Moving from VAR to MSP? These 3 Tips Are a Must
The value added reseller (VAR) business isn’t what it used to be. Competition on pricing is intense, and profit margins have become paper thin. As a result, some VARs are looking for ways to diversify their offerings and generate new revenue. For many, that means delivering managed IT services.
Managed service providers (MSPs) provide the ongoing monitoring of their customers’ IT environment for a monthly fee, or MRR (monthly recurring revenue). For VARs that are used to one-time interactions with clients, this is a very different model. As such, the transition over to the proactive business of managed services can seem like a challenge. However, the benefits of moving from VAR to MSP really do speak for themselves. If you’re debating making the switch, we’ve provided a few tips to help you out along the way:
- Craft a clear pitch: Transitioning your existing VAR customers over to MSP with you is not always easy. Start by identifying customers that you do a lot of business with and pitch them on the idea of managed services. Education is essential when it comes to selling managed services. Businesses with in-house IT staff, or those that rely on break-fix type support, may be completely unaware of the managed IT services model. It’s essential to explain the managed services concept in very straightforward terms.
- Choose your tools wisely: Beyond developing the right mindset to deliver managed services, you’ll also need some new technologies. Remote monitoring and management (RMM) and professional services automation (PSA) tools are considered essential to properly deliver managed IT services. RMM tools are designed to monitor your clients’ IT systems and report on performance. RMM software also allows you to remotely trigger management tasks—such as patching or other software updates. PSA software is designed to keep track of client projects. These tools are essential for delivering IT as a service.
- Standardize your solutions: Standardization allows you to develop expertise on technologies that you use—reducing the time and effort necessary to deploy and manage them. Many tech vendors offer product-specific education and certification programs. These programs have a twofold benefit. First, obviously, is developing a strong understanding of the products. Second, certification can help build trust with your customers by illustrating your IT expertise.
Making the move from a value added reseller to a managed service provider can be beneficial for anyone looking for more stability. Monthly recurring revenue ensures that there’s money coming in at a predictable rate and reduces the uncertainty that comes along with delivering reactive services. It makes budgeting easier, and allows you to better plan for the future.
If you’re looking for more tips and information, Datto is here to help. In Datto’s eBook: From VAR to MSP, we provide tips from MSPs who’ve successfully moved from the VAR model. This eBook will teach you the best resources, tools for getting started, MSP pricing models for success and more.
Eric Torres is Channel Development Manager, Datto.
Guest blogs such as this one are published monthly and are part of MSPmentor’s annual platinum sponsorship.