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Services-led Partners Driving Twice The Gross Margin Vs. Product-led Peers

‘All these big MSPs are starting to have two-thirds of their revenue being services-led because you double profitability compared to the traditional resale model,’ said Bob Skelley, CEO of The Channel Company at XChange 2019.

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The Data Behind The Profits

Services-led solution providers are seeing more than twice the gross margin compared to their counterparts who are still mainly focused on reselling products, according to a new research by The Channel Company. Being a services-led solution provider is now the key ingredient to driving higher gross margins and stickiness with the customer.

“All of these big MSPs are starting to have two-thirds of their revenue being services-led because you double profitability compared to the traditional resale model,” said Bob Skelley, CEO of The Channel Company during XChange 2019.

The Channel Company’s IPED Consulting group conducted surveys of more than 500 solution providers along with dozens of qualitative interviews to on the state of partner profitability in 2019. The survey also delved into what services are driving the highest margins as well as solution providers’ biggest challenges and investments this year.

Here are the eight biggest findings in the eye-popping solution provider survey.

 
 
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