December 26, 2022
By Heather Murray
Every day, more organizations invest in cloud technologies that will power their digital transformation initiatives — and they’re relying heavily on managed service providers to implement new tech, help them scale and realize the returns on their investments.
As a result, there’s a big opportunity for MSPs to grow their businesses in the new year, where IT spending is predicted to grow over 5% worldwide, despite other budgets shrinking as a result of macroeconomic challenges.
MSP Revenue-Capitalization Tips
For MSPs looking to grow their businesses, it’s critical they partner with the right independent software vendors (ISVs), ones who are focused on building total ecosystem opportunities and partnering for mutual success. Especially as we approach the new year, here are a few tips I have for MSPs looking to capitalize on revenue opportunities from growing digital collaboration needs.
1. Go beyond metals-based partner programs and marketing development funds. Over the years, the channel ecosystem has evolved — but the symbiotic relationship between ISVs and partners hasn’t changed. To help partners get the most out of their relationships, many ISVs have created metals-based partner programs — gold, silver and bronze partners, for example — to incentivize MSPs. But all too often, these programs are transactional and encourage individual technology resale, not adoption or co-sell and upsell opportunities. Instead, MSPs should consider software vendors that encourage and help them capitalize on the multiplier of their technology. The multiplier is the total potential value of your partnership, not just the total margins on product resale, which is what most metals-based partner programs are built upon.
Similarly, traditional partner programs have provided marketing development funds (MDF). While there’s nothing wrong with providing MDF to partners, I’ve seen too many scenarios where there is little oversight in how the funds are deployed. Instead, look for partners that are willing to invest in your buyers’ journeys and want to build strategies that will drive both of your businesses together. Go-to-market plans that include MDF and strategic co-selling and co-marketing are where you will get the most bang for your buck, together.
2. Invest in employee training. In addition to finding the right external partners and programs, it’s critical to develop your employees. I know from conversations with partners that many MSPs are experiencing high turnover and talent shortages lately, and that it’s impacting business. But in the United States, nearly half of all workers would switch to a new job if it offered skills training opportunities, according to Gallup. That’s why it is important to provide training and development as often as possible.
When working with ISVs, many will provide unique opportunities to train your employees on common digital collaboration platforms, and of course, on their software. Encouraging your employees to participate in and take advantage of these training programs not only helps your organization deploy better services, but also helps you retain more talent, your most valuable asset.
3. Take calculated risks, even amid uncertainty. It’s no surprise that all businesses today face an uncertain macroeconomic and geopolitical environment. That’s why it’s more critical than ever for MSPs to prove their value to the organizations they serve and demonstrate tangible return on investment on their digital-transformation efforts. That may mean investing more in technology partnerships or training, because they will make your services to end-customers more valuable. Of course, it’s always critical to evaluate your budget and align it to your core business needs, but taking calculated risks instead of backing off new partnerships completely is a better approach.
Heading into 2023, the channel ecosystem is gaining even more importance. MSPs can benefit from ISVs who are prioritizing their channel businesses. It’s crucial that partners keep their eyes open to total ecosystem opportunities and aren’t persuaded by flashy, yet limiting, metals-based programs; invest in employee training opportunities; and take intentional risks to grow their businesses. As a result, they’ll build new revenue opportunities to accelerate through the new year and beyond.
Heather Murray is chief channel officer at AvePoint. She joined AvePoint after nearly 25 years at TD Synnex (Tech Data before its merger with Synnex), where she most recently was VP of vendor marketing. You may follow her on LinkedIn or @AvePoint on Twitter.
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