3 Ways to Make BCDR Your Most Profitable MSP Offering

Managed Service Providers (MSPs) often take on vendor after vendor to satisfy disparate client needs. Before you know it, you’re putting forth more effort, resources, and costs to manage vendors, than you are providing value to clients. In fact, of the 82% of MSPs that offer backup, 78% use more than one backup provider. With a modern, comprehensive business continuity and disaster recovery (BCDR) solution, MSPs can meet client needs, expand their business, and elevate service delivery.

In a recent Axcient MSP Roundtable, Luis Alvarez, President and CEO of Alvarez Technology Group, and Neil Hawkins, Partner and COO at LANAIR Technology Group, discussed three strategies for making BCDR an MSPs’ most profitable offering.

1. Consolidate vendors

More vendors means more vendor management. And more vendor management means technicians have to learn a variety of different processes for billing, support, deployment, recovery, and so on. With each additional vendor, you’re requiring a particular level of expertise from your techs, which means higher salaries. Onboarding takes longer, it’s hard to build a relationship with any one vendor, and each solution has to be marketed individually. All in all, you’re juggling a lot and it can be frustrating, expensive, and all-in-all, not worth it.

LANAIR Technology Group, an MSP headquartered in Los Angeles and founded in 2006, found themselves with 25 different backup vendors at one point. Neil says, “…we were spread too thin. You can’t focus on any vendor or product. There’s different training plans, different product support, compression is different, retention is different, and they all do different things. We wonder how we did it at 25.”

Now down to seven vendors, LANAIR is experiencing the benefits of a simplified stack. Neil explains, “It solidifies our training plans and what we’re doing within data sets. It definitely helps us optimize our staff for ourselves. Utilization or realization, is pretty difficult to accomplish when you have to pull things into a centralized service and management team, and you’re running across separate vendors – so our focus now is focus.” LANAIR continues to move toward standardization with the goal of just one or two backup vendors.

2. Work with the right clients

During the first years of business, many MSPs follow the saying, ‘any business is good business.’ You take on any technology or project just to get revenue in the door. You might survive that for a while – although many don’t – but after a couple years, you’re drowning in management costs, client demands, maintenance, and multiple SLAs. Trying to be everything to everybody doesn’t typically work, but it can also be nerve racking to turn business away. Luis and Neil see the value in being picky with your clients to keep profits steady.

Alvarez Technology Group in Salinas, California, has been in business for 20 years, primarily servicing the California agriculture industry. After a negative experience with a $10,000 per month client – where the CEO abused techs on the phone, called at all hours, and complained constantly – Luis made the tough decision to end the contract and reevaluate the clients they target. Luis says, “It really showed my team that I stand behind them. That they’re as important to me, if not more important, than our clients. So we’re choosy about taking on new clients.” Since then, Luis and his team have built a prospect profile and evaluation tools to make sure the relationship will be productive for both sides.

For LANAIR, it wasn’t demanding clients, but SLA sprawl that motivated Neil to set standards for, and expectations with clients. After eight years, LANAIR discovered they had a different SLA for every client. Organizationally and operationally it was a nightmare, so they went to a one-SLA system for all clients. Neil says, “We really set our focus to say, what’s the right client for LANAIR? Is it the right technology? Can we support it effectively? Does it fall in our supported vendor list? And if not, we have that conversation with the client. So during onboarding, they’re either switching technology, or we don’t take them on as a client.” Vetting clients based on what’s best for LANAIR as a whole, rather than high margin potential, allows for maximum growth with minimum output, while increasing value for clients.

3. Leverage regulation and compliance

Rising ransomware attacks, MSP liability regulations, and compliance requirements, are causing SMBs and MSPs to see data protection and cybersecurity as one in the same. Luis says a new emphasis on preventing data loss is coming from his clients’ customers. After seeing supply chain attacks, like the SolarWinds breach, companies are realizing the impact of an unprotected supplier – and they’re putting the pressure on. Culpability for company data loss and the ripple effect it has on customers, brand, costs and penalties, is making BCDR an important part of gaining competitive advantage.

Luis takes the same approach to vetting potential clients. “If we’re not satisfied that you’re taking business continuity and cybersecurity seriously, then we’re not going to do business with you. We can’t risk our reputation, and our business based on you not doing the things that you need to do.” Luis includes Axcient x360Recover for BCDR with his standard contract in order to keep his clients and business safe. If prospects aren’t ok with that, Luis tells them, “it’s not a good fit right now, but when you’re ready for us, we’ll be ready for you.”

Prioritizing BCDR to prevent data loss isn’t just the right thing to do, it increases margins. Luis standardized on Axcient x360 and makes a minimum of 35% gross margin on his Axcient stack. “Typically though, it’s closer to 50% because we bundle local and cloud backup into all of our managed services agreements,” explains Luis. This way, if a breach does occur, Alvarez Technology Group can restore the data and keep business moving almost instantly. Without these built-in protections, clients blame MSPs when irretrievable data loss occurs, the relationship sours, and the MSP can get a bad reputation in the industry.

One Platform for MSPs to Protect Everything

As a 100% MSP-focused solutions provider, Axcient designed the multi-tenant x360 portal to cover all your backup needs under one unified roof – BCDR, cloud to cloud, and secure file sync and share. With a single pane of glass, MSPs significantly lower operational costs with streamlined support, training, onboarding, billing, and pre-built marketing campaigns. Feature-rich solutions, including hardware-free BDR, safeguard against data loss; automate repetitive, low-value, and manual tasks; while meeting industry standards and regulations. Learn more about how Axcient is curing data loss in the links below, and start your Free 14-Day Trial today.

Liz Mellem

About the Author:
Liz Mellem // Technical Copywriter, Axcient

Liz Mellem has been a freelance copywriter for over three years in the technology, education, and alternative medicine industries. She produces content, sales collateral, and email marketing campaigns that contribute to digital marketing strategies for sales growth and brand awareness. In her free time, Liz enjoys reading, exploring Austin, and Netflix with her cat, Harlem.