The Final Cut: Moving Beyond The Managed Service Provider Model

Paul Franks couldn't be happier that he sold his managed services business last year and is now building a recurring-revenue-based risk management firm that is connecting with CEOs.

"I am loving this," said Franks, co-founder and CEO of ThinkGard, a Pelham, Ala., services company specializing in disaster recovery and business continuity planning.

"As an MSP we were viewed as a vendor that could be replaced tomorrow. Businesses looked at managed services as a commodity. Anybody and everybody was calling themselves an MSP. As a risk management company, we are talking to CEOs and CIOs who are willing to spend money to protect their data. It is like an insurance policy. What we do at ThinkGard is show them how we can protect their data and it is pretty much a done deal."

[Related: Solution Provider Panel: The Key To Recurring Revenue Is Depth Over Breadth]

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ThinkGard is one of a number of companies that has pulled out of the MSP market and is building a growing recurring revenue services business from next-generation cloud-based SaaS vendors. In this case, ThinkGard is building that recurring revenue model with Datto, a fast-growing cloud-based backup, disaster recovery and business continuity provider, as its mainstay partner. Datto CEO Austin McChord, one of CRN's Top 100 executives in 2014, built the company from the ground up as 100 percent channel committed.

You would never know that ThinkGard is a Datto partner from looking at its website, however. That's because ThinkGard is ¬first and foremost a risk management services company. What is resonating with CEOs is Thinkgard's risk management knowledge. Specifically, ThinkGard evaluates the risks associated with a customer's current business and technology environment and then pulls together a full-scale disaster recovery plan followed by disaster testing. "We're kind of like Superman," said Franks. "We are there to protect a customer's data on a daily basis. We can't do that unless we have business processes and procedures in place to protect them."

"Superman" is a good analogy. The business model Franks is building is bulletproof. It's a services-based consulting model combined with a recurring revenue cloud-based SaaS offering.

Of course, building a risk management recurring revenue business will take time. Franks says he is "blessed" that the sale of his MSP business has given him the freedom to "build this business slowly and build it right." He is aiming to have $1 million-plus in recurring revenue in three years.

One great example of the power of the ThinkGard model: a customer that was hit by the Cryptolocker ransomware virus, which encrypts data and demands a ransom payment. ThinkGard was able to restore all of the data impacted by the insidious virus in 30 minutes. Needless to say, the client could not have been happier. "It's that kind of feedback that makes me feel when I go to bed at night that I am truly helping my customers solve a problem," said Franks.

It's a far cry from the MSP model, which will have to adapt to the next-generation cloud computing services reshaping the marketplace.

BackTalk: Do you want to get an MSP monkey off your back? Let me know. Contact Steven Burke at [email protected].