A Struggling MSP Finds 247% in New Revenue Growth

Jeff Gilbert found himself in a difficult predicament a couple of years ago. “Hardware margins were shrinking, IT was moving to the cloud, and it was getting harder and harder just to remain flat,” says Gilbert, CEO of Verve Networks, a managed service provider (MSP) specializing in BDR, cloud computing, network care and virtualization.

As an Ingram Micro SMB Alliance partner, Gilbert interacted with several other IT service partners faced with the same challenge. After much discussion about the best path to take, these partners found success by working more closely with Ingram Micro and other SMB Alliance partners.

Find out which partnership Gilbert made a serious commitment to, and how it paid off big time: SMART PARTNERSHIP LEADS TO LIMITLESS SUCCESS.

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Take a Metrics-Based Approach to Managed Services Success

Michael Kraner, CEO, Primary Support Solutions

Michael Kraner, CEO,
Primary Support Solutions

One of the recurring themes we see on CloudTalk as well as channel publications like Business Solutions is the struggle IT solution providers go through when getting into managed services. When I first met Michael Kraner, CEO of  managed services provider Primary Support and co-founder and director of MSP consulting firm MSP CFO, I initially wondered if this company was an exception.  The MSP has earned several accolades over the past couple of years, including a top-200 ranking in the 2013 Ingram Micro SMB 500 list (in addition to a top-40 ranking in 2012), a ranking among Inc. magazine’s fastest 5,000 growing private companies in 2013, and the number-28 spot on this year’s CRN Fast Growth list.

Kraner shared with me that there were indeed struggles getting his company to where it is today, and one of his biggest frustrations was the lack of assistance he found early on from CPA firms, which simply don’t understand the MSP business model and the importance of a PSA (professional services automation) solution, which has useful data that’s not captured in QuickBooks or other accounting software.

Once Kraner found the right help and was able to extract the real-time data from his PSA, he was then able to make a turnaround in his business that was so profound that it led to launching another company dedicated to helping other MSPs do the same. You can learn more about Kraner’s success story by reading “A Successful MSP Launches a New Business by Focusing on the Numbers.

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Don’t Miss Ingram Micro Cloud Leaders Renee Bergeron and Dan Shapero at the 2014 Cloud Channel Summit and NexGen Conference & Expo

december-2014-calendar2Mark your calendars! If you’re in the San Diego area December 3-5, don’t miss the opportunity to see Ingram Micro’s top cloud leaders in action. Dan Shapero, Director of Global Marketing, Cloud at Ingram Micro, will join an Executive Roundtable at the 2014 Cloud Channel Summit, while Renee Bergeron, Vice President, Worldwide Cloud Computing at Ingram Micro, will head up a panel presentation at the NexGen Conference & Expo. Both industry events are collocated at the San Diego Marriott & Convention Center.

Jeff Kaplan’s strategic consulting firm THINKstrategies and the company’s service division, Cloud Computing Showplace, are teaming with the Channel Company, publisher of CRN, to collocate the 2014 Cloud Channel Summit with the NexGen Cloud Conference & Expo. The events will provide VARs, systems integrators and other channel companies with valuable information about how to build successful Cloud services.

Dan Shapero will be participating in an Executive Roundtable at the Cloud Channel Summit focusing on “Future Models for Partner Success in the Cloud.” The event will be moderated by Carolyn April, Senior Director of Industry Analysis at CompTIA and will include additional panelists from Reflexion, Swift Chip, and Datto.

“It’s always great to have the opportunity to share the stage with channel peers, to engage with our Cloud Community and to share insights and best practices from my years of experience working in the industry, as well as, from working with Ingram Micro channel partners,” says Shapero.

Reneé Bergeron will be participating in a “Cloud Vendor Executive Panel” discussion on December 4 at the NexGen Conference & Expo. Bergeron, along with executives from IBM, ServiceNow, and Salesforce.com will discuss the Cloud’s impact on the partner ecosystem.

“Whether an attendee is brand new to selling cloud solutions and services or an industry veteran, this panel discussion will help them gain a deeper understanding of the partnering and alliance strategies of today’s leading cloud vendors,” says Bergeron. “This session will also help solution providers align their skills, competencies and investments so they can maximize their sales and marketing strategies.”

If you’re in the area and would like to attend, you can register online here, until end of day Friday, Nov. 28.  For more information on these events, check out www.cloudsummits.com and www.nexgencloudcon.com.

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Are You Acquiring Too Many Profit-Draining Customers?

As a VAR/MSP you want to make all your customers happy and for some solution providers that means making concessions from time to time. In fact, some IT solution providers become so flexible with their solutions and services that it becomes difficult to discern what their standard offering really looks like. Eric Gray, CEO of managed services provider Convergence Networks doesn’t believe in making exceptions, and the way he avoids this profit-draining problem is by nipping it in the bud during the prospecting stage.

Dec BSM Cover ThumbnailLast year, Gray’s company acquired only four new customers and the reason wasn’t for a lack of leads. The truth is there were nearly 40 leads in its sales funnel and 80% of those were warm leads acquired through customer referrals. Plus, when this MSP presents a prospective customer with a contract, it closes the sale 50 percent of the time. All of that means that in 2013 Convergence Networks intentionally KO’d more than 30 prospects. Despite acquiring such a small number of new clients, the MSP experienced 9 percent revenue growth over 2012, and it maintained double-digit profit margins per customer.

The fact is that Gray strictly follows a few time-tested business processes when engaging prospects. For example, a prospect that wants to get into a debate about why its antivirus is better than Convergence Networks’ is likely not going to work out. If a prospect wants to “start out” as a break-fix client, that’s not happening, either. End users who want to challenge the MSP’s pricing are also candidates for the blacklist.

Gray is quick to point out that sticking to these strict standards isn’t based on a pompous, know-it-all attitude. “I’ve learned the hard way that every time I make an exception to these rules, it always comes back to haunt me,” he says. “Additionally, industry regulations in markets such as healthcare, financial services, and hospitality are no longer holding only end users liable for security breaches — IT service providers also are now culpable.”

Gray shared with me some additional insights into his company’s success, such as his company’s commitment to following ITIL standards, which you can read about in my latest feature story, “Say ‘No!’ to Unprofitable Customers,” which will be in the December print edition of Business Solutions magazine and is available online now at BSMinfo.com.

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Secrets of a Successful VAR and MSP Merger

Imagine merging your small managed services practice with a larger VAR business and being faced with the prospect of having 45 customers who are used to paying for IT solutions and services only when something breaks. That’s the situation Jason Brunt, CEO of e3 Technical Solutions, found himself in after joining forces with Rick Carpenter, owner of break-fix IT service company Beyond Development, last year.

Jason Brunt, CEO, and Rick Carpenter, CTO, e3 Technical Solutions

Jason Brunt (l), CEO, and Rick Carpenter, CTO, e3 Technical Solutions

After investing in a MAXfocus (formerly GFI MAX) managed services platform, e3 Technical Solutions was ready for the challenge. “The biggest reason some service providers get pushback when selling managed services is that they fail to explain the value they can deliver,” says Brunt. “Selling managed services requires a consultative sales approach, including conversations about the costs of downtime and lost productivity.”

For Brunt and Carpenter, having these conversations has been the easy part and they’ve been steadily converting customers to the managed services model each month. “Because this is a big change for so many of our customers, we’ve purposely restricted the number of customers we’re approaching and converting each month, to ensure we can fulfill our SLAs [service level agreements],” says Brunt.

Another move e3 Technical Solutions is making during its managed services ramp-up period is developing its help desk center, which now comprises five engineers. “It takes time to hire the right people, and Rick and I both agree that this process it too important to skimp on,” says Brunt. “For example, during our 20+ years of working in the IT business, we’ve come across a few IT personality types that we avoid. The first is the arrogant IT engineer who thinks he knows everything and always talks down to end users. You can’t have a person like that interacting with your clients, plus that type of person can easily poison your other employees.” The second type of person Brunt and Carpenter stay away from is someone who exhibits a self-entitlement complex. “A typical example of this is a person who completes a six-month IT training course at a community college and expects a $65,000 starting salary,” says Carpenter.

Brunt and Carpenter agree that the best way to find good engineers and technicians is through face-to-face interviews and asking questions that reveal people’s motives. “Our current group of employees have come to us through people we’ve had experience with in the past,” says Carpenter. “We have full confidence that, if any of these techs are on the phone or on location, they’re going to provide good customer service.”

Despite its recent growth, the two business partners believe finding the right partnering opportunities will provide additional benefits. “When we come across other IT service providers in our area that we feel have a culture and work ethic similar to ours, we talk to those companies about potential partnering opportunities,” says Brunt. “The truth is that no MSP possesses every IT skill in-house, and partnering is oftentimes the smarter way to acquire a new skill or service.”

To learn more about what e3 Technical Solutions is doing to achieve 100% sales revenue growth this year, check out “Merging Break-Fix And Managed Services” in the December issue of Business Solutions magazine and available online now at BSMinfo.com.

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Overcome Cloud Objections with Education

If there’s one recurring theme I’m noticing a lot more lately — especially with regard to VARs and MSPs who sell to the SMB market — it’s the fact that there are a lot of misconceptions, misinformation, and ignorance that must be overcome before the provider can talk about specific products and services. I recently came across a report released by the U.S. Fire Administration and FEMA on the topic of business continuity planning, for example, which revealed that while 94% of small U.S. businesses back up the financial information stored on their computer systems, 60% of these companies store their backups on-site only. It’s kind of shocking when you think about the risks these businesses are taking.

Jason Bystrak, Senior Director of The Americas, Ingram Micro

Jason Bystrak, Senior Director of The Americas, Ingram Micro

The cloud is another topic that, like the topic of data protection (and very much related to data protection), requires customer education as a prerequisite to selling it. Jason Bystrak, Senior Director — The Americas at Ingram Micro Cloud, addresses this subject this month in an article on SearchITChannel titled “Three principles for successfully selling cloud services.

Here’s a sneak preview of some of the great advice Bystrak shares in his article:

“One of the distinguishing features the MSP is able to talk about is the data encryption and security it provides — which many public cloud providers can’t — and the important role security plays in complying with industry regulations. Business availability is another distinguishing feature. Although many public cloud providers can boast about a cheaper cost per gigabyte, when business customers can’t recover their data in a timely manner, the high price of downtime adds up quickly. Selling a cloud service with a short recovery time guarantee, on the other hand, is a huge value and differentiator.”

 

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The Smart Way to Sell SaaS Email

Help your clients weigh the pros and cons of Exchange in the cloud with these two essential tools.

With Gartner’s forecast for 2011-2017 that cloud spending is expected to hit $250 billion by 2017, and the software-as-a-service (SaaS) market growing to $45.6 billion by 2017, it’s no wonder that everyone is now looking at the cloud for IT answers.

But does the cloud cater to the needs of every organization? And is the answer that simple?

Cost Savings + Efficiency = Exchange in the Cloud
IT research firm Computer Economics says that organizations fully utilizing cloud computing save on average more than 15% in IT spending, whether measured as a percentage of revenue or on a per-user basis. As a result of these economic efficiencies, cloud users are able to devote a higher percentage of their IT spending to new initiatives and less to ongoing support. The cost savings, combined with strategic benefits in speed, scalability, and agility, argue in favor of organizations moving aggressively to the cloud.

Email is a good example of a service that can be easily moved to the cloud. Most organizations tend to re-assess whether they should keep their Microsoft Exchange platform in-house or migrate to the cloud via a third-party service provider when their in-house infrastructure is reaching its end-of-life.

Rather than reinvest in costly servers and other hardware, a company can find a trusted hosting provider and deploy Exchange in the cloud—in addition to a whole suite of applications such as Lync, SharePoint, online backup and more—all for the same price of a new infrastructure (or even less).

Get a Head Start on Selling Exchange in the Cloud
Most businesses are already in the cloud to some degree. Or they’re looking at how to get there. But they’re also looking for providers who can help them leverage all of the cloud’s benefits without the hassle of managing an infrastructure. That means they need reliable and knowledgeable vendors who can offer a solution that’s tailored to their needs.

This opens a wide door for managed services providers to position themselves as the go-to solution for their customers. But to fully capitalize on the SaaS email market, you have to understand its potential, its limitations and common customer concerns. To help, we’ve created a No-Nonsense Guide to Weighing the Pros and Cons of Exchange in the Cloud. It comes with a Total Cost of Ownership Calculator so that you can help your customers easily compare the cost of various options based on their specific needs. These tools will also help you better understand the ROI of each option and scenario.

More importantly, these tools will help you identify the best option for your customers—whether they’re already in the cloud or still using traditional IT services.

Get a head start on your competitors. Download these tools today and position your business in the SaaS market. Latecomers risk missing out on a big chunk of potential revenue.

Interested in becoming a SherWeb Partner? Click here to sign up now.

information LogoFor more information, contact your Ingram Micro Services sales representative.
Call (800) 705-7057, option 5 or 
e-mail.

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