Moving to Subscription-Based Products/Services: Is it Time?

In my role as a consultant helping MSPs expand their security practice and expanding the managed services they offer in security, the question keeps coming up about the timing of moving to subscription services. We have always sold managed services for help desk, IT support and managing networks, but how can we position managed services for security with an OPEX pricing model?

The good news is the timing is right now. For many reasons, the industry is shifting to this model in many ways, and MSPs can make the move today with support from manufacturers and service providers. Recent announcements from Cisco and Microsoft have set the direction that many security companies have worked on over the last year. Many have built endpoint security; identity access; IoT and IoMT device monitoring; and log management systems in managed service models to provide MSPs with a great platform to convert existing customers to a subscription-based, managed service model.

Endpoint security is a great example of this. Many providers now allow the conversion of existing endpoint security licenses to a monthly managed service, including not only tools and consoles, but also the installation, update and management of the endpoint security software. Many have now incorporated Office 365 email account security into their offerings, making them very attractive to hybrid environments and a robust endpoint security offering.

We have seen this on a regional and national basis with managed services for log management, alert response and remediation being offered to MSPs as a white label service. This has allowed MSPs to jump in without the cost of building a 24/7 managed SOC.

Today, this is a common approach. Customers understand that MSPs can build it all; they accept the structure of white label for these services, and they like buying from one source–a service provider they are comfortable with. With customers looking to outsource more of their security needs because of limited staff and the ever-expanding threat surface in customer network environments, I believe this trend will continue to expand to other products. Customers need many more security products and services to protect themselves, and they can’t afford the capital outlay to satisfy their needs.

VARs and MSPs alike must work on converting their sales compensation to adjust to this new financial model, providing incentives to sales professionals to drive the new MRR model. MSPs can offer to have customers pay upfront options for these services and make changes to compensation models for salespeople, as well as provide sales training to show them how to adjust their mindsets and see how this will be a positive change in the long run.

Ready to take the next step to expand your security practice? Contact Tech Data Security at securityservices@techdata.com.

John Komer has enjoyed a 40-year career in the technology industry. Prior to joining Tech Data as a Solutions Practice Consultant, he spent 25 years dedicated to cybersecurity. John has enjoyed technical roles involving voice and data networks, video, data center and security technologies, designing and installing solutions for customers. John has held roles as a system engineer, sales account manager, global account manager and founder of a security consulting company for cybersecurity after the 9/11 World Trade Center attacks to help the Department of Homeland Security. John is involved in many security technology groups, giving presentations and helping drive vendor involvement in these groups.

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