On “One Guy’s Opinion,” Guy Baroan, founder and president of Baroan Technologies , discusses the technology world through the lens of a successful IT managed service provider.
It can be tough to decide which products and services a managed service provider should bring to the table. How do you know what’s profitable? How do you know what’s the newest and best, and more importantly, how do you know what will actually work? This time on One Guy’s Opinion, we asked Guy to share his formulas for success when it comes to selecting the products and services that fit a client’s needs and allow him to make a profit.
StorageCraft: How does an MSP decide what products and services to offer and not to offer? What are the pressures that dictate an offering?
Guy: We work with the Ingram Micro community. They allow us to have conversations with other MSPs and technology firms. Ingram Micro brings vendors out to us and they show us the latest offerings and talk to us about what they can do. Multiple times a year we get to see the latest technologies that are out or are coming out.
The other side of this is having business reviews with all of our clients quarterly or at least once a year. When we meet, we talk about their business and the challenges they have as a business. From a technology standpoint, we discuss what’s working well and what they would like to work better. This covers anything out there that they’re not happy with as far as how efficient it is and how much time it takes to perform a task. That gives us the area to look at it from their perspectives and identify what they need. Then we know which areas we can improve, whether they’re backups, security, remote desktop management, secure email encryption—it really doesn’t matter, we look at everything. It’s really our clients telling us what they need with these meetings.
On top of that, before we actually bring a product on board, we’ll test it internally before we start selling it. We bring it in and determine if it’s a good price point for our clients, if it’s going to do what it says it will do, and if it’s a reliable product and that’s basically how we decide. It’s based on what our clients are looking for and what others are saying they’re doing for a particular area for whatever products or services they’re offering.
StorageCraft:Are there certain services or products that provide higher margins than other ones?
Guy: The ones that provide that best margin are the ones we have to take care of the least. The ones that are the least problematic provide the highest margin because they just keep delivering and we don’t have to go out and do work to support them. I’ll give you a perfect example. You’re StorageCraft and you’re in the backup business, I love your product and I’m not saying this because we have these calls—we just love your product. Our engineers love your product because it doesn’t have as many issues as some of the other products out there.
We used to recommend [a different backup solution]. We had so many issues with it—failures—there was always something that didn’t work. Even though there was a little more margin available with that product, we still had to provide support after we sold it. If you’ve got a product that you recommend and then it fails for a client, you can’t go them and say, ‘Yes, we recommended it, but you have to pay to fix it,’ – it doesn’t work that way. If you’re making the recommendation, you’ve got to fix it. We had so many issues and it got to the point where we got [the backup vendor] involved. We asked them why we were having all of these issues, is it something we’re doing? Is it your software? And we were pretty high up with them, we were on their SMB board, we were working with high-level engineers and they said we were doing everything the way we needed to. Sometimes a new version comes out and ruins the software—that’s just the nature of it. So we literally spent tens of thousands of dollars of our own money via time, just fixing the issues we had.
The way we look at it, products that work are the best margin products we have. The least amount of issues we can have with a product the better off we are because it allows us to do what we say we’re doing, which means we have a backup solution that works, we’ve got a good reputation, our clients believe us, and if we need to restore the backup, it’s there. This allows us to have that ongoing relationship and become a trusted advisor because we provide them with something that works, and it’s the solution they’re looking for.
In my mind, you need to standardize on the products that don’t have issues and do what they say they’re going to do—those are the best products to have.
StorageCraft: Are there some services that can be provided that not a lot of MSPs think about?
Guy: One thing is surveillance and cameras. I don’t know many other MSPs that do them, but just think of the opportunity—it’s on the network. Anything on the network is an opportunity for an MSP. They’re putting in switches, you’re controlling the data. IT cameras need storage. Why let someone who comes in from the old side, the digital recorder world, why let them come in and run analog lines when you can have cameras running over the cables that are in place—it’s an end-point—why can’t you manage those? It’s something MSPs should consider but not a lot are right now.
StorageCraft: From a networking perspective, are there additional security concerns with surveillance cameras?
Guy: Almost everything on the network has a username and password. Cameras are no different. Every camera has an OS built in, every OS can run commands. If it’s on the network, it can be used to spy on what’s going on—not just from an image perspective, but someone can get into the network. It’s definitely an opportunity for an MSP to get into, it’s just an end-point, but there can be security concerns.
StorageCraft: When it comes to which services to provide, where does an MSP draw the line?
Guy: It comes down to what you can do well. As a technology company, you can provide anything. We’ve got a lot of information about a lot of things, but do we necessarily know everything? Websites for instance—things like SEO—people hear that we’re a technology company and think, ‘Oh, can you build me a website?’ but that might not be something you do. If you do, does it mean you’re good at it? You’re probably good at some stuff, and not great at other stuff, which means you could end up spending time on things you can’t do a great job at. You’ve got to invest in people and training and get new services on the same level your other services are at. You might just have to decide that rather than building websites, you’ll work with a partner who will build them when you have the opportunity—you can make these services available through a partnership. You might make less money, but you can at least make something by recommending an expert.
You really can’t do everything when it comes to programming or things like that—you’ve got to be really good at that stuff, and while there’s a huge market for it, what do you really know about it? You’re better off working with an expert. If you’re starting to see a lot of demand, maybe you hire someone that can do it and work your way into it. But you can’t go full force into something. You’ve got to go with what you’re good at and what you know. Stick to that and work your way into the rest.
Did you know that StorageCraft has an excellent partner program for managed service providers? Check out our Profit-Ability page to learn more.
Photo Credit: Chris Potter via Flickr