Partnering with other MSPs can help you expand your service offerings, improve client satisfaction, and take on larger opportunities. But be forewarned: There are risks. This guide explores the benefits and challenges of collaborating with peer MSPs, outlines key considerations for choosing the right partners, and provides actionable steps for building successful partnerships.
The Benefits of Partnering with Other MSPs
1. Expand Your Service Offerings
Partnering allows you to subcontract or collaborate with MSPs that specialize in services you don’t offer, such as cybersecurity, cloud management, or compliance consulting.
- Key Insight
- By extending your service stack, you can say “yes” to more client needs without hiring or training in-house teams immediately.
- Bottom Line Impact
- Improved client satisfaction and increased revenue from expanded offerings.
- Next Steps
- Identify services your clients frequently ask for that are outside your core expertise.
- Research MSPs that excel in those services to evaluate partnership opportunities.
2. Take on Larger Projects
Collaborating with other MSPs enables you to tackle enterprise-level projects or clients that require a broader range of skills and resources.
- Key Insight
- Sharing resources can make your MSP competitive for bids or opportunities that would otherwise be too large to handle alone.
- Bottom Line Impact
- Access to higher-value clients and larger, long-term contracts.
- Next Step
- Evaluate your current capacity to identify gaps. Partner with MSPs who can fill those gaps seamlessly.
3. Mitigate Resource Constraints
If your team is at capacity, subcontracting to another MSP can help you deliver projects on time without overburdening your staff.
- Key Insight
- Partnering ensures you can scale operations temporarily without hiring additional full-time staff.
- Bottom Line Impact
- Increased operational flexibility and higher client satisfaction.
- Next Step
- Assess workloads and determine when subcontracting can improve efficiency without compromising margins.
4. Access to Specialized Expertise
Partnering with niche MSPs provides access to specialized knowledge or certifications (e.g., compliance, security frameworks, vertical solutions).
- Key Insight
- Leveraging a partner’s expertise enhances the quality of your services while positioning your MSP as a trusted one-stop shop.
- Bottom Line Impact
- Faster time-to-market for new offerings and reduced risk of costly mistakes in specialized areas.
- Next Step
- Partner with certified MSPs who have proven expertise in high-demand areas, such as cybersecurity or industry-specific compliance.
How to Mitigate the Risks of Partnering with Other MSPs
1. Quality Control Concerns
Your clients expect a high level of service. If a partner MSP underperforms, it can reflect poorly on your business.
- Key Insight
- Maintaining consistent quality requires clear expectations, SLAs, and frequent communication.
- Mitigation Strategies
- Vet partner MSPs rigorously by reviewing their processes, certifications, and client references.
- Set detailed SLAs that include response times, issue escalation processes, and reporting requirements.
2. Loss of Client Trust
Clients may feel uneasy if they realize services are being subcontracted to another provider.
- Key Insight
- Transparency and client education about the partnership’s value are key to maintaining trust.
- Mitigation Strategy
- Position your partner MSP as a trusted extension of your team. Communicate how this collaboration benefits the client, such as faster service or access to specialized expertise.
3. Revenue and Margin Impact
Partnering with another MSP means splitting revenue or taking a reduced margin, which could impact profitability.
- Key Insight
- Partnerships should increase overall revenue, not erode your margins.
- Mitigation Strategy
- Run financial projections to ensure the partnership delivers positive ROI. Negotiate fair terms that align with your business goals.
4. Competitive Overlap
Partner MSPs may also serve as competitors in the same market.
- Key Insight
- Clear agreements on boundaries and non-compete terms are essential to protecting your client base.
- Mitigation Strategy
- Use NDAs and non-compete clauses when formalizing the partnership to prevent conflicts of interest.
How to Identify the Right MSP Partners
1. Evaluate Service Gaps and Needs
- Identify which services or skills you need to subcontract and ensure the partner MSP specializes in those areas.
2. Vet Potential Partners
- Look for MSPs with strong client references, relevant certifications, and a proven track record of service delivery.
- Conduct interviews to align on processes, capabilities, and values.
3. Clarify Responsibilities
- Define roles and responsibilities clearly to avoid confusion, especially for client-facing interactions.
4. Establish Strong Agreements
- Create written contracts that include SLAs, escalation processes, pricing terms, and non-compete clauses.
5. Test the Partnership
- Start with small projects or short-term contracts to evaluate the partner MSP’s quality before committing to larger collaborations.
Companion Checklist: Evaluating a Potential Partner MSP
1. Does the Partner MSP Have Expertise in the Service Areas You Need?
- If Yes: Proceed to verify certifications and client references.
- If No: Look for alternative providers who specialize in those services.
2. Are the Partner MSP’s SLAs and Processes Aligned with Your Business Standards?
- If Yes: Formalize roles and responsibilities in a written agreement.
- If No: Work with the partner to align expectations or reconsider the relationship.
3. Can the Partner MSP Provide Consistent Quality and Response Rimes?
- If Yes: Consider starting with a test project to confirm.
- If No: Identify areas of concern and seek clarification before moving forward.
4. Is There a Risk of Competitive Overlap?
- If Yes: Include non-compete and confidentiality terms in your agreement.
- If No: Proceed to the next step.
4. Are Both Sides Clear on Revenue-sharing and Financial Terms?
- If Yes: Finalize the partnership contract.
- If No: Renegotiate terms to ensure fair margins and ROI.
5. Did you Test the Partnership with Smaller Projects First?
- If Yes: Use the results to evaluate scalability.
- If No: Start with a smaller engagement before committing long term.
Conclusion
Partnering with other MSPs can be a strategic way to expand your offerings, overcome resource constraints, and scale operations. However, success depends on choosing the right partners, mitigating risks, and maintaining quality control. By following the strategies in this guide and using the companion checklist, you can build strong, profitable partnerships that benefit your clients and grow your MSP business.
Next Steps
- Want more helpful guidance? Check out our Strategic Partnerships Answer Center.
- Have a question for our experts? Send it to editors@channelpronetwork.com
ChannelPro has created this resource to help busy MSPs streamline their decision-making process. This resource offers a starting point for evaluating key business choices, saving time and providing clarity. While this resource is designed to guide you through important considerations, we encourage you to seek more references and professional advice to ensure fully informed decisions.
Featured image: DALL-E
