IT and Business Insights for SMB Solution Providers

Third-Party Maintenance Business Strategies for MSPs (Part Two)

By Harry Brelsford

Managed Services Providers (MSPs) are hyper focused on generating new sources of revenue to generate badly needed cash to survive the current economic correction. In part one of this series on Third-Party Maintenance (TPM), we painted the picture for MSPs to engage in a pandemic pivot and protect their business model “portfolio” by actively promoting TPM services and solutions (and there was also a need to protect your customer’s technology assets/portfolio by extending the useful life of technology assets in a recession).

Risk Assessments

Every week I’m asked by MSPs about how to find and secure new technology services opportunities. Assuming we’ve already established that the TPM opportunity is real, right here right now, let’s talk business development. A long-standing trend over the past decade+ has been for the MSP to elevate beyond providing simple technician services and expanding into adding value with business technology insights and solutions.

TPM is prime for gaining new clients with technology assessments in the second part of 2020 starting today as a business development exercise. A TPM risk assessment has two components: physical and financial/business. The physical risk assessment is a natural act for MSPs who can use a number of popular tools to scan the network and report back inventory, upgrades, required patching and hardware warranty information. That provides the baseline for the MSP to engage in simple TPM analytics to create a report or dashboard showing the need for continuation warrant coverage via TPM.

BEST PRACTICE: Typically, the MSP would digest the information and share summary highlights with the client. However, I would discourage you from over-sharing the technical assessment information with the client. Clients look to you to take the assessment data and create information that they can digest.

The adage "that which we can measure we can manage" is a direct hit for the MSP seeking to go and grow a new revenue source. Once you have the above analytics, you can now work side-by-side with your client and evaluate which extended warranty via the TPM motion is appropriate. There are several players, and each has different distinctive attributes.

Finally, much has been written about whether your risk assessment should be provided complimentary to your potential client or should you charge for this valuable service as an MSP? This is an on-going debate with viable arguments on both sides of this matter. I suggest you perform a simple search to read some of the analysis by thought leaders and make your own decision.

Risk Analysis

Which leads us to the decision as to which TPM service to engage with. This is where I’d offer you need to think about who you, the MSP, partner with to secure the TPM contract. Truth be told – I harbor concerns with a couple of the TPM players that are private equity-backed. Why? Because the fact is that this type of TPM service provider has direct access to your client information. And perhaps you know the “rest of the story” where the TPM provider could take your client away from you upon renewal or other milestones and eliminate your revenue stream.

Hedge Strategy

There is a simple answer to protect your MSP business portfolio in a TPM scenario: use reputable technology distributors like Climb Channel Solutions (formerly Lifeboat Distributing), Ingram Micro, Synnex and Tech Data. Why? Distributors will never directly solicit or steal your client. Case closed!

Harry Brelsford is the founder of SMB Nation from Bainbridge Island, Wash. He is a long-time SMB channel partner who has served customers and mentored other partners (SMB Nation has over 49,000 members who are Managed Services Providers (MSPs) and SMB technology consultants). He oversees the popular SMB Nation workflow including content and events (webinars, workshops and multi-day conferences).

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