Markets, Finances and Connection:
How Coronavirus is Impacting MSPs
The rapid requirements, changes and uncertainty around the coronavirus have forced businesses in all industries to be agile, inventive and optimistic. Managed service providers (MSPs) are not only facing challenges in their own business, but their clients’ businesses as well. While the IT services they provide are increasingly necessary and critical to remote work success, clients are struggling to keep up with payments, navigate loan opportunities and keep employees connected.
In a recent Axcient Partner Advisory Council (PAC) meeting led by our CEO, David Bennett and CRO, Angus Robertson, we got an inside look at the MSP perspective on the impact of COVID-19. See how these business leaders are coping with their unique place in the market as service providers, business enablement experts and human beings.
Market fluctuations highlight industry advantages and challenges
MSPs support businesses nationwide and across all industries. With regional stay-at-home orders in place, and remote work for safety taking over much of the country, MSPs are starting to see some clients thrive, while others face questions of survival.
The MSPs in our PAC meeting spoke to the differences in industry. While agriculture and wineries are seeing a boom in demand, businesses that depend on person-to-person contact, like theater support, dental offices, law firms and event services are facing a grave reality. Responses to the loss in cash flow include laying off and furloughing employees, shutting-down for the time being, and a wealth of creative thinking.
One MSP responded to a mass furlough in their area by hiring two of the furlough employees as part-time workers at the MSP. While the furloughed employees receive benefits from the company who had to furlough them, they can receive wages from the MSP. The MSP owner acknowledged that hiring two workers among the 250 who were furloughed doesn’t make a huge impact, but it certainly makes an enormous difference to those two workers and their families.
The PAC meeting participants also discussed the impact of COVID-19 on the stock market. With most expressing optimism as the only way to go, one person pointed to the past. He emphasized that we got through the 2008 recession, and in fact, most MSPs came out on top. Due to increased IT outsourcing at the time, MSP services became more necessary than ever. Now coping with a global pandemic, we’re even more reliant on technology.
Of course, as everyone agreed, we really won’t know until we know. Bigger cities are going to be hit harder than rural areas, but we can’t grasp the full effects yet. Some businesses will have the resources to stay afloat, and unfortunately, not everyone is going to survive. A lot depends on the small business administration (SBA) loans and the government-passed relief fund as well.
Financial instability demands elasticity
One common thread every MSP in the PAC meeting spoke to was finances. Obviously, this is the one absolute in business that’s necessary to keep moving. In general, MSPs are looking to new and existing lines of credit, applying for new loans and even pulling from their own pocket in order to maintain their pre-coronavirus payroll.
Of course, managed services are less effected in times like these due to the nature of their business, but survival is also reliant on clients. One MSP is jugging three-fold increases in service ticket requests that have his engineers working 12 to 14 hour days. At the same time, 60% of his large clients have asked to push payments by 45 to 60 days. In response he’s switched from monthly billing to weekly billing and is considering payment deferrals on a case-by-case basis.
While one MSP copes with the challenges of today, he’s also keeping his eye on what’s coming in the future. As an optimist, he’s looking for the opportunity among the storm. Confident in a market snapback, he wants to be ready. Noting the spotlight on bad MSP service that the crisis may cause, he’s making sure his MSP is ready to pick up the slack when clients look for an upgrade. Preping with value-added content like webinars that speak to productivity at home, and planning with local business groups to deliver similar content, this MSP owner says, “I’m preparing for the short term, but I have more optimism about the mid- to long-term.”
Getting creative to foster connection
One aspect of coronavirus we’re all dealing with is connectedness. It was clear in the PAC meeting that MSPs are putting their employees, and their clients’ employees first. With most everyone working virtually, it’s become a quiet existence and that can be anxiety-inducing by itself, not to mention the global pandemic.
A standout collaboration and conference tool, Microsoft Teams, has enabled many employees to get creative in their connectedness. A virtual happy hour gives everyone the chance to catch-up without a meeting agenda getting in the way. Introduce everyone to your pet, your partner, your family, your favorite houseplant! Sure, these remote enablement tools are meant for business, but if your employees are bogged down by the stress of the times, you’re not going to get the output you expect.
Most MSPs cited regular standup meetings to start and end the day to keep people communicating and up-to-date. Additionally, MSPs are asking employees to be agile in their roles in order to serve the new needs of the business. One MSP is moving their inside sales representative to be a client success manager due to the spike in client needs. The common thread among the MSPs was a focus on hearing and attempting to solve client problems – not selling new products and approaching new leads.
Instead, everyone in the meeting agreed that empathy was the best approach to service. Businesses need help right now to successfully implement and run a remote business without much notice or preparation. To help, MSPs are concentrating on getting the word out about free remote enablement tools, services that can keep their business going, providing solution packages that include everything necessary, and other attempts at truly understanding and serving clients based on their immediate and specific needs.
Axcient is offering free file sync and share and Office 365 backup solutions through June 2020. Learn more about our Anchor and CloudFinder solutions, as well as enabling a remote workforce. If you need anything else, feel free to contact us!
About the Author:
Kaitlyn Langer // Community Marketing Manager
Kaitlyn Langer began her career in technology with Axcient (then eFolder) in 2014. As the Community Marketing Manager, Kaitlyn has been instrumental in building the Axcient partner community and contributing directly to sales pipeline. She is responsible for strategically planning and executing all channel field and community marketing initiatives that drive direct interaction and engagement with the partner community. When not traveling, Kaitlyn enjoys hiking, cooking and a glass of good wine.