doesn’t have to be complicated. But it has to be intentional.
Remember: A poor vendor can cost you clients. A great one makes you look like a hero. Choose wisely.
Featured image: vchalup — stock.adobe.com
