For Some MSPs, RMM Providers Are A Clear Path To Better Service, Business Focus

Are managed service providers that outsource network management to vendors better-positioned for success than IT firms that keep support capabilities in-house?

While there's no one-size-fits-all answer for the channel, solution providers employing the remote monitoring and management (RMM) approach say they've seen tangible improvements in both internal productivity and the quality of service offered to clients.

"It's far more efficient," said Mike Abbott, president of Raleigh, N.C.-based First Service Carolina. "Because it's automated, it's always on and always self-verifying. It does a better job of watching a client's network than a live person could, no matter how good their skills. (Engineers) can't press refresh all day long."

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Most MSPs, however, are choosing to handle the heavy burden of round-the-clock network monitoring and maintenance themselves.

Only 17 percent of MSPs worldwide use an RMM provider, according to data obtained by Service Leadership, a financial and operational benchmark firm that offers consultation services to MSPs and other solution providers. In a study of MSPs that do rely on RMM platforms, however, Service Leadership found that 55 percent are more likely to continue working with an RMM vendor in the future. By contrast, just 5 percent of the respondents felt they would be less likely to keep up the relationship.

Service Leadership CEO Paul Dippell highlighted data revealing that the average $4 million MSP has 20 employees, and 12.6 of them are infrastructure services staffers. By turning services responsibilities over to an RMM provider, or a "master MSP" in his words, Dippell said MSPs can trim about 10 IT employees from their payroll and drastically reduce overhead.

The data was supplied to CRN following a Service Leadership study of 140 Continuum MSP partners, funded by the Boston-based vendor, that sought to compare the financial success of those companies with MSPs that do not rely on an RMM provider. The results clearly favored the service providers who used an RMM provider, explained Dippell, who said that Continuum partners' adjusted EBITDA figures were 7 percent higher than non-Continuum MSPs over a five-year period.

"When I look at 140 guys and I see this kind of difference, my recommendation to those management teams that are not using the master MSP would be, you should look at this," Dippell said. "It's not a silver bullet. It's not a guarantee of success. It's still going to come down to how well you execute. But I will tell you something's going on here."

Los Angeles-based Pink Hat Technology Management, one of the 140 Continuum partners to participate in the survey, managed to trim high personnel costs by relying upon an external team of technicians. CEO Joy Beland said she has been able to avoid losing IT staffers to competing MSPs, as well.

"In L.A., (employee turnover) is pretty bad. I haven’t experienced it yet," Beland told CRN. "My colleagues who have great teams more and more are calling me to say, 'Can you believe so-and-so stole my technician?' It's terrible."

A natural point of hesitation for MSPs considering this type of partnership is the effect of splitting margins with the vendor, said Dippell, and whether the loss of that margin would outweigh any personnel-related cost savings. But solution providers cite additional benefits beyond an ability to maintain smaller IT staffs.

Beland said the round-the-clock NOC support has given the Pink Hat team additional time to work on large client projects. The lack of business interruption during major migration or upgrade projects is another key benefit of the software, she said.

For First Service Carolina, another Continuum partner which aims to provide a "higher level of technical competence" to small and mid-sized businesses, Abbott said vendors that actively handle the troubleshooting and maintenance of their platforms make the strategy worth it. In the past, Abbott remembers being forced to dedicate a full-time employee to managing the RMM platform behind the scenes.

"That just seemed like a waste," he said. "We don't need to be loading drivers; that stuff needs to auto-discover. The actual operation of the tool, it should be fixed by the vendor."

On top of that, First Service Carolina can afford to utilize engineering talent on more difficult or complex projects that warrant one-to-one client interaction. Their valuable time isn't eaten up by routine tasks, such as ensuring threat software definitions are up-to-date or that service patches have been installed.

Abbott also finds himself better able to concentrate on "core business objectives" and take a more proactive approach with an RMM platform in place, which he said in turn allows his company to establish strong client relationships that produce value over a longer time frame.

Status Pros CEO and founder Lucas Wellman, whose company is partnered with NinjaRMM, maintains a zero-infrastructure philosophy. The San Ramon, Calif.-based IT services provider is entirely cloud-based and in the process of building its on MSP solution set based a sizable set of vendor tools, including Ninja's RMM platform.

"I've seen a lot of RMM solutions come and go," Wellman said. "You get this stale, very complicated puzzle piece and you're trying to figure out what you're doing as a company. That's what you would expect. You have to figure out how products work within your business model."

Another key factor that growth-minded MSPs take into count when RMMs that can fuel MSP growth is the scalability they enable. Ollie Strickland, managing member of Atlanta-based Bitstream Consulting, said that as an MSP's client list grows, RMMs offer an affordable, efficient avenue to monitor potentially hundreds of thousands of network nodes.

"You might pay somewhere between $1-2 per month, per node, but the time saved is worth many multiples of the cost. You wouldn't be able to scale your business otherwise," he said.

Communicating with a client that requires troubleshooting also becomes less clunky, Strickland said, because the info a technician needs to assess a situation is already made available.

The data collected by Service Leadership, which was later shared with Continuum partners, gave some of those RMM-reliant MSPs partners a certain sense of validation. Beland called the study results "surprising," and yet at the same time wonders why she felt that way at all.

The bigger question is whether MSPs who handle the heavy lifting in-house will consider the alternative approach.

"It's hard to believe," Abbott said upon hearing that 17 percent of MSPs use RMMs. "Being in business for 26 years, we've been focused on client service from the very beginning. The various hardware replacement cycles and all of those business models, the lowest-priced models, they've all come and gone while we maintain their focus on uptime. That's been a model that's worked very well for us."