Recession Beater: masterIT's Best Year Ever

At a time when roughly 10 percent of North American MSPs are falling off the map, masterIT is on pace to have its most profitable year ever, according to Chairman and CEO J. Michael Drake.

Matthew Weinberger

October 20, 2009

4 Min Read
Recession Beater: masterIT's Best Year Ever



At a time when roughly 10 percent of North American MSPs are falling off the map, masterIT is on pace to have its most profitable year ever, according to Chairman and CEO J. Michael Drake. As part of our ongoing look at MSPmentor 100 companies, here’s an update on masterIT’s evolving business — including a strategy that gives customers 90 days to get hooked on managed services.

We’re careful not to suggest that all MSPs are thriving in this challenging economy. During the recent N-able Partner Summit (Oct. 14-16, Arizona), attendees estimated that roughly 10 percent of MSPs had imploded this year. In stark contrast, Drake says masterIT is on pace for a record year.

Fast Facts

We checked in with masterIT just as we’re launching our third-annual MSPmentor 100 survey. masterIT landed on both of our previous MSPmentor 100 lists.

masterIT specializes in so-called “IT as a Utility” — including such services as:

  • Hardware as a Service (this video with Drake describes the HaaS effort);

  • Remote management and maintenance services;

  • disaster recovery consulting; and

  • a 24/7 end user help desk at a flat monthly rate to their clients, which tend to be 20- to 200-person businesses.

masterIT recently rolled out their first cloud application, a browser-based version of their RMM platform’s client. But what really made 2009 a banner year for them, Drake says, was setting their focus on the business itself.

90 Days to Score

The economic crunch has forced managed service providers and their clients alike to stop and think about what they spend. Trying to stay one step ahead, masterIT unveiled a 90-day program trial, aimed at companies which Drake says “had a hard time making decisions.”

During the 90-day program, masterIT consultants put together a network assessment as if they were an in-house IT department, making recommendations and providing support.

Midway through, they present their findings and determine what to do next. If, at the end of this trial period, the client feels like they’re not getting their money’s worth, or if the masterIT team feels the client is unlikely to take their recommendations, either side can walk away from the deal.

“If at the end of the 90 days, you don’t think we’re a good fit, you can walk away,” Drake says. “[But] we’ve lost very few after we signed as 90-day clients.”

Hunters vs. Farmers

Meanwhile, 2009 saw a realignment of masterIT’s sales force, where some became “hunters,” finding new clients for masterIT, and others “farmers,” maintaining good relationships with existing customers and finding new ways to do business with them.

masterIT also outsourced their own help desk to Ingram Micro Seismic, realizing that it was cheaper and more efficient to have a system where tickets get escalated to a few people at masterIT than to have a large team on call at all times, a move that’s decreased overhead significantly.

Also of note: masterIT in late 2008 joined True Profit Group, an MSP peer group that Drake says really helped transform their business and help with decision making. Any managed services provider looking to improve their business practices would do well to join such a group, he said.

“It had a dramatic impact on the growth and profitability of our business,” Drake says.

Reality Checks

Still, it all sunshine and roses for masterIT this last year. Even as they focused on their business, masterIT needed to take a closer look at emerging IT trends.

“We probably didn’t move quickly enough to anticipate the needs of services we need to be offering,” Drake says.

Drake is also striving to ensure masterIT doesn’t suffer from the commoditization of its services. A prime example: One of the company’s four core competencies is a “very robust business continuity/disaster recovery” practice. “We feel we have to provide the service, but with the commoditization of the service, we are evaluating whether to keep investing or partner with a provider who only delivers that service,” says Drake.

Not providing some sort of remote back up would be like a dentist who says he does not clean teeth, quips Drake.

Drake also regrets not communicating better with their clients, to “better understand how technology can better support those companies.”

Despite those challenges, plenty of MSPs would welcome masterIT’s business performance.

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