MSPs Get Serious About Selling Their Services To The Channel

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After years of relentless pressure from peers, the media and vendors to quickly and expensively convert to managed services or die, many VARs found themselves testing and scrapping any number of MSP models.

But a funny thing happened along the way. As the space has matured, established MSPs have found more traction to sell specialized IT management services to their peers. With the infrastructure and expertise in place to provide proactive, remote IT management to business customers, MSPs like ClearPointe Technology, Do IT Smarter, Synergy Global Solutions and InCompass IT have packaged their services for other MSPs, VARs and distributors to resell.

The value proposition for channel partners is simple: You focus on the customers, we'll focus on the service.

Call it the cure for the pain of pouring time and money into building a network operations center (NOC) and service desk, said ClearPointe CEO Jeff Johnson. In April, Little Rock, Ark.-based ClearPointe became the first MSP to earn accreditation from the MSP Alliance for a third-party NOC.

"I talk to new MSPs who tell me, 'Look, I can't be a NOC and sell these services at the same time. My guys are waking up at midnight and answering service tickets.' It's more than they bargained for and it's more than they can handle or want to handle," Johnson said.

Do IT Smarter CEO Don Begg concurs, adding that needs vary among resellers looking to offer managed services.

"We have a number of point solutions. Our big offering is kind of like a franchise approach with a full package of services. But some companies just want us for the help desk because they can already do remote monitoring. Other resellers want the full package," Begg said.

For Charles Weaver, president of the MSP Alliance, a trade association that provides accreditation, training and other services, the concern is that resellers that outsource too much for too long won't benefit in the long run.

"The pros with outsourcing are that the young MSP can really enter as an apprentice, if you will, into a new business model without having to invest a lot of time and money. In the old days, lawyers would read law for years with an older lawyer. I see a lot of similarities here," Weaver said.

But at some point there has to be a departure, said Weaver: If you're only a reseller there is no appreciable increase in your profit margin because you don't take on any of the risk. "You've got to spread your wings," he said.

Begg understands the concern, saying that resellers of his SilverBack Technologies-powered NOC and help-desk services can treat their relationship with Do IT Smarter as a path to their own in-house MSP offering.

"We can either be a stepping stone or we can be an end solution. If you look at a Zenith Infotech, they have solutions similar to what we do—outsourced NOC, help-desk capability. But the reseller who's with us, if they decide they want to implement their own NOC but want to continue to leverage the SilverBack tool, we'll help them migrate over and we throw the business back to SilverBack," Begg said.

Gavin Garbutt, CEO of MSP platform vendor N-able Technologies, calls selling outsourced services "an opportunity-filled area of growth for entrepreneurial MSPs," but cautions sellers to get the legal side down pat.

"Our licensing doesn't allow for [outsourcing N-able-powered NOCs], but we've had partners ask us if they could amend the contracts to do third-party sales of N-able to resellers. And we're very interested in doing that, but we want to make sure the SLAs are in place," Garbutt said.

Next: A Vendor Or MSP?

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