How to Make BCDR Solutions Your Most Profitable MSP Offering
As a Managed Service Provider (MSP), you likely 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 business continuity and disaster recovery an MSP’s most profitable offering.
1. Consolidate vendors
More vendors equal 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 require a particular level of expertise from your techs, which means higher salaries.
In addition, onboarding takes longer, it’s hard to build a relationship with any one vendor, and you need to market each solution individually. All in all, you’re juggling a lot and it can be frustrating, expensive, and frankly, not worth it.
LANAIR Technology Group, an MSP headquartered in Los Angeles and founded in 2006, found themselves with 25 different vendors at one point. Neil says, “…we were spread too thin. You can’t focus on any vendor or product. There are 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.”
Since reducing 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, but after a couple of years, you’re drowning in management costs, client demands, maintenance, and multiple SLAs. Trying to be everything to everybody doesn’t typically work, but turning business away can also be nerve-racking. 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.
“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,” Luis says. Since then, Luis and his team have built a prospect profile and evaluation tools to ensure 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. It was a nightmare, organizationally and operationally, so they went to a one-SLA system for all clients.
“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,” Neil says. 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.
Being more selective when qualifying new clients will help you recognize the verticals you serve best. Such insight is enormously valuable as it lets decision makers within the organization know which MSP service offerings to expand and which services to consider scaling back. For instance, managed service providers that gravitate toward banking and credit union clients will have a portfolio of service offerings that look vastly different from an MSP that deals primarily with clients in the energy production and distribution industry.
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 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. Today’s businesses have zero tolerance for data loss. As a result, they are actively deploying battle-tested BCDR solutions to gain a competitive advantage over others who fail to take threats, regulations, and compliance seriously.
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 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.”
Businesses are quickly realizing that the right BCDR solution not only ensures peace of mind regarding regulatory and compliance requirements, but may also increase 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. In turn, 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.
We’ve designed our feature-rich services to provide state-of-the-art, cloud-based and on-premises BCDR solutions that safeguard against data loss and 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 14-day free trial (no credit card required) today.
- Discover How Entech Increased Margins and Reduced Vendor Management by Partnering with Axcient
- Axcient x360Recover Adds Direct-to-Cloud and Virtual Office for Hardware-Free and Self-Managed BCDR
- Axcient AirGap Proves Tried and True at Protecting SMBs from Ransomware
- AutoVerify: 5 Benefits to Automatic Backup Verification
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