IT and Business Insights for SMB Solution Providers

Moving into Midsize

A global pandemic, rising security threats, and tightened IT budgets find MSPs in the right place at the right time to land larger customers. By Colleen Frye
Reader ROI: 
MOST MSPs have the business model and tools to help midmarket and larger firms struggling to support and secure remote workers.
DECISION MAKERS will look for operationally strong MSPs who can detail their processes and procedures and make a case for ROI.
MSPs SHOULD EXPECT a longer sales cycle and have the ability to provide à la carte services.

THE JUMP TO WORK-FROM-HOME computing brought about by the coronavirus pandemic has left corporate IT departments overwhelmed with unfamiliar remote management tasks that are second nature to managed service providers. The upshot is one of COVID-19’s few silver linings: The opportunity for MSPs to land rich new contracts with midsize and even larger businesses that had no prior interest in outsourced IT.

Juan Fernandez

MSPs were built for this moment, according to Juan Fernandez, vice president of managed IT services for ImageNet Consulting, a print management and IT service company based in Oklahoma City, Okla. “It's so much easier for us to help them than it is for them to help themselves,” he says, adding that it’s faster for midsize businesses to become educated on how to work with an MSP than to build their own remote desktops, spin up costly virtual desktops, or install endpoint security.

Indeed, a July 2020 report from research and advisory firm Information Services Group finds that the pressures of mounting cybersecurity threats, speeding time to market, shrinking IT budgets, and expensive downtime are driving larger businesses to seek help from MSPs to manage their infrastructure.

“We have more of these opportunities in our sales funnel right now than we've ever had before,” says David Stinner, president of US itek Group, an MSP in Tonawanda, N.Y. “I think some of it is maybe because the tide went out and it exposed some of the weaknesses of their infrastructure when work at home started.”

ImageNet, which has traditionally worked with larger enterprises on the print side, is also seeing increased interest in managed services, Fernandez says. “Is it a flood? No.” But enterprises that typically don’t see a fit and/or need for managed services are exploring it. “We are getting a lot more conversation around co-managed IT and what that would look like and how can we implement it.”

While “co-managed IT” is a concept that has gained popularity over the last few years, both Fernandez and Stinner say midsize and larger firms simply view it as outsourcing.

The challenge, however, is to remove the perceived threat by in-house IT of being replaced or losing control of their networks, according to Scott Ford, director of operations at Pronesis Technology Group, an MSP in Brandon, Fla. “The big issue is helping them to understand that we're there to work with them,” which is why he avoids using the co-managed IT moniker. “We're using words like ‘partnership’ and ‘team’ and ‘extension.’”

This is an opportunity for MSPs to educate larger businesses, Fernandez says. “You’ve got to bridge the gap with the co-managed and become an educator on how we can do this together. They don't know this is really an option.”

Unique Attributes

The “M” in SMB does have some key differences from its smaller brethren. A longer sales cycle and bigger budget are two. “They definitely have the capital to do the projects that we recommend to keep them safe, to put the right tools in place to pay attention to PCI compliance or to pay attention to their cybersecurity insurance regulations,” Stinner says.

They also typically have their own resources for procuring hardware and software, according to Oli Thordarson, president and CEO of Alvaka Networks, an MSP in Irvine, Calif. Another difference, he continues, is that midmarket firms are not interested in an all-you-can eat offering. “They tend to buy solutions that solve particular pain points,” he explains.

Scott Ford

Ford finds his midsize prospects seek help for two main reasons. “Sometimes they want us to help with help desk-type issues so that they can focus on other strategic initiatives. Other times it's the exact opposite. They might be so busy with the day-to-day stuff that they don't have the time, or in some cases the expertise, to do larger projects like server replacements.”

It’s a very white-glove, custom approach, agrees Fernandez. “We have to manage them to however they want to be managed or however they want to work together. … I can't force my hardware on them. I can't force my process on them. That's not what they want.”

About the Author

Colleen Frye's picture

Colleen Frye is ChannelPro's managing editor.

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