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.
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.
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.””
Landing Larger Clients
To move upmarket, MSPs should be meeting with the decision makers, recommends Stinner, who says he won’t book an appointment with anyone else. “”You can’t go into the CIO or the director of IT or people in a technical role. A majority of them still see us as a threat.”” He prefers the CFO for a discussion on ROI. “”Their job is to protect the organization against risk. So when we have discussions around cybersecurity, the CFO is usually a good one.'””
Fernandez agrees, but cautions that the conversation shouldn’t be about operational matters. “”It’s about return on investment. So how does your solution save me money in the long run? How does it impact my bottom line?””
MSPs should also be able to explain their processes and procedures, “”in finite detail,”” because midsize companies will ask, Fernandez says.
Be prepared to offer customer testimonials too, he advises: “”When you get into that midmarket, they want to know that … you have a proven track record of success, and that you can deliver it.””
Potential Pitfalls
Before jumping into the midmarket, MSPs need to make sure they have the capacity. “”It’s possible that it could be a big jump in support requirements,”” says Ford, who recommends thoroughly vetting the opportunity to determine workload for your personnel as well as to set expectations.
“”You definitely can’t be a sloppy MSP,”” adds Stinner. This means having a well-run organization operations-wise with people in proactive roles and processes in place. Otherwise, he says, “”you could potentially drown.””
One of those processes needs to be great customer onboarding. “”We’ve built that over the years and that’s helped us tremendously,”” Stinner says.
Thordarson leans on his team of highly self-directed technicians who don’t need micromanaging. “”Working in the mid-enterprise market, most client engagements are not one-man shows like it can be in the SMB segment. It usually requires a team of people to get the work done.””
Opportunity Ahead
While going upmarket may sound daunting, Stinner says it’s more like serving smaller companies than you might think. “”There is more work when there’s more people and there’s more tickets to deal with, but the systems and structure that we’ve put in place to get a customer running well is not all that different.”” He chalks up his firm’s readiness to its continuous process improvement culture.
“”We feel it’s a great opportunity,”” he says. “”We’ve learned with the smaller customers that we’re ready.””
Fernandez sums it up this way: “”It’s just really about understanding who you are, what your product line is, and what your stack is, and then making sure that you have built it to a way that you can communicate success.”” If you can do that, “”you can definitely play that game.””
Image: iStock
