At MSP Alliance's Spring Conference last month the organization released its predictions for the managed services market. According to its research, in 2015 the managed services market in North America will account for $154 billion in sales.
This spells out one thing for channel partners: Profit.
With managed services (or outsourced IT), an organization outsources one or more components of its IT functions to an external provider. The MSP, or managed services provider is responsible for the security, updates, and operation of the technology. Managed services can include a broad range of functions such as outsourced help desk, desktop management, cloud computing, disaster recovery, and more.
According to MSP Alliance, the number one reason businesses utilize a managed services provider is because it enables them to focus on their core business. In addition to freeing up the organization's IT staff and allowing them to focus on more strategic initiatives, outsourcing IT functions to an MSP also ensures that newly installed technology is overseen by a knowledgeable team that doesn't need to be trained on the company's own time and dime.
If you haven't yet entered the managed services market, here are five reasons you should start selling managed services:
- It will open more doors.
Imagine you have been trying for months, maybe even years, to get in the door of a certain organization. For whatever reason, they are not interested in your product or service. By adding managed services to your portfolio, you are creating the opportunity for a new conversation. It allows you to stop banging on the door you've been trying to open (the door that refuses to budge), and instead try a different key.
- It will help you sell more strategic solutions in your portfolio.
Perhaps your customer has been contemplating disaster recovery, but hasn't made the investment because he's afraid it's too heavy a load to manage. The way he sees it, why should his organization make an investment in technology, no matter how valuable, if he knows he doesn't have the manpower or expertise to take advantage of it? With managed services, your customer can make technology investments that will drive his business to greater levels of success without taxing his already overburdened IT staff. This makes a strategic technology investment not only less intimidating, but also more likely to yield a significant return.
- It will diversify your portfolio.
The technology industry is ever-changing; that fact is indisputable. The best way to reduce your risks and secure your success in this environment is to diversify your portfolio. Think about this: if the majority of your sales come from a single service with a single provider, what happens if that provider goes under? Or is acquired by a different organization? Your income may be put at risk. You should structure your business portfolio the same way you structure your financial investments: by diversification. That way, if one of your revenue streams becomes jeopardized for any reason, you will have a variety of other resources keeping your income stable.
- It will increase your profits.
According to Doug Deetz, Senior Vice President of managed services provider JMARK Business Solutions, channel organizations that sell managed services generate five times more revenue than those that don't. Managed services have higher margins than traditional telecom services so deal for deal, you will increase your profit by selling them.
- It will give you more time to make sales and close deals.
On average, a traditional channel company (one that primarily sells cable services and carrier circuits) can spend up to 70% of its time on post-sales customer support solutions, says Deetz. Though it is unquestionably necessary to keep your customers happy and make sure the technology you've sold them is operating correctly, this support in and of itself is not revenue generating. Instead, this is the problem-solving effort that you would be expected to put in after a sale is made. In contrast, with a managed services solution, you spend no time on post-sales support. By definition, the solution is a low maintenance one because the customer service support falls under the responsibility of the managed services provider. This leaves you with more time to close deals, make money, and grow your business.
All signs point to the managed services market being one that is ripe for opportunity both in and out of the channel community. To learn more about adding managed services to your portfolio, contact your TBI channel manager or email us at firstname.lastname@example.org.
About the Author
Adrianne Burgher is a Marketing Manager at TBI. She develops strategic programs to cultivate leads, enhance agent and service provider relationships, and help propel sales. You can contact Adrianne at email@example.com or connect with her on LinkedIn.