What makes a great managed service provider (MSP)?
Sirius Computer Solutions, which placed first in the MSP 501 rankings for the second year in a row, seems to have the formula down pat. The company has grown by leaps and bounds over the last several years, largely through acquisitions. Just a few months ago, the MSP completed its acquisition of Forsythe Technology, an MSP based in Illinois. Like all of its acquisitions, the Forsythe deal expanded its service portfolio, in-house talent and market reach, driving even more success for Sirius in the evolving channel.
But what got it there? What characteristics does Sirius display that grew it into such a powerhouse? To understand, we turned to Mike Conley, executive vice president, managed and cloud services at Sirius, and one of four panelists on a session at this week's Channel Partners Evolution in Philadelphia. “MSP 501 Winners Panel,” part of the marketing and technology conference track sponsored by Cyxtera, Tuesday, Oct. 11, is comprised of four of the MSPs on this year’s list that have demonstrated excellence in business models and growth strategies.
We sat down with Conley to get a sneak peek at the advice and action items he’ll share with attendees in Philadelphia.
This transcript has been edited for length and clarity.
Channel Futures: As No. 1 on our MSP 501 ranking list, Sirius has clearly demonstrated a solid understanding of the channel, where it’s going, and how to navigate change. What is it that you provide that makes you so successful?
Mike Conley: For us at Sirius, a lot of our biggest contracts have come after they've dealt with a huge, global, I call "ticket kicker." A lot of people can go manage infrastructure.
But that isn't how that customer is measured anymore. It's important, but they're measured by the app and how the app performs [for] the business. And the business has options. So MSPs have got to bring big value. The other thing I would tell you is, at Sirius, we don't mess around with our certs. We think the investment in your certification is an investment in your customer having a much better conversation with their auditor. How you have governing, security, and how you manage these things is very important in the eyes of the auditor, and you gotta be able to answer that question.
CF: That may be easier at a company as large as Sirius, but a lot of smaller MSPs are already struggling with dedicating resources to get the certifications their vendors require. What advice would you give these smaller shops so they can build their certifications?
MC: I always say to an MSP getting started, “Don't try to go wide and deep; it will never work. You will gravitate back to the ticket kicker I referred to. Be brilliant at a couple of things and then go to market at those couple of things. That will also dictate, I believe, the certs you need to have.”
But if I [were] small and working in the SMB spot, I would focus. I would not try and do five, 10, 12 things. Remember, people get a managed service, they never look at the contract again. They're going to hold you accountable for level one, two, three support. And you may say, "Whoa, whoa, whoa, whoa, whoa. The contract doesn't say we have to do that." The minute you have to go back to a contract in business, your relationship is dying.
We have become very strategic in that we recognize there are two core fundamental things happening. There's in the cloud and there's on the cloud.
On the cloud is a function of where your workload goes onto a public, private or hybrid stack. In the cloud is what you are running on that stack, [for example], the application. For us, what we do tactically, very, very well, never loses focus, the big macro-evolution, which is that all things, in our opinion, are going to software.
Everything is going to the application. The evolution, and what keeps us relevant, and why we keep doing certain acquisitions where our business keeps growing so nicely, is because we understand when we talk to our customers, we have to make sure they realize we can bring them great value around applications — moving apps, migrating apps, managing that process, running their Amazon instance, running their Azure instance, making sure that we are securing that on the cloud and in the cloud.
CF: Let’s switch gears right now and talk about the unprecedented level of consolidation happening in the IT channel right now. Sirius just completed a massive acquisition of Forsythe. What advice would you give to MSPs looking to be acquired, either for an influx of cash or because they’re looking for an exit strategy?
MC: There [are] a couple of things I always look for. 1) long-term contracts. Forsythe had a lot of long-term contracts. The long-term contract gives you the ability, as the acquirer, to jump in and have a fixed amount of time – two, three, five years – to bring your value, to cross-sell like we talked about earlier, and to absolutely establish yourself as something different than other resellers.
What made [Forsythe] great, and so desirable by folks, was the fact that what we did, we did really well — we were services, we were security, and we could wrap long-term contracts around our value, as a managed-services contract. It wasn't commodity-based managed services. It was complicated stuff, security-based. It always had a wrapper around it of something that was of greater value to the customer.
Somebody has to be behind the scenes, bringing that greater value than, "Hey, I sold you a firewall. Thanks." It's got to be, "Hey, I sold you a firewall, and by the way, Mr. Customer, I can manage this firewall for you, and all of your firewalls: this one, your virtual ones, and the ones you buy out of the native Amazon stack. I'll manage the journey of data all the way across [its life cycle]."
That's different than just reselling a firewall, and saying, "See ya later." There's a million people doing that.
MSPs have got to focus. I'm telling you, there's so much need out there for good, focused managed-services people. We're looking. We always look at the guys that are really good, really focused on the areas we want. It’s easier to find than try to grow all that stuff.