Technology Reseller v20 2019

technolog y reseller.co.uk MANAGED SERVICES 33 Datto’s third annual Managed Service Provider (MSP) Metrics that Matter Benchmarking Study highlights the growing requirement for MSPs to be more client-focused and more strategic- minded. Here, Christian Nagele, Director of Datto RMM, outlines five ways MSPs can build longer lasting and more profitable client relationships they act as an extension of their clients’ IT functions, while providing technical advice and implementing ongoing best practices. Service options that help with renewal rates include cloud services (cited by 20%), project-based and professional services work (16%) and diversification of product offerings (15%). MSPs that sell next-generation devices see managed power, video monitoring and digital signage as good sources of new revenue. 4 To provide the best client experience, MSPs must always be improving. One in three growing MSPs said improving service desk processes, performance and automation capabilities led directly to an increase in recurring revenue; 29% reported that improving service technician performance contributed to growth. MSPs instinctively understand that operational efficiency is key, yet only 35% measure billable resource utilisation, which gives insight into process efficiency. By not measuring it, MSPs could be missing opportunities to improve processes to avoid downtime, which negatively affects profitability. 5 Deliver as promised. As MSPs strengthen relationships and provide more services, they require a plan to manage 1 Client relationships are everything. Two thirds (68%) of MSP respondents with rising renewal rates cite client relationships as the driving factor. While this is excellent news, the data also shows significant room for improvement when it comes to acting in a more advisory/ consultative role; delivering on service- level agreements (only 21% measure overall SLA performance); and maintaining high client satisfaction rates (just 31% regularly measure client satisfaction). 2 Understand and speak the language of your client’s industry/business focus. Some degree of specialisation enables an MSP to advise clients properly on the best options and outcomes for their business. Not all vertical industries face the same technology challenges and the ability to recommend the right solutions for each client’s specific requirements is essential. This advice, combined with knowledge of cutting-edge solutions for data security (cited as a top client concern by 47%), is important in a technology landscape riddled with new and sophisticated security threats. 3 Add new revenue streams and service options. Managed services are a key contributor to renewal rate growth: 32% of MSPs report increased renewal rates when and scale growth so that they always deliver and meet client SLAs. Clients need to know they can rely on their MSP, and MSPs that consistently meet SLAs can look forward to a 45% increase in renewal rates. MSPs that focus on building and sustaining strong client relationships have a distinct competitive advantage. Regular communication with clients (including face- to-face meetings) to review performance, proactively address issues and discuss strategic technology recommendations help build trust, give clients the confidence they need to make informed decisions and enable MSPs to show they truly understand their clients’ business needs. The best MSPs consistently ask for feedback from clients about what’s working and what needs improvement, and this two-way dialogue positively contributes to a lasting relationship. If an MSP wants to be seen as a trusted partner or advisor and not just a break/fix provider, and benefit from the increased revenue that that brings, it’s important they focus on relationships, deliver to promise, provide managed services, improve internal efficiencies and offer new solutions and service options. www.datto.com/uk From break-fix to trusted advisor MSPs that sell next-generation devices see managed power, video monitoring and digital signage as good sources of new revenue Datto’s third annual State of the MSP Report, based on a survey of more than 1,600 MSP partners around the globe, showcases the continued evolution of the MSP industry. n Recurring revenue growth. IT service providers are adjusting their business model to include more managed services and more recurring revenue: more than 80% said recurring revenue made up a proportion of their revenue; for 44% of respondents, recurring services account for more than 50% of revenue; n Industry specialisation. As they take on a more strategic role, MSPs recognise the value of having expertise in specific industry sectors: 56% of MSPs specialise in services for a particular industry, with healthcare the most popular choice for the second year in a row, followed by finance and legal. n Recruitment challenge. To keep pace with growth in managed services, 84% of MSPs plan to take on more staff in the next 12 months. MSPs in Europe cite hiring as their number one pain point. Almost half (45%) believe it will be harder to recruit new talent this year. n Industry pain points. For MSPs worldwide, the top pain points are marketing and sales (44%), work/life balance (38%), revenue growth (33%), ransomware/cybersecurity (30%) and hiring (30%). Of least concern are customer churn (6%), competition (9%), compliance/data privacy (13%). n Top products and services . The most common products and services offered by MSPs are help desk (87%), networking (84%), productivity software (79%), business continuity and disaster recovery (75%) and virtual infrastructure (71%). Visitourblog: www.datto.com/blog Datto’s2019 State of the MSP Report Report Followuson: The full report can be downloaded from datto.com/uk. Key trends