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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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Automation Investment On Rise

Solution providers are spending big time in 2019 on service automation tools in a move to automate as many core activities as possible. This type of investment is allowing partners to scale services practices at a faster pace compared to those who don’t leverage automation.

“If I’m completely relying on finding more technical talent to scale, then I can’t scale quick enough. The core has to be done around automation, then supplemented by staffing,” said Skelley.

Solution providers surveyed said ServiceNow and Salesforce are growing business opportunities as their core automation service to drive their business. “Especially the MSPs that have gone up market and are selling to the larger enterprises and scaling the business,” said Skelley. “The smaller solution providers are still bundling this up and looking at the ConnectWise’s of the world. But as they get to a certain size, they start to look at best of breed.”

 

 
 
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