IT and Business Insights for SMB Solution Providers

Creating a Managed Services Practice- With Available Resources

Let’s flash back to the 1980s, when channel resellers were receiving healthy margins selling OEM equipment to small and mid-sized businesses. Over time, those profit percentages were eroded by competitive forces and manufacturers looking to improve their bottom line. That was one factor that caused many resellers to evolve their business model, becoming VARs (value added resellers). In this adaptation of the IT channel, providers gradually discovered increased profitability not from the sale of equipment, but from servicing it. For a while, these IT businesses were profitable again; but in time the overall margins started to decline once again, as competition and hardware reliability rose. As Yogi Berra once quipped, “it was déjà vu all over again.”

Today, VARs and solution providers are discovering that strong profits are not obtained by servicing OEM equipment on a time and materials basis, but by contractually assuming responsibility for a portion of a customer’s IT environment. Accountability is measured with a service level agreement which, in effect, makes the VAR an outsourced CIO (more commonly referred to as an MSP, or managed services provider). So successful is this service delivery model that Managed Services has continued to grow relative to the overall IT industry through the 2008/2009 recession. Furthermore, it is predicted to top $66B by 2012. But managed services is not for the faint of heart. In this brave new world, VARs need to be good at not only technology, but operations, financial management, and sales and marketing.  So what’s a VAR to do?  Where can they find step by step help on transforming their time and material business into a highly profitable Managed Services business? CompTIA MSP Partners has conducted years of extensive industry research and leveraged the collective experience of best in class MSPs to provide you with education and resources to put you on the proven path to Managed Services success.

If you’re new to managed services, you might start out with the VAR Guy’s 90-Day Guide to Managed Services. This guide breaks down the process of transforming to a managed services model in three monthly sections, making it easy to follow and implement.

Or do you learn best from others’ examples and are wondering how they’ve made the jump? Read up on the industry best practices and how others have implemented (or created) them  in CompTIA’s collection of MSP Case Studies.

Maybe you’ve already discovered some of the benefits of a managed services approach, but want additional and innovative ideas on building your own business. One approach that others have found successful is calculating a return on investment for your customers. Tell them how much money they’ll save and how fast they will get payback by investing in managed services. Try out CompTIA’s ROI Managed Services Sales Tool to calculate ROI.

Entering a new vertical is another way to build your business. Have you ever investigated the market opportunities with insurance companies, financial institutions, or law firms? Use CompTIA’s Managed Services Sales Guides to learn more about the critical technologies and key questions to ask when selling into new business segments and vertical markets.

If you’re already a true believer in managed services, CompTIA has lots of tools for you too! Check out CompTIA’s 2010 Managed Services Training Videos to learn more about current market dynamics and opportunities. The training videos explain how best practices help separate MSP winners from the rest of the pack, available anytime you need them.

Curious to discover how you stack up with your competition? CompTIA’s Managed Services Self-Assessment Tool offers you a way to compare your company’s financial performance & operational maturity with median & best-in-class Managed Services firms.

In addition, there are a multitude of other articles, webinars, and tools for starting and building your managed services. Check out the comprehensive resources today at MSPPartners, or at the CompTIA Member Resource Center.  

What other tools and opportunities can CompTIA offer you? Join the CompTIA Managed IT Services Community and let us know. This group offers you an opportunity to network with thought leaders, develop managed IT services-specific programs and tools, and generate member-driven initiatives. Our resources are yours, designed for members by members, so you can apply them readily to your business. Check out the portfolio and let us know what we can do to help.

One last managed IT services tip. Join us at Breakaway this Aug. 9-12 in San Antonio as we continue to expand the CompTIA Managed IT Services community! We’ll build on current initiatives, such as the accreditation project and an MSP best practices guide, while also looking to the other critical needs for this emerging  industry. Remember, registration for members is FREE!


About the Author

With more than 2,000 members, 3,000 academic and training partners and tens of thousands of registered users spanning the entire information communications and technology (ICT) industry, CompTIA has become a leading voice for the technology ecosystem.

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